MY original topic for today’s column was unfortunately trapped inside my home computer at about 10:55 am yesterday, when a sweeping power outage began and affected a large part of Metro Manila and provinces to the south.
We were warned, of course; all week long, the National Grid Corporation of the Philippines (NGCP) had been raising “yellow” and “red” alerts that power reserves for the Luzon grid were either very low or in some cases deficient, and that power rationing was a strong possibility.
That finally happened yesterday, when a combination of high demand in the hot weather and too many generating facilities being off-line for one reason or another resulted in a significant power shortage. A wide area stretching from Quezon City to Batangas was affected, with outages lasting from two to four hours in most places.
The country has been experiencing this kind of inconvenience for more than 20 years, so the howls for “investigations” coming from the Legislature, the Department of Energy, and citizens’ groups do not seem likely to result in any sort of solution. The issue has been, at this point, investigated ad nauseum, without any conclusion other than the most obvious one ever having been reached. The country simply does not have enough power, and will continue to suffer as long as the creation of new capacity continues to lag behind the growth in demand for power.
The lack of adequate power generation assets is one problem, but the immediate worry of all those wishing for the current crisis to be “investigated” is the handling of the assets currently exist. If everything was working properly, the Luzon grid should have enough electricity to meet immediate demand, plus a margin of 1,000-2,000 MW. It is not a lot of reserve power, but enough to cover an unexpected problem at one generating plant or in part of the grid.
There seems to be three reasons for this is not the usual state of affairs. First, the power plants, even the newer ones, are evidently maintained as economically as possible, with no more effort expended than what is absolutely necessary to keep them running. Second, there is a widespread belief, which has yet to be substantially refuted, that power plant operators and possibly distributors like Meralco are colluding to keep electricity prices high by selectively taking plants off line; the smaller supply available as a result causes a spike in prices on the wholesale market, just at a time when demand is very high.
A third reason, which most would like to believe is highly unlikely but which again has yet to be firmly debunked, is that plant outages are at least partly politically motivated.
President Rodrigo Duterte’s tough talk about ‘taking on the oligarchs’ and his appointment of people like Manny Piñol at the Agriculture Department, Nick Faeldon at Customs, avowed consumer advocate Al Cusi at the Department of Energy, and human wrecking ball Gina Lopez as DENR Secretary is making the business class nervous, to the extent that they may be desperate enough to send a message: Cooperate with us, or we’ll put this country in the dark.
Regardless of what the reason for yesterday’s huge blackout was, whether it was one of the above speculations or some combination of them, the issue of expense, unreliable electricity is not going to be solved by tough talk by the Duterte administration. Duterte might be able to threaten or cajole the existing generation companies into performing better in the short term, but tough talk will not cause new power plants—the actual long-term solution—to spring forth from the ground.
Whether Duterte and his team have the patience—and the diplomatic skills—to manage the complex task of encouraging the development of new power generating assets in Luzon and elsewhere in the country remains to be seen. Under fairly trouble-free circumstances, it takes between three and five years to raise and operate a conventional sort of coal- or gas-fired plant; smaller, localized green energy projects can be implemented more quickly, but a lot more of them would be needed. If the government started today, it could present tangible improvements by the second half of Duterte’s term; but that requires a significant change in approach to the problem. That change does not seem to be coming yet.