^

Business

Words words words

DEMAND AND SUPPLY - Boo Chanco - The Philippine Star

If only words can fuel a power plant, we should have no problems. Unfortunately, unless actions follow words, the danger of power shortages or brownouts exists. Good intentions behind new laws also don’t amount to much.

I viewed the symposium of the Management Association of the Philippines (MAP) on energy security last Tuesday and I didn’t hear a thing I haven’t heard before. The numbers are bad, the solutions are logical, but there is no hope unless the government moves.

Take red tape in the approval of a power plant project as an example. They huffed and puffed, rolled out a program that called for a one-stop shop for obtaining approvals.

Lo and behold… after all the huffing and puffing, they were able to reduce the 1,876 days needed to get approval of a power project to 1,776 days. That’s 5.1 years to 4.8 years. Big deal!

They were able to reduce the number of signatures needed from 359 to 326. Hooray! But the number of regulatory agencies remains at 74; different laws governing the same process remain at 20 and different contracts, certifications, endorsements, and licenses remain at 43.

In the meantime, approved projects are delayed for one reason or another. Of 38 projects involving 2,192 MW, only 11 with a minuscule 147 MW are on time.

For a while we thought the economic slowdown due to the pandemic lockdowns may allow us to catch up. But recent yellow and red alerts deliver the message that we have no time to fool around as usual.

Demand has started going up as restrictions are relaxed. Right now we are skating on rather thin ice in terms of reserves.

Our power plants are getting old and less reliable, explaining forced outages. Given how long it takes to get regulatory approval to put up new power plants, we ought to plan way in advance. Otherwise, power failures will become something Filipinos are doomed to live with.

Then there are debates on what power plants to build. Coal fired power plants now provide baseload capacity. But coal has been demonized, with some good reasons, so that our publicity conscious Energy secretary declared a moratorium on more coal fired plants.

Problem is… we are not being told what we will do in place of coal fired baseload plants. Even Sen. Win Gatchalian, who agrees with the coal ban, laments that the Department of Energy has not provided him a transition plan with the details of how this new policy will be carried out with no disruptions.

Nice to say coal will be replaced by renewable energy. But the only reliable renewable sources for baseload are big hydro (except in the dry season) and geothermal (but limited because no new large geothermal reservoirs have been recently found).

Solar is nice and they are now producing solar power in the megawatts. But I doubt if solar can be used for baseload. Wind is all hot air so far, generating more tourism than power. Biomass has potential if we harness all the bulls--t from our politicians. But baseload replacement for coal?

I don’t like coal much too, but given our rather precarious situation now, it may yet be the more realistic energy source to replace the old plants. Otherwise, we will resort to emergency measures like oil-fired power barges. There is, in any case, new technology for coal fired power plants that minimizes the pollution attributed to it in the past.

I like the call of Sen. Gatchalian for the development of more local energy sources. But I hope the senator is not taken in by the rosy numbers presented to him of potentials. He must see the reality of oil exploration drilling as well.

For example, the chart the senator presented of potential oil and gas reserves in the West Philippine Sea show very promising numbers. But from what I have learned in the many years of exposure to the industry, those numbers are like promises of politicians.

My former boss, the late Ronnie Velasco, used to kid the geologists about their enthusiasm every time they present plans and budgets for drilling exploratory wells in that same region.

Then, after drillings deliver bad news (dry well or not of commercial quantity), the geologists still say with a straight face it was a successful operation because now they know more about the area than they did before.

Sure, I believe we should explore more for potential oil and gas reserves. But serious plans should never be based on those explorations delivering something like another Malampaya. If it happens, good. If not, we didn’t plan on having those anyway.

Sen. Gatchalian made a very good point on having DOE accountability on planning for our energy needs. He didn’t say it outright, but the senator’s presentation pointed to a failure in planning on the part of DOE.

Planning is also just the beginning. There is execution or implementation. Our bureaucrats, in general, are very poor in execution and DOE’s bureaucrats are no exception.

Sen. Gatchalian cited the implementation of RA 11285 (Energy Efficiency and Conservation Act). Of 39 programs under the law, more than half have not been implemented at all. One can assume the 48 percent implemented were not even implemented well. The law gives DOE the powers to make the private sector comply with energy efficiency regulations, even jail terms for business executives ignoring the rules.

Sen. Gatchalian also noted that power transmission projects are delayed. He pointed out that if the line connecting Mindanao to the national grid was already completed, the 400 MW of surplus power in Mindanao could have saved Luzon when we last experienced yellow and red alerts.

A private sector presenter, who was a former DOE usec, summarized what makes our power problems more serious than they should be. His complaints:

Too restrictive government regulations; too rigid process for offtake agreement; too many permits and licenses; too little integrated government support.

All those have been obvious for so long. But, as I said, we are only talking about our problems. Words will not add a watt of electricity, unfortunately. Saliva is not a power source.

 

 

Boo Chanco’s email address is [email protected]. Follow him on Twitter @boochanco

MANAGEMENT ASSOCIATION OF THE PHILIPPINES

Philstar
  • Latest
  • Trending
Latest
Recommended
Are you sure you want to log out?
X
Login

Philstar.com is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

FORGOT PASSWORD?
SIGN IN
or sign in with