PH energy in peril
Credit to Author: Tempo Desk| Date: Wed, 13 Mar 2019 16:30:51 +0000
THE headline of our sister publication Manila Bulletin last week read: “Luzon on power alert anew”
The solution is clear: build new and modern power plants to address and support the country’s economic growth.
We could possibly be in a lot of trouble due to the unexpected shutdown of big power-generating units in Luzon.
This situation triggered the National Grid Corporation of the Philippines (NGCP) to issue the yellow alert three times last week. A yellow alert is a situation when reserve power falls below the required level. Reserves are inadequate to cover the largest running generating unit at the time, but this does not necessarily lead to power outages.
The low reserve margin, deteriorating power plants, and regulatory delays in approving applications for permit to construct new power plants must be addressed to ensure supply security.
The shortage of electricity supply also leads to structurally high electricity prices. The high cost of electricity is a deterrent to foreign investments and poses a problem to businesses that are already invested in the country.
The culprit, according to industry sources, is the country’s insufficient and outdated power-generation infrastructure. Thirty-three percent of the country’s current capacity come from power plants operating for 20 years, already nearing their 25-year lifespan. Some 60 percent of power plants in the country today are operating for more than 15 years, making them more prone to operational problems which are evident in the recent emergency and forced shutdowns that triggered the yellow alerts.
Several large companies are lining up for investment, but they often encounter bureaucratic delays.
Clearly, the country needs more modern, reliable and sustainable baseload power plants if we are to generate 43,765MW of additional power-generation capacity by 2040 to meet the increasing power demand as the economy continues to expand and grow. Unfortunately, these are not being built fast enough.
The problem is that some power plants are still in the initial construction stage and have yet to secure the required permits to start the project even though they have been awarded by the DOE as energy projects of national significance.
My spies say delays in the approval process do not only cause setbacks on the development of these power projects – which take about three to four years to build – but also pose a threat to energy security, and most importantly constitute a drag on the nation’s economic growth. Worse, stalling power plant development is anti-poor because it jeopardizes the country’s future supply. The absence of a stable power supply is more expensive for ordinary Filipinos.