Yellow and red alerts have become an annual summer ritual reflecting inadequate electric power capacity in the system, with yellow meaning less than desired reserve capacity and red meaning not enough to service actual load demands. The latter leads to power interruptions or brownouts, which are disruptive and costly to various business establishments whose operations rely on continuous electric power. Why do we have to perennially put up with such inadequacy and unreliability in our electricity supplies, which largely leads to our failure to attract as much job-creating investments into our economy as our neighbors do? What needs to be done to avoid falling into the same situation of inadequacy once and for all?
I asked three experts active in the energy field what we need to be doing differently if we are to avoid power shortages by next year, and into the future. Industry veteran Ernie Pantangco, erstwhile top power company executive who had also chaired the energy committee of the Management Association of the Philippines, starts with the basics. He has been frustrated at the lack of a truly accurate picture of the power supply and demand situation in the country. We keep falling into the same crisis year after year because no one seems to know for sure how much actual reliable generation capacity there is. Government tends to rely on the power companies’ reported information on rated capacities, which are likely to be significantly different (and often overstated) from what is really available. There are various reasons for this, including the age of power plants, environmental factors that affect especially large plants running on hydro and geothermal power, and many more. He has long called for an honest-to-goodness examination and assessment of all operating power generation resources in the country but does not see it happening even with a lot of local expertise to do it.
But Ernie also points to one glaring flaw: power deficiencies, including the recent ones we’ve seen, are usually explained by downtimes resulting from a combination of scheduled maintenance and unexpected plant breakdowns. But why even time scheduled maintenance of major plants during the peak summer months, he asks, when all available capacities in the system need to be accessible? Good question indeed, and while power companies give various excuses for ill-timed regular maintenance, the Department of Energy can simply crack the whip and mandate the industry to avoid scheduling these at the worst time, which seemingly keeps recurring year after year.
For my friend Guido Delgado who headed the National Power Corp. during the Ramos administration, before the power generation industry was privatized, the basic problem is that private investment in new generation capacity is unattractive. And there are again many reasons for this. Investment should be generally attractive in a growing economy like ours had there been a level playing field on both the supply and demand sides. But the fair market competition in the industry that Republic Act No. 9136 or the Electric Power Industry Reform Act envisaged remains a dream. The difficulty lies more on the demand side, where the largest distribution utility (Meralco) wields monopsonistic (i.e., single or dominant buyer) power over the market. Thus, we have a situation where any power plant investor would have to gain a single player’s favor to be viable. And while independent power producers can now directly compete for retail customers and bypass distribution utilities like Meralco, it remains limited to customers who use 500 kilowatts and above. This limitation, Guido argues, ought to be done away with, and let full competition prevail, thus helping bring down power costs, and achieve a more level playing field conducive to more power investments.
Alex Ablaza, who heads the Philippine Energy Efficiency Alliance, has long seen wide scope for improving energy efficiency in our power systems but laments how still too few investments in this are made. Technologies such as solar thermal cooling (not to be confused with solar photovoltaic systems) can now reduce peak electricity demand during mid-day and early afternoon peak hours especially this time of year. Load-shifting technologies such as energy storage through thermal, kinetic, or battery systems can help flatten the wide swings in power demand both within a single day and across seasons of the year. We need not build as many new power plants if only we could tap the power savings that more efficient energy systems and smoother energy use patterns can bring. We just need to incentivize them enough, and there is much in RA 11285 or the Energy Efficiency and Conservation Act of 2019 that could guide our steps forward.
In any case, it’s time we banged heads together in a “power summit” and came up with truly promising solutions to a perennial problem.
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