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Low power rates to attract more investors

Subic Bay Freeport Zone – Locators here believe that increasing the supply of reliable and cost-competitive power to drive down electricity rates in the Luzon grid will attract more investments and locators.

According Jeff Lin, president of Subic Bay Development Management Center (SBDMC)
and administrator of the Subic Bay Gateway Park (SBGP), power costs represent a huge chunk of the cost of doing business here.

Subic Bay Gateway Park is a world-class industrial park offering approximately 150 hectares of prime industrial land and is host to about 80 direct locators and 60 plus sub-lessees made up mostly of manufacturing and production firms. “The Philippines currently has one of the highest power rates in the Asian region. Foreign or even local businessman looking at locating and investing here will see this as a disadvantage. We believe we have to try to remedy this somehow”.

At the same time, the SBDMC reiterated its support for Redondo Peninsula Energy (RP Energy), a fellow SBFZ investor and locator. Lin mentioned that SBDMC and its locators support the power project of RP Energy being developed within the freeport. They have actually been counting on the power to be supplied by the 600-MW power project to the Luzon Grid to help address the need for additional reliable and competitively-priced power.

The DOE’s Philippine Energy Plan states that 11,000MW in additional capacity is needed until 2030 for the Luzon grid alone. This projection is based on a 4.8-percent annual growth in energy demand. This means a new 600-MW power plant needs to be online every year starting 2016 onwards.

In the past, a group of Subic locators already pushed the need to increase power supply in the Luzon area to keep up with economic development and avoid a power situation as that in Mindanao.

The Chamber of Commerce here reminded local and national stakeholders to recognize the need to move forward with power investments in the Luzon grid, saying that the government needs to fast-track the construction of baseload power plants to augment capacity and provide cheaper power.

It added that Subic-based companies operating 24/7 such as those in service and tourism will be worst hit if there is any interruption in the supply of electricity.

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