During a virtual forum on August 17, the Department of Energy (DOE) warned of “thin power reserves” that could likely coincide with the 2022 general election on May 9, 2022, with the temperature expected to peak around that time.
Although Energy Undersecretary Wimpy Fuentebella assured the forum attendees that “‘blackouts are unlikely to happen,” netizens were quick to speculate that the DOE under Secretary Alfonso Cusi, one of President Duterte’s close allies and party mates, was already conditioning the minds of the public that something amiss could happen come election time.
The thinning of power reserves usually happens yearly when the country experiences higher temperature during the dry season. This could result in higher demand and lack of water for the hydro plants, which could force plant outages. In assuring that no power interruption would happen during the election, Fuentebella said: “We have been looking at this very early on, so the preparation is quite early.” In 2018, Cusi had signed a circular creating a task force that would ensure reliable power supply during the election.
This year, when demand exceeded available power supply, Luzon was placed under red alert for three straight days, from May 31 to June 2. The Luzon grid had lost capacity amounting to 1,372 megawatts because of the paralysis of unit 2 of the Pagbilao coal-fired plant; units 1 and 2 of the GNPower Mariveles Energy Center’s coal-fired plant, and unit 2 of the Calaca coal-fired plant. When three units of the San Roque power plant went offline, the grid also lost some 435 MW. The result was a total of 2,126 MW diminished yield from power plants, including the 484 MW from KEPCO Ilijan Corp.’s gas-fired plant. In addition 1,642 MW from other coal, oil-based, and renewables plants were deemed “de-rated.”
Cusi put the blame on the National Grid Corp. of the Philippines (NGCP), saying the privately owned consortium of Monte Oro Grid Resources Corp., Calaca High Power Corp., and the State Grid Corporation of China, was “consistently noncompliant” with the requirement to secure “firm” contracts for ancillary services, which commit the supplier to deliver, unlike in the case of “nonfirm” contracts where power companies have a leeway to not deliver.
The claim was rejected by lawmakers who pointed out that the DOE was solely responsible for the brownouts because it failed to design ways that would have stabilized the country’s power supply. Senators Franklin Drilon, Sherwin Gatchalian, Aquilino Pimentel III, and Francis Pangilinan expressed dismay over what they thought was the DOE dodging any accountability for the debacle.
This just highlights the dire warning of experts that the Philippines is facing mounting energy crisis as a result of the depletion of the Malampaya gas fields, which account for 30 percent of Luzon’s energy consumption. While pandemic concerns are virtually putting the power crisis in the back burner, 2024—the year that Malampaya is expected to exhaust all of its reserves—is looming. The situation is worsened, not only by an ever-increasing population, but by the Duterte-mandated infrastructure boom and staggering electricity costs.
Experts calculate that an additional capacity of around 43 gigawatts is needed by 2040. Sadly, the Philippines lags behind schedule in working out doable solutions. At present, the country’s energy mix is composed of coal (47 percent); natural gas (22 percent); renewable energy sources, such as hydro, geothermal, wind, and solar (24 percent), and oil-based (6.2 percent) with existing power reserves at 23GW.
Last month, Cusi reiterated his directive to strengthen efforts to achieve power security targets, focusing on optimizing the capabilities of the liquefied natural gas sector, “[f]rom importing the gas, establishing the necessary infrastructure to help the sector progress from its current infancy stage, and seeing the country develop into a leading LNG hub in Asia.”
Records from the DOE-Natural Gas Division show that several LNG terminal projects have already been issued with Notices to Proceed.These projects are: Excelerate Energy L.P.’s Floating Storage Regasification Unit Liquefied Natural Gas Terminal project; Atlantic Gulf & Pacific Company of Manila, Inc.’s Floating Storage Unit and Onshore Regasification, as well as its 60,000 cubic meter buffer LNG storage tank project; Shell Energy Philippines, Inc.’s FSRU Terminal project; Vires Energy Corp.’s FSRU terminal and FGEN LNG Corp.’s Interim FRSU and LNG Terminal project.
But what looks like a positive development in Cusi’s LNG target is the expected commissioning of the first phase of Energy World Corp.’s LNG Pagbilao hub and its 400 megawatt capacity in mid-2022.
The project, hounded by years-long bureaucratic red tape and lack of government support, is mostly built, while the important transmission line and switching station to connect the plant to the main grid are on track for completion by June 2022, with major roadblocks to completion recently resolved. Once operational, EWC intends to install a 200MW steam turbine. Similarly, final stages of development of its 2-metric-tons-per-annum LNG facility are on track for initial production by late 2022.
Actually, the Pagbilao LNG plant has been 95 percent complete for a long time now. The only thing that was keeping it from operating is an infrastructure that would have allowed it to export power. Had it been given all the necessary assistance as a courtesy to a foreign investor, which has invested millions of dollars in the project, EWC’s LNG plant could have started exporting power years ago. The NGCP, mandated to encourage power producers to export power on a first-come-first-served basis, had rejected EWC’s request to hook its plant—notwithstanding that it was technically feasible to do so—to the existing power plant because of the opposition of TeaM Energy, operator of the Pagbilao coal-fired plant.
The expected power crisis will most likely be inherited by a new government. No doubt, the global pandemic will further complicate efforts to achieve energy supply for the country. The new administration should be well-equipped in balancing pressing concerns: from battling the coronavirus to lifting the Philippines from the economic pit it has fallen in the past six years. Whoever takes over the reins of the country should pursue all practical solutions that would benefit every sector. The task is gargantuan and the challenge is formidable. Our nation needs a leadership that is all at once competent, bold, prudent, collaborative, decisive, just, and most importantly ethical.
