European firms prepare for removal of power subsidy

European companies in economic zones are investing in power efficiency technologies to cope with the transition to the new power regime that is expected to be implemented in ecozones this year.

The European Chamber of Commerce of the Philippines (ECCP), however, gave assurance that this would not affect the production output of the companies.

During the press conference for the 3rd Energy Efficiency Forum that will be held next month, ECCP executive president Henry Schumacher said they have signed an agreement with Philippine Economic Zone Authority (PEZA) director general Lilia de Lima on the investments to be made for energy conservation efforts.

Expected to be implemented in the last quarter of the year is the Open Access Retail Competition (OARC) regime that removes the power subsidy provided by the prevailing Ecozone Rate Program (ERP).

Under the ERP, locators of special economic zones enjoy government-subsidized rates of P3.90 per kilowatthour. With the new power regime, these companies would shoulder the true cost of power at around P5 per kilowatthour.

The ERP expired in December 2011 but was extended up to this year. With the start of the Open Access regime, consumers may opt to negotiate directly with power suppliers for their energy requirements.

Philippe Reveilhac, president of Schneider Electric Philippines which has operations in Cavite, said that aside from investing in energy efficiency technologies, European businesses would also begin implementing standard operating procedures in energy conservation such as automation of several functions, optimizing the use of machines, as well as installing more effective insulation and airconditioning systems.

Schumacher said energy audits in companies would also be conducted.

“When we do an energy conservation program, we always take note of the output. We can keep up with the demand,” he said.