Conserving energy

Because of the microchip, we are coming to an age where we can monitor each and every appliance we have in the household; in fact, we can already control them through infrared and mobile phones. With better information, we have better control, and that means better conservation. The electric company can have better meters where the time of use of that kilowatt is charged at a different rate. There are already wireless meters where meter maids/men are no longer needed.

Power rates. I got my Meralco bill recently and started wondering. Why is our power rate so high relative to other countries? Why is it double that of developed countries? Unconfirmed sources tell me that close to 20 percent of your bill pays for inefficient use of the distribution lines. In layman’s terms, we are paying for power losses through theft and inefficiency. If this is true, why should I pay for someone else’s inefficiency? (I have a different word for inefficiency but I can’t print it.)

What can I do about it? I can whine about it but it won’t do much. Only the President, with the power of her pen, can reduce the rate by eliminating the PPA (purchased power adjustment) even for a few months.

Of course, a free market supporter like me would prefer the power of the invisible hand to force better prices through competition. (Phone rates have come down because of competition, but far enough?) I am not a fan of government intervention; this is not sustainable. How about developing a pricing mechanism not based on cost but on a basket of power rates from other Southeast Asian countries? This will surely force the efficiency into the system.

At the end of the day, I have to be proactive and constructive about it. I started to think systematically. As in any cost management exercise, one identifies the high use, recurring and material items.

Some high-use appliances in a typical household are the air conditioner, refrigerator and water heater. The aircon, though operating only 10 hours a night, consumes about 30 percent of my monthly bill. In the cooler months when we don’t need the air conditioner, my power consumption is down 30 percent. The refrigerator (or "fridgidaire" as we still call it) is on 24 hours a day, the water cooler is on 24 hours, the washing machine and dryer are on about four hours a day. They all run on electricity.

Gas versus electricity. The gas oven can save you more than 34 percent. And it still works in a brownout. A gas-based water heater can save you more than 180 percent. A gas-based grill versus an electric grill can save you more than 106 percent. (A reliable friend of mine recently did a quick analysis based on anecdotal data.)

From a conservation standpoint, the air conditioner and water heater are complementary appliances. (In physics, the theory of energy conservation talks about a zero sum for heat loss or cooling and heat gain). Instead of a 31-horsepower air conditioner, you could use a five-ton aircon that doubles as a water heater for the same or less amount of energy.

So, with all the savings why are there not as many gas-based appliances out there. It could be because: one, these appliances costs 20 to 30 percent or more upfront than electric appliances – which means less people buy them, which means the factory can only spread the capital overhead over fewer machines, which means more expensive machines. Or two, the appliances are being sold at par relative to electric ones but the market does not know. What if Petron or Shell start subsidizing the purchase of these gas-driven machines (at least in the first five years) and an education campaign, maybe the virtuous spiral can be given a kick in the pants? The oil companies get paid back through higher use of their LPG or natural gas products.

The future. In a recent article in Newsweek, there were predictions that in 15 years, hydrogen (from water) will help power our cars as gasoline prices continue to soar. (I thought the movie The Saint was science fiction.) Solar and wind will be mainstream sources. Coal and oil will still be around but because of their damage to the environment and their increasing cost, they will be ramped down. Fifteen years go fast, the Philippines needs to get ready for it.

My Two Cents: I wonder if we can harness all the hot air and empty promises of the world’s politicians and columnists (yours truly included), would we still need the oil companies? Then again, didn’t Enron trade on that? Let’s conserve!!

Poverty

Life is not fair. Some of us are born lucky…good health, good education, good friends, healthy family and a decent living. Some are not so lucky…some are born with one or more missing body parts, with no money to go to public school, no job. Some don’t even have parents and some have parents they wish they did not have. In Mozambique, one in five children die before they reach age 5. You can call this the downward spiral of poverty. In order for kids to break this cycle, they need a good education, and they need to survive healthwise.

IT is now helping the education part. Intel has developed mobile Internet hubs for use by the less fortunate. Brazil uses a broadcast distance learning system to benefit 60,000 schools. Because of IT, our friend Bill Gates has the money to help GAVI (Global Alliance for Vaccines and Immunization), with a grant of US$750 million to help vaccinate kids worldwide.

My wife and I were recently invited to observe a weekly soup kitchen at the bottom of the South Superhighway and Pasong Tamo, right beside the PNR tracks and right under the MRT. In our group, the hardworking and humble teachers of the Reach Youth Ministries (e-mail [email protected]) gathered close to 80 children ranging from ages 5 to 15 for an hour of catechism and then a bowl or two of chocolate oatmeal.

These children wait patiently for their "Reach Youth" teachers every Saturday along the rails. Almost 3,500 kids learn a little bit of good and get a little bit of God’s blessing every week. Most of these kids have tattered clothes, most have no shoes, bathing and hygiene are not among their normal habits, and unfortunately, I don’t think they eat regularly.

I am sure there are so many humanitarian groups like "Reach Youth" and church groups out there which are trying to help break that cycle but for a novice observer like me, some thoughts come to mind…Are they even making a dent? Shouldn’t we try to do something more structural? The answer I got, if we could help one, it is a start.

In a recent special report in Businessweek, there were several examples of how the poverty cycle is broken by IT or creative strategies. Brazil is using prepaid cards to encourage parents to continue to send their kids to school. Rural farmers are now using IT in India to get better market information to reduce arbitrage opportunities. In order to have micro-lending strategies work, you need a good back office system to keep those thousands of mini-loans together.

My Two Cents: Be thankful for what you have and share it! (Sorry, got a little prophetic there! You would be, too, if you saw these kids.)

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Dickson Co is CFO (C is for Cheap) of Dfnn, Intelligent Wave and HatchAsia. For comments and suggestions, e-mail [email protected].