Energy policy failure

DEMAND AND SUPPLY - Boo Chanco - The Philippine Star
Energy policy failure
Most likely, the technocrats at DOE convinced Cusi that a coal moratorium will endear him to the noisy climate change people. Embracing renewable energy, or RE, is trendy.
STAR / File

The Department of Energy (DOE) has revealed that the total capacity of power plants in forced outages has more than doubled over the past two weeks compared to the average 700 MW recorded over the last four years. Of course. What would they expect after officials of the DOE, past and present, did nothing about the inconvenient reality that 50 percent of our operating power plants are over 20 years old and are losing their reliability.

Inadequate power supply also means higher power rates for consumers because spot market prices at WESM will spike. The red and yellow alerts can be blamed on failure of energy policy.

By the time Duterte came into power, new power plants were urgently needed to provide the baseload for the power grid. It was obvious only coal and natural gas can provide the dependable output to feed our growing demand for electricity. But on Oct. 27, 2020, Alfonso Cusi, Duterte’s energy secretary, declared a moratorium on the construction of coal power plants.

Most likely, the technocrats at DOE convinced Cusi that a coal moratorium will endear him to the noisy climate change people. Embracing renewable energy, or RE, is trendy.

Unfortunately, we are not yet at the stage that will allow us to start replacing coal power plants performing baseload duties with renewables like wind and solar.

Eventually, perhaps, but not yet. So, no new power plants went on line during Duterte’s time in office. We are now harvesting the bitter fruits of that incompetence in policy formulation.

We simply don’t have sufficient capacity to have adequate reserves to meet peak demand. Fixing that should have been the laser sharp focus of DOE. It would take a miracle to pull enough megawatts from wind and solar to quickly and reliably replace coal as a baseload workhorse. Cusi should have, instead, encouraged the power producers to fast-track the construction of new generation coal power plants that are not as pollutive as the ones we now have.

Cusi should have used his political clout to reduce the number of signatures needed from the government bureaucracy beyond DOE to get a permit to build a power plant from about 500 to less than a dozen. That will also bring down the amount of time needed to get started constructing a power plant from six years to maybe as little as one year. He could have asked for emergency powers if the bureaucrats at DENR and LGUs insisted on stalling because by that time, we were in an emergency but Cusi didn’t realize it.

After Cusi, the new energy team of Sec Popo Lotilla is totally focused on RE. Maybe it is because one of the fads in the technocracy is attending conferences on climate change abroad. They may have been overloaded with sales pitches from Western countries eager to sell us wind and solar power systems. Donor countries are eager to provide supposedly soft loans and give business to their suppliers.

So, the current DOE team has placed all their eggs in the RE basket. If for some reason the technologies we bought don’t work as well in our country, welcome blackouts galore. Now, they are blaming the pandemic for failure to meet aggressive targets for completion.

One probably not so small detail: since the offshore wind projects are out there on the West Philippine Sea, have they coordinated with NGCP to start working on the lines that would connect those wind turbines to the grid? It will not be surprising to one day see all those wind power projects ready to generate power but there is no connection to the grid.

As for solar, it requires approximately one hectare of land for every one MW installation. So, a thousand megawatts require 1,000 hectares. Just to imagine how large a thousand hectares is, Rizal Park is about 58 hectares. You will need about 17 Rizal Parks for a thousand megawatts of solar power. How will this affect our land use policy, assuming we even have one?

What is the impact of using massive land areas for solar power on our ability to grow our own food? We can’t even consolidate farm lands into economic sizes for greater productivity because of our agrarian reform law… Now we will allow all that land for solar farms? Why are we sacrificing the tourism potential of Caliraya lake for floating solar panels?

One thing is for sure. Our demand for electricity will not wait for our bureaucrats to get their acts together. There are companies who are talking of putting up power hungry data centers. In the US, the Washington Post reports they are putting some coal plants back on line or delaying their shutdowns because the power demand of data centers has upset their original projections.

Transactions in cryptocurrencies are now worth $7.3 billion in our country, according to the New York Times. Mining crypto uses a lot of electricity too.

Last week, the Financial Times reported that JP Morgan warned the world needs a “reality check” on its move from fossil fuels to RE. The bank said changing the world’s energy system “is a process that should be measured in decades, or generations, not years.” It added that investments in RE “currently offer subpar returns” and if energy prices rose strongly, there was even a risk of social unrest.

Besides, developing countries like us have very small carbon footprints. Let the big polluters like China, the United States and Europe lead the shift and also keep their promise to help us finance our transition to clean energy. In the meantime, DOE must do what it must do: guarantee that yellow and red alerts on our grid will no longer happen… even if we have to use coal.



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

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