We are hostages to power grid failures - DEMAND AND SUPPLY

That pre-Holy Week Luzon Power Grid failure isn’t surprising. In fact, I am surprised these failures don’t happen more often. Napocor’s handling of the critical power grids over the past few years is nothing short of disaster waiting to happen. Not only is capacity inadequate, as we pointed out in this column last October, maintenance and security could be a lot better.

With the major power plants now located outside of Metro Manila, the reliability of the power grid has become a most important consideration, specially for the investors Mar Roxas is desperately trying to attract. Yet, our experience shows that grid wide failure has become a regular occurrence for Napocor.

By this time, one would have expected that Napocor had instituted technical upgrades and operational procedures that will minimize these grid wide failures.

There must be a civilized way of isolating a malfunctioning power plant or redirecting power when a fault occurs along the grid without having to shut down the whole system. Once the system is shut down, it takes at least a day to bring back the grid, as we experienced the other weekend.

Whatever it is that other countries do to prevent or greatly minimize massive power grid failures, let us do it as well. That may cost some money but I guess, that’s money worth spending. If we need to hire expats because our Napocor engineers are not competent enough, let us do it too. Business is bad enough as it is. Imagine how much is lost in one day without power.

In my many years with the energy sector, I have heard a lot of technical gobbledygook to rationalize the grid problems of Napocor but none of them make sense. The excuses they were giving us in the 80s are the same ones I am hearing now. The findings of a three man technical probe team formed in the mid 80s to look into these grid problems should be reviewed.

As it is, we are stuck with the usual knee jerk Napocor excuses. If the Napocor engineers are right about their explanations, then we are all hostages to grid shutdowns at the most inappropriate times. Note that they can’t give any guarantees for election day. We don’t even need a terrorist or a saboteur. If it isn’t a jellyfish, it is something else just as incredible. If only Napocor engineers can think of a solution rather than an excuse, then we may have a more reliable power grid.

And the situation is ironic because we have grid wide failure in the wee small hours of the morning when demand is low. In fact, we have plant over capacity in the Luzon Grid so that Napocor is paying IPPs for power they can’t dispatch. ( A reason why we are paying so much for our power bills.)

The technical problem aside, the present Luzon Grid capacity is also barely sufficient to meet peak demand. Napocor abused the Power Crisis Act during FVR’s watch, as it concentrated on signing overpriced contracts with the IPPs to the point that we now have an expensive overcapacity situation. But for some reason I can only guess, they neglected to do anything about the transmission facilities, which are obviously needed to move all that power.

Let us look at some numbers as I presented them last October. Total plant capacity in the Luzon Grid is 7,500 MW. But the ability of Napocor to transmit is only in the vicinity of 5,450 MW. Peak demand is at 5,317 MW, giving us a very small leeway of only some 133 MW or just about 21/2 percent. That’s so thin to be almost non-existent.

Based on grid plant capacity of roughly 7,500 MW, we have quite a substantial theoretical reserve. That’s more than double the ERB mandate for a reserve of 32 percent on generating capacity. But someone forgot that all those generators are useless hulks of metal unless the power they can generate can be transmitted.

This inadequacy in our transmission capacity had been unnoticed thus far because our economy’s weak. We can’t afford to wait for the economy to move up before we correct the deficiency. Power projects, including those related to the transmission grid, normally require long gestation periods.

It would help if Congress passed the long delayed power reform bill. That would give the basis for the creation of a National Transmission Co. that may be partly privately owned. In fact, unless the yet-to-be formed National Transmission Co. quickly makes the necessary investment to improve the Grid, we will be in real trouble.

For starters, the $2-billion Shell invested to develop the Malampaya natural gas field will be for naught. So will the $1.3 billion that First Gas Power and another similar investment magnitude by Kepco in power plants that will use the locally produced natural gas.

Given the need to reduce our dependence on OPEC, the use of Palawan natural gas is a must. This large natural energy resource would account for about four percent of our energy requirements two years from now or 16 percent of total power supply. Before the prices of oil zoomed up, the savings in foregone oil imports were calculated at half a billion dollars. That is definitely worth a lot more now.

In any case, we simply have to make the Luzon Grid more reliable specially because it is now connected to cover part of the Visayas. In fact, it was reportedly a malfunction with the submarine cable linking Leyte’s geothermal plants to Luzon that caused the second blackout just as they have restored about 50 percent of the Grid that hot humid Saturday.

Well, Secretary Lito Camacho must do a lot of things. First, he must learn how to discount the excuses of Napocor managers and engineers. They have had a lot of practice in that. He will have to be as hands-on as my old boss as the then Ministry of Energy, Ronnie Velasco. He routinely rejected Napocor excuses and actually went out there in the field to see things for himself.

If he is to do his job right, Lito won’t have enough hours in the day coordinating with various agencies including the national police and the armed forces to ensure Grid reliability. It really scares me to think how totally vulnerable that Grid is, and so are we all.

Coded message

With all the mishaps in the US military lately, one wonders about the quality of their officer corps. Here’s something e-mailed by Dr. Ernie E.

"Skipper," the sailor said to his captain as he saluted, "a special message just came in for you from the admiral. I have it right here."

"Read it to me," the captain ordered

The sailor read, "You are without a doubt the most idiotic, lame-brained officer ever to command a ship in the United States Navy."

The skipper responded, "Have that communication decoded at once!"

(Boo Chanco’s e-mail address is [email protected])