A looming energy crisis?
This is probably the question that is foremost on everyone’s minds next to the COVID-19 pandemic.
As early as August of last year, alarm bells were already sounded by the Department of Energy (DOE) on the “thin power reserves” that would most likely happen at about the same time as the May 2022 elections, though they gave the assurance that there would be no blackouts.
Thin power reserves usually happen every year when temperatures are higher during the dry season, with the corresponding increase in demand.
Last year alone, demand overpowered (no pun intended) available supply, brought about in no small part by the increased need for more electricity due to the quarantine that forced people to work from home and attend school from home.
This, coupled with the warning about the depleting Malampaya gas fields that account for around 30 percent of the energy consumption in Luzon alone, and the situation looks all too grim.
2024 is the year when Malampaya is expected to exhaust all of its reserves.
Not only that. Warnings have also been made about a looming energy crisis on a global scale, the clarion call made also as early as October of last year where skyrocketing prices of both natural gas and coal, not to mention the increasing price of oil, painted a bleak picture of a global energy crunch.
Last October 2021, in a webinar on energy security, I posited that an energy price surge and supply side problems would abound. China, Europe, India, and the United States are facing a power supply shock. If it hits China, the power curbs will ripple through and impact the global economy and markets. It’s not a question of if — but of when — it will hit the Philippines.
There is also mounting pressure on governments around the world to accelerate the transition to green energy in the face of the critical climate summit last November.
But then, here comes the Russian invasion of Ukraine, which exacerbated the already precarious energy situation.
Energy experts say that an additional capacity of 43 gigawatts is needed by the year 2040, but that the Philippines is also lagging behind in coming up with workable solutions.
Our current energy mix is 47 percent coal, 22 percent natural gas, 24 percent renewable energy sources (hydro, geothermal, wind, and solar), and 6.2% oil. Existing power reserves stand at 23 gigawatts.
What is being done in this regard?
On our radio program Kontra Birada on DZRJ 810 AM — Voice of the Philippines — and Radyo Bandido TV, together with my co-host, Atty. Karen Jimeno, we recently had as our guest Joe Zaldarriaga, spokesperson and vice president for corporate communications of Meralco, to shed light on the situation and on what was being done about it. As we all know, Meralco is the largest private power-distribution utility.
According to Joe, they are closely coordinating with the Department of Energy (DOE) and other members of the industry to ensure sufficient supply of electricity this summer. Joe explained that the data on the energy situation really comes from the DOE and from the National Grid Corp. of the Philippines (NGCP) and that they were the ones who would give the assurance if we have sufficient supply or not.
Joe said that we may have sufficient supply, but, however, he clarified that we had what was called installed capacity and dependable capacity, and that what industry stakeholders were doing was to ensure that the dependable capacity was sufficient so that there would be no problems during the dry season where electric consumption and demand is at its highest.
Joe also explained that, historically, demand increases during the so-called summer months, that there is usually a 10- to 40-percent increase in consumption from March to May.
To prepare for this, Meralco will be doing three things:
First, an additional 350-megawatt supply from interim power supply agreements or PSAs in anticipation of demand increase. This is obtained through competitive selection process or CSPs, which are actually bidding processes.
The ongoing bids were based on Meralco’s Power Supply Procurement Plan (PSPP) posted on the Department of Energy’s (DOE’s) CSP Portal. The PSPP is the distribution utility’s plan for the acquisition of a variety of demand-side and supply-side resources to cost-effectively meet the electricity needs of its customers.
Second, not only does Meralco deal with getting more and a stable power supply, it also implements what is called demand side management measures to teach consumers how to use electricity properly so as to eliminate wastage and allow more power supply allocation.
Third, it also implements the Interruptible Load Program (ILP) to avoid manual load dropping. Basically what this does is request big-load consumers to use their own generator sets during certain hours so that there will be bigger allocation for other smaller consumers.
In the CSP, what they look for, as Joe enumerated, was transparency, the least cost possible, and to secure adequacy, efficiency, and supply capability.
Joe also mentioned that not all the supply comes from bilateral contracts and that they also take advantage of the spot prices in the market, specifically the Wholesale Electricity Spot Market or WESM. Once summer comes in, though, prices in the market do spike.
It is worthy to note that Meralco has one of the lowest rates in the country.
It goes without saying that electricity is a most important commodity in our lives today. And, just like a lover or a loved one, you will not realize how important it is until it is gone.
I am glad to note that Meralco is doing all that it can, round the clock, in anticipation of the so-called looming energy crisis. Let us also do our share in conserving energy, not just for the good of our pockets, but also for our environment.
I will continue this discussion on the looming energy crisis and look at a potential energy source that is most viable but has escaped our sights for some time now.
I am, of course, talking about nuclear energy. Perhaps now is the time to give it a reboot and a rethink.
Abangan.
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