The Aquino (Part II) administration already issued grim warnings of power shortages in Luzon this summer—meaning, real threats of brownouts and, of course, as the natural upshot of any shortage, increases in electricity rates.
Yes, we may have no lights in the house during supper!
Anyway, the manufacturing sector in Luzon—which accounts for a big chunk of the GDP—are facing delays in their production schedule and, thus, cancelled orders due to those delays.
And so the billion-peso question is: Why did the administration dillydally in building more power plants in Luzon, or at least in pushing for the new power projects of the private sector?
First of all, our beloved bright boys in the Cabinet of our dear leader Benigno Simoen (aka BS) already saw the growing demand for electricity all over the country, mainly due to the high economic growth they themselves expected.
In his 2013 Sona, in fact, our dear leader BS even made special mention of the need for the public and private sectors to support each other in ensuring a steady power supply in the country.
Well, he even described new power projects as “critical.”
Between those lovely words of our dear leader BS and concrete action from the Aquino (Part II) administration lies a chasm much bigger than the Solar System.
Energy Secretary Jericho Petilla issued a warning on what he called the “worsening energy crisis” in the country, since the Luzon grid might again be put under “yellow alert,” which would be just a little bit less worrisome than the “red alert” hoisted in Mindanao this summer.
As we all know, the National Grid Corporation of the Philippines (NGCP) issues the “yellow alert” whenever power reserves drop to below the capacity of the largest plant, which for Luzon is pegged at 600 megawatts. In other words, the Luzon grid does not have enough reserve capacity.
What to do? From what I gathered, the Department of Energy (DOE) already notified business establishments in Luzon on the critical state of the power supply this summer.
It is often whispered in the power industry that, in the past 10 years or so, the peak demand for electricity in Luzon has been growing steadily, according to some estimates, from only 5,600 megawatts (MW) to about 8,300 MW.
Recently the DOE started to alert business outfits in Luzon, particularly those in the capital region, to activate their own power generators to lessen the load on the Luzon grid, particularly in the daytime—peak hours of business.
But the problem with private “gensets” has always been the cost of running them. Due to the fuel cost alone, private “gensets” may end up costing businesses more than the rates charged by the mainstream power industry.
Since it would be expensive for establishments like SM malls to run their own generators, the DOE reactivated its program to subsidize the power costs of businesses using their own electricity sources.
We all know that, to build new power plants, the private companies would need truckloads of money—by the billions of dollars, as a matter of fact. Not only that, construction alone may take take three to four years. Then there’s the tedious financial closing with banks. The whole process in all may take at least five years.
Yet the Aquino (Part II) administration deemed that new power plants would be essential to economic growth, which the boys of our leader BS have been trumpeting about since the beginning of time.
Anyway, the issue has been settled: What this country really needs, as a long-term solution to our power problems in supply and cost, are stable and cheaper “base-load” power plants that can run day in and day out.
But it is still a mystery to the guys down here in my barangay why the government kept on delaying base-load projects, such as the 600-MW plant in Subic by a company called Redondo Peninsula Energy, or RP Energy, majority owned by the Meralco PowerGen Corp.
The new project has been languishing in limbo for the past two years although, from what I heard, the company is still as keen as ever on pursuing the project. After all, even the private sector declared the project to be critical in stabilizing power supply in Luzon and bringing down electricity rates.
As it turned out, the company is still trying to address the “Writ of Kalikasan” case that some groups threw at it. It already has gone through the Court of Appeals and has been pending for some time now with the Supreme Court.
Also, RP Energy is working hard on another project—the 500-MW supercritical coal-fired power plant in Mauban, Quezon. The project will be undertaken by San Buenaventura Power—a joint venture between RP Energy and EGCo of Thailand.
Now RP Energy is known to be a latecomer in the power generation business. Even then, it already showed true grit in pursuing projects, such as the 20-percent stake it bought in the company called Global Business Power, which happens to be the biggest power producer in the Visayas.
Based on word going around in the power business, RP Energy is also developing a twin 600-MW supercritical coal-fired power generation facility in southern Luzon, said to be be one of the biggest power generation facilities in the country, which it targets to complete by 2019.
Now, if only we could stop bickering about everything under the sun, perhaps we could solve our big headache over the cost of power, which has been adjudged the highest in all of Asia.
Or, if we would have to squabble over this and that, at least let us put some tenable proposals on the table as alternative to the base-load power plants.
Look, boss, summer in this country is always hot, and it will only be more problematic for us with the power shortage and the resulting increase in rates.
Heaven help us!