The Philippines’ power situation: improving but…

Forecasts made in 2014 of a Philippines crippled by massive power outages in the summer of 2015 have not come to pass in its entirety – much to the relief of businesses in Luzon. But the energy picture is mixed in the Visayas and Mindanao.

The current energy outlook for the Visayas is hardly cause for serious concern and got a boost from the operation of the new 164 megawatt (MW) coal-fired power plant of Panay Energy Development Corporation in Iloilo City.

Visayas now has a total installed capacity of 2,358 MW and a gross generation of 5,801 Gigawatt hours. Peak demand might reach 1,711 MW this year and is expected to rise to 1,774 MW in 2016 and 1,840 MW in 2017.

Geothermal power remains the main source of power in the Visayas, accounting for 39% of installed capacity and 54% of the gross generation. Coal-fired power plants provide 33% of the installed capacity and 42% of gross generation.

On the other hand, Mindanao was hard hit by the power crisis that carried over from 2014. Zamboanga, for example, suffered 60 hours of power interruptions in March alone and blackouts lasted from six to eight hours a day during the first four months of this year.

Mindanao relies on hydroelectric plants for 52% of its power while 31% of its power comes from coal-fired plants. As a solution to Mindanao’s overdependence on hydro, private firms are backing the building of more coal-fired plants so that by 2020, the power mix will have changed to 56% coal and only 24 % hydro. The capacity of the Mindanao grid stands at 1,386 MW and its system peak at 1,378 MW, said the National Grid Corporation of the Philippines.

The national power situation should brighten substantially by the 2020s when as many as 23 coal-fired power plants might come online, said the DOE. These plants will go some way towards meeting projected power needs of 500 MW by 2016 and 8,100 MW by 2030.

Among these 23 new plants are two 300 MW plants in Davao City that will start producing power in 2016 and 2017; a 400 MW expansion of existing facilities in Quezon province to come online by 2017 and a 300 MW plant owned by of RP Energy at the Subic Freeport Zone to begin operating in 2016.

Government plans call for power projects to add 868 MW to the grid from 2013 to 2016. DOE, however, said the national grid will need an additional 500 MW by 2016 and 8,100 MW by 2030. Peak demand in Luzon is expected to increase at an annual average of 4.1% to 16,477 MW in 2030 from 7,969 MW in 2012. Despite its challenging power situation, the Philippines was recently named by the World Bank as one of the leading countries that provide electricity to its citizens.

But the addition of all these new power plants (all coal fired) carries its own dark clouds – more pollution. And the cheap coal sparking the building of these new polluting plants also stands to weaken renewable energy sources to such an extent the Philippines will fail to attain its goal of deriving 30% of its electricity from renewable energy by 2030 when demand for energy is expected to exceed 30,000 MW compared to today’s 12,000 MW.

This checkered future for the Philippines two major sources of electricity (fossil fuels and renewable energy) in no way minimizes the pressing need for both energy efficiency and energy conservation as the cost of power is expected to remain among the highest in Asia for the rest of this decade. Renewable energy producers got another boost with the announcement this June the DOE is crafting a new policy that will ensure the future growth of renewable energy. DOE’s fuel mix policy wants 30% of the country’s total energy to come from renewable energy; 30% from gas and 40% from other sources such as coal.

And there’s this race to get new capacity online to replace the capacity being supplied by many ageing power plants whose unreliability is causing many unscheduled shutdowns. Politics is further complicating the energy outlook since the new administration that will take over the reins of government in 2016 will have its own energy agenda that might be radically at odds with that of the outgoing Aquino administration. The new administration will also have to learn the ropes, and learning often comes at the price of committing unnecessary errors.

Ensuring energy security and safeguarding capacity, however, will not wait. What is needed is a solution that bridges the gap between this administration and the next. The ECCP proposed in a letter to President Aquino that there is an urgent need for an Energy Committee modeled after the National Competitiveness Council. This committee will create a strong public-private partnership with full transparency, and will help ensure the energy crisis becomes a relic of the past. [email protected]