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Preempting a looming power crisis

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Greg B. Macabenta

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Preempting a looming power crisis

It is said that if hindsight is a perfect science, that makes scientists of our country’s national leaders and bureaucrats. In administration after administration, the would’ve-could’ve-should’ve syndrome has been a familiar affliction. Everyone — particularly those in the legislature and in Malacañang — have been experts on how a crisis would have, could have and should have been avoided if “someone” had acted promptly and efficiently.

Sadly, these buck-passers won’t admit that they could have and should have anticipated and acted on the crisis — but didn’t.

Well. Another crisis is looming. And this time it can be and should be avoided. It’s also an opportunity for this government to show that it knows how to manage national affairs, beyond liquidating drug suspects and conducting fruitless legislative investigations.

CNN Philippines has just run a five-part series on the threatening power crisis, entitled, “Powering the Future.” This time, it is a prospective rather than a retrospective situation confronting the government’s energy czars, as well as the legislature and President Rodrigo Duterte. A situation they can and should promptly act on.

Much has already been said about past power problems that plagued the country, going back to the administrations of presidents Corazon C. Aquino and Fidel V. Ramos. Our leaders should already have learned the bitter lessons from the insufferable brownouts, the corrosive effect on the national treasury, and the negative impact on the country’s investment prospects and infrastructure programs — lessons that ought to prompt them to act expeditiously and efficiently this time around.

The CNN reports are persuasive:

1. The country’s current dependable power reserve is very low at five to 10% compared to other Asian countries, like Singapore with reserves at 50%.

2. During summer, power outages become unavoidable as supply grapples with the seasonal spike in electricity usage. Offices and households need more cooling appliances, and establishments have to cope with increased tourism activities. These, on top of regular household and business power consumption.

3. The Philippines’ power demand has been increasing at a rate of five to eight percent annually, one positive reason being the country’s strong economic growth.

4. The country’s ambitious 2017 to 2022 infrastructure plans and the growth of the power-intensive manufacturing sector will further add pressure on supply.

5. What makes the chronic power supply problem worse is the near depletion of the Malampaya Natural Gas Facility which provides 30% of Luzon’s total capacity of 11,218 megawatts (MW). The facility’s gas reserves are expected to run out starting in 2024, posing a serious power supply shortfall.

6. Note that a power deficit of 100 MW can result in a one-hour daily rotational brownout.

So, how can these obvious problems be addressed and the looming crisis averted? Again, the CNN report proposes solutions that any reasonably intelligent and diligent bureaucrat would, could and should understand:

1. Build more power plants as soon as possible. This would, could and should ensure the steady supply of electricity needed to meet the growing energy demand.

2. Get rid of the disincentives for private sector investments in power plants, mainly, the red tape that unbelievably requires five years. COUNT THEM, FIVE YEARS to process an application for a permit to build a power plant. A power plant investor also needs to secure 162 clearances and 102 permits before any work can start on a facility. COUNT THEM: 162 CLEARANCES AND 102 PERMITS.

Mercifully, Senator Sherwin Gatchalian, who has had hands-on commercial and industrial management involvement and expertise, has filed a bill to nip the bureaucratic red tape in securing power plant permits. He proposes the Energy Virtual One-Stop Shop (E-VOSS), a Web site for all power plants in the country, that will allow a prospective investor to submit documents electronically, monitor the status and pay fees online.

The bill will also impose a 30-day deadline to approve a specific permit. The entire process will be shortened to one-and-a-half years, at the most. That’s still a long time in view of the looming crisis but infinitely faster than five years.

Another promising development is the technology-neutral policy that has been adopted by the Department of Energy. This policy promotes various energy sources such as solar, geothermal, wind and hydro, and also includes coal and oil. The objective is to make power supply cost-efficient and reliable.

This is good news for current and potential coal power plant investors. Coal-fired power plants generate a third of the country’s dependable power supply and coal happens to be the most abundant, most reliable and least-cost fuel in the country.

Concerns have been raised about coal, in view of the climate change crisis, but proponents say that the problem can be minimized, with strict observance of the conditions in the Environment Compliance Certificate (ECC), which covers pollution, waste water and tree cutting. The emergence of the so-called clean coal technology could also reduce carbon emissions.

Renewable and environmentally ideal energy sources, like solar and wind, while expensive and difficult to set up, offer the prospects of a more sustainable energy program in the long run. These should not be overlooked.

Anticipating the country’s power needs and promptly acting on them should be given high priority by the government. While hindsight is a perfect science, foresight is better proof of government efficiency and commitment to public service.

 

Greg B. Macabenta is an advertising and communications man shuttling between San Francisco and Manila and providing unique insights on issues from both perspectives.

gregmacabenta@hotmail.com

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