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(Last of two parts)
There is a consensus among state and private sector officials that the power supply situation in the Philippines in the coming summer months will be precarious.
Given the traditional surge in demand for electricity—due largely to the heavy use of air-conditioning—the supply situation for Luzon will be tight, at best. It is a different story in the Visayas and in Mindanao where shortages in the supply of electricity are expected.
Hydropower-dependent Mindanao, in particular, will suffer more as the dry season lowers water levels in various lakes and rivers that run its hydroelectric power plants.
To make matters worse, meteorologists have warned that there was a strong chance for the return of the El Niño weather phenomenon starting in June, threatening to prolong the dry spell.
“In fact, it’s starting. I just received an advisory that Australia, Indonesia and Malaysia are all reporting very dry weather. And the Philippines is expected to be greatly affected,” said businessman Pocholo Soliven from Zamboanga City.
What then can businessmen and even ordinary citizens do to mitigate the effects of the looming power shortage?
Former Energy Undersecretary Jose Layug Jr. said the short-term solution was to address the “demand side” since it would take up to four years to fix the “supply side” by building a new power plant.
Four-day workweek, DST
“One of the plans of government, which I think is a good plan, is staggering work hours [and] considering a four-day workweek,” he said. “It’s all on the demand side management.”
If the government is feeling bolder, he said it could even consider implementing daylight saving time (DST)—last used during the administration of President Corazon Aquino. The clock was advanced by an hour to take advantage of longer daylight hours during the summer months.
Such bold action, Layug said, should be undertaken to make sure the public minimizes electricity consumption during the critical months.
Crippling shortage
Over the medium- and long-term, however, Layug said more comprehensive and cohesive government action was necessary to head off what could be a crippling shortage in power supply.
“We are at a critical period,” Layug said, adding that without an adequate and affordable power supply, the Philippine economy would not grow.
“How can a manufacturing plant locate to the Philippines if it will suffer from brownouts? And it’s not just planning. Is [the cost of power] expensive? It’s a function of resource availability. The more we have then [the more] this cost issue will not be a problem.”
Another former energy undersecretary, G.E. Philippines CEO J.V. Emmanuel de Dios, said that not enough capacity was being built partly because there had been a wait-and-see attitude among investors following power sector reforms under the Electric Power Industry Reform Act after 2001.
At that time, however, the slow development of new power capacities was not troublesome because the tight supply periods identified by forecasting models never materialized into actual critical periods.
The power demand was small, the Philippines was not heavy on power-hungry industries, the manufacturing base was small and the economy was very consumption-driven.
“I guess the investments didn’t come as quickly as we would have wanted,” De Dios said.
Options
For now, the Department of Energy (DOE) said it was looking into various options, such as encouraging diesel generation set owners to use their own electricity and refrain from getting power from the grid during peak hours.
It is also asking power plants and industrial facilities with generation sets to use them to help supplement supply in the grid.
In addition, upon the initiative of Manila Electric Co. (Meralco), the DOE is seeking to postpone scheduled maintenance shutdowns of two power plants in Luzon this summer.
Energy Secretary Carlos Jericho Petilla said his office was trying to convince the operator of the Pagbilao coal-fired power plant to defer its scheduled shutdown.
Deferred shutdowns
“We are looking [at the scheduled shutdown] at Ilijan [natural gas power plant] from March for 15 days and Pagbilao from May 24 for 30 days. These schedules have been in place since last year but Meralco is asking for a deferment now,” Petilla said.
“We have asked generators to accommodate the request but only if it does not lead to the power plant concerned to prolong downtime in the future,” he added.
But no such quick fixes are on the table for either the Visayas
event of unscheduled shutdowns of power plants.
During the same period, 429 MW will come online in the Visayas or Mindanao.
According to official DOE documents, 1,467 megawatts of generating capacity are set to come online in Luzon over the next three years to give businesses and residents a more comfortable buffer in the and another 920 MW in Mindanao.
But the earliest relief for Visayas, according to the documents, will be in September of this year, while Mindanao residents will have to bear the current shortage until relief comes by the third quarter of 2015, at the earliest.
Stable supply, high rates
For the people of the Visayas and Mindanao to enjoy more stable power supply, however, they will almost certainly have to pay more for electricity than they do today—something that businessmen like Soliven have come to accept.
“I would welcome that,” he said, when asked whether he would be willing to pay higher rates for more reliable electricity from the grid. “I have to answer you point blank: The most expensive kind of power is not having any power at all.”
Soliven, who also heads the Zamboanga Chamber of Commerce and Industry, could not help but lament what he felt was a lack of foresight on the part of policymakers that led to the dire power situation in Mindanao.
“I don’t even know if we are still on the radar screen of the national government,” he said.
He noted that the power shortage also had a negative social impact since levels of criminality had been observed to increase during hours when electricity was out. “Describing the situation as ‘challenging’ is an understatement.”
“I’m speaking as a Mindanaoan and not just as a Zamboangueño: This power shortage started manifesting itself in 2010. The power outages started happening then. And it happens every year. Why was nothing done sooner?” he said.
It is a question that resonates, in varying degrees, among some 12 million people in the Visayas and 26 million in Mindanao.
The DOE expects the situation in Mindanao to persist for at least another year or two when new power plants come on stream.
“By 2015 to 2016, we will already have an oversupply,” Petilla said.
For now, the government’s answer is “wait.”
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