By Elinando B. Cinco
The onset of the summer months usually triggers unplanned electricity outages, or brown-outs, due to the thinning power capacity and the expected surge demand for electricity as temperatures soar from mid to high 30’s.
Natural calamities such as the recent spate of earthquakes that shook several towns in Batangas also contributed to the unscheduled power interruption as several power plants situated in the province were critically damaged. According to reports, the Luzon grid lost 1,570 megawatts (MW), as the earthquakes forced outages to the Avion Unit 2 (50 MW), San Lorenzo Ruiz Units1 and 2 (500 MW), Ilijan B (600 MW), and San Gabriel (420 MW).
Brown-outs, especially unscheduled ones, harm the economy by interrupting business activity. The shortage of electricity supply also leads to structurally high electricity prices. The high cost of electricity is a deterrent for new foreign investment, as well as making businesses that are already invested in the country globally uncompetitive.
Such scenarios occurred due to the country’s insufficient, outdated, and old power-generation infrastructure. In addition, the preparedness of the country when disasters strike is also critical to prevent consumers and businesses getting the brunt of the outages.
Preparing for unscheduled outages
So tight will be the power supply situation of the Philippines this summer that the government is looking into some of the most far-fetched scenarios to prevent consumers from suffering.
Power utility company Manila Electric Company (Meralco), for its part, issued a statement that there were improvements on its disaster-response, made evident in last week’s stream of earthquakes in Batangas – one of its service areas.
Meralco spokesperson Joe Zaldarriaga said at a recent joint press conference with the Department of Energy (DOE) and industry players, that there was no reported heavy damage experienced as far as the Meralco facilities were concerned.
With the recurrence of “yellow alert” conditions in the Luzon grid, Meralco now has an instantaneous response on the required mobilization of the interruptible load program (ILP) so that participants can de-load from the grid at the quickest interval.
Under the ILP, entities with at least one MW power source can use their own generators instead of sourcing their power from the grid. According to DOE, there’s around 2,000 MW of generating capacity from back-up generators in the franchise area of Meralco. The utility company has a current standby of around 130 megawatts of ILP capability that may be activated if the system requires it.
Reasons for insufficient power supply
Part of the reason why there is insufficient power supply is investments into the power sector have faced considerable delays and challenges.
First, the privatization of state-owned power plants under the Electric Power Industry Reform Act (EPIRA) faced challenges, owing in part to the tedious documentation of government-owned land on which the plants were built. Second, several proposed coal-fired power plant projects have been met with law suits brought forward by environmentalists, which have delayed their completion.
Recently, development and construction of several baseload power plants were hampered by a protest of a consumer group, asking the Supreme Court (SC) to issue a temporary restraining order (TRO) against select Power Supply Agreements (PSAs) already filed with the Energy Regulatory Commission (ERC) last year.
The consumer group’s petition attacks seven generators (including San Miguel Power, Aboitiz Power, DMCI, Global Power) with PSAs with Meralco. These PSAs are intended to secure power requirements of more than five million electricity consumers in the next three to five years.
Delays in the approval process do not only cause setbacks on the development of these power projects – which takes about three to four years to build – but also pose threat on energy security and most importantly retard the nation’s economic growth.
Stalling power plant developments is actually anti-poor because it could jeopardize the country’s future supply. Absence of a stable power supply is actually more expensive for the ordinary Filipinos, as we have seen in the Visayas rotating brownouts, then in Mindanao just recently.
The Luzon grid occasionally experiences yellow and red alerts.
This means that the possibility of season power interruptions cannot be ruled out since baseload power plants in the pipeline have yet to begin construction.
With both public and private sectors expecting an influx of investments and businesses due to the country’s burgeoning economy, it is crucial that the government reinforce its infrastructure backbone by setting up more power facilities, especially in Luzon. This will address the increase in demand for a stable and reliable supply of electricity once more business pours in.
In Part 2 of this piece, we will be discussing the importance of keeping abreast with regional developments in the energy sector by modernizing new power plants that are being built to efficiently address baseload requirements of the country in the near future.