Don’t go powerless

Is there enough electricity or not? The recent yellow and red alerts bring this sharply into focus. Let’s just stick to Luzon so as not to complicate an already very complicated subject. The new brownouts last week show we’re teetering on the brink already. Whether there is enough electricity or not all hinges on “reserves.”

There are 115 generating plants in Luzon that are connected to the grid. The smallest is 1 megawatt, the biggest has a capacity of 1,294 MW. Their ages range from 1 to 70 years. They can reliably supply an average of 8,800 MW to the grid daily, with 720 MW available from CBK (a pump storage hydroelectric plant in Kalayaan) at peak load times and 650 MW from bunker fuel-fired Malaya (an old, expensive, still government-owned plant) to run in emergencies.

Demand is from a low of 5,000 MW to a high of 10,800 MW this year, generally averaging 8,800 MW, but growing as the economy grows. Based on average supply and demand, there’s a reserve of only about 1,100 MW or about 10 percent of total, which means if any of the major plants unexpectedly goes offline, we’re short of power. Which is exactly what happened last week. Incidentally, there wasn’t a collusion to raise prices as some nonelectricians in Congress claimed. It was genuine power failure.

It is generally accepted that you should have a reserve of 20-25 percent to be safe. Fortunately, if the Malampaya gas supply is the one that is cut, the 3,300 MW gas-fired plants have enough supply of liquid fuel to last several days, and can then switch to diesel.

The demand for power is growing at 5 percent per annum (on an annual gross domestic product growth of 6.5 percent). But the faster the economy grows, the quicker we approach shortages, and if the government’s desire to attract more manufacturing materializes, the depletion of the country’s energy reserves will even be faster.

There are 17 plants planned for Luzon, but they will provide only 2,300 MW of power. That’s just enough to meet demand five years from now — with no reserve. Another 2,000 to 2,500 MW is needed for that reserve, even more if manufacturing does pick up, and local businesses expand as government wants.

Also, Malampaya is finite and the service contract ends in 2024. That needs to be extended. And there’ll be no more gas by 2027 if we just let the field run out. Exploration of the concession areas beyond the existing field is urgent, because the only way to confirm if gas reserves are present is to drill more holes. That needs the Commission on Audit to stop pushing the Department of Energy to change the rules of the oil and gas exploration and development game; it’s scaring away existing and future investors. And there’s also that issue: How to get China to allow us to explore in our own territory.

Given that about 31 percent of Luzon’s total dependable capacity comes from plants, breakdowns are likely. Anyone who must have continuous power would be wise to have a backup system.

Energy Secretary Alfonso Cusi is meeting regularly with potential investors to entice generation. But it’s no easy task, and an ever-growing concern is the kind of fuel. We require plants that can operate 24/7. Coal suits us well because it is relatively quick to put up and comparatively low-cost. But it suffers from relatively low reliability, and environmentalists argue that there are associated social and health care costs as well. Their voices are more likely to be heard, but in the immediate term, it’s still the most pragmatic solution. In the longer term, it’s nuclear, and I’m glad Cusi is pursuing that. It’s safe, clean and reliable.

Hydro and geothermal are excellent, but we don’t have large amounts of water or heat to tap. Gas is clean and good, but we’re running out. Mr. Duterte is trying to negotiate a shared deal that he shouldn’t have to do, but is given no choice. There’s a plan to import gas, but that’s no real solution; we import too many things already. Something as critical as power needs to be self-produced as much as possible. A new field with indigenous gas is essential to find—we need another Malampaya. These are all baseload plants that provide the 24/7 energy we must have.

It reminds me of when Fidel Ramos entered the presidency. Cory Aquino had left us with almost daily blackouts. He promised power by the following Christmas if given emergency powers. Congress gave them, we got back 24/7 power. Drastic action was needed, he took it, we got power. We need that drastic action today. And for starters, we need the simplification and acceleration of the approval processes.

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