New, modern power plants needed to sustain economic growth
THE
Philippines must continuously invest in improving the country’s energy capacity to attain energy security. As we continue to strengthen and improve the nation’s institutions, develop the country’s infrastructure, promote technological innovation, and pursue regulatory and structural reforms, we also have to carry out policies and programs that will improve the competitiveness and productivity of our industries. This cannot be attained without an efficient, secure and sustainable energy sector.
As the country’s economy continues to grow and expand, the Department of Energy (DOE) predicts that we will be needing 43,765MW of additional power-generation capacity by 2040 to meet increasing power demand. And with the anticipated completion of infrastructure projects under the government’s ongoing ‘Build, Build, Build!” program, the country will soon need sufficient power supply.
Easier said than done. Several private investors’ applications to construct new and modern power plants to replace those ageing encountered delays in the approval process. It takes about three to four years to build a power plant, and DOE said that by 2021 and 2022, the country’s power supply will be most critical. Hence, it is crucial to start building those plants.
Another reason for the delay is the ‘noise’ created by cause-oriented groups and personalities identified with the left, who always find a way to stir and pressure the government from approving pending critical power regulations, thereby, putting the country’s energy security at risk.
These delays hinder the development and construction of several baseload power plants, which are crucial to meet the country’s baseload requirements by 2040.
Add to these woes is the thinning of power reserves in the Luzon grid prompting the National Grid Corporation of the Philippines (NGCP) to issue a yellow alert for three consecutive days last week amid high summer demand and unplanned outages of generation plants. The scenario highlights the urgent need to boost the country’s supply and beef up the available reserves to avoid potential power interruptions.
We need to learn from developed countries like Japan and Germany which are utilizing advanced coal plants to supply their power needs. In Germany, for instance, coal still accounts for 37% of its electricity production.
Learning from the devastation of Fukushima Daiichi nuclear disaster six years ago, Japan has replaced about 54 nuclear reactors with highefficiency low-emission (HELE) 46 new coal-fired power plants.
Japan opted for coal-fired power plants equipped with the latest clean coal technology rather than going for renewables or natural gas after realizing that liquefied natural gas (LNG) would be prohibitively expensive in the long-term. Cost-conscious, the government has instead opted for the HELE coal plants for efficiency and establishing power plants that use less fuel and emit less climatedamaging carbon dioxide
The fact is the Philippines needs coal plants. By the sheer volume of the country’s rising power demand, it needs reliable sources of power to provide it with a stable baseload generating capacity. That will insulate major parts of the country from shortages and prevent speculators from playing the wholesale electricity spot market every time reserves become thin.
Today, coal is the least costly and most accessible fuel for some of the most dynamic developing economies. It fuels 42% of global electricity production, and is likely to remain a key component of the fuel mix for power generation to meet electricity demand, especially the growing requirement in developing countries, including the Philippines.
Unfortunately, the use of modern coal-fired power technology is an issue which leftist leaders seem to be unable to wrap their heads around. In an ideal universe, it would be hunky dory to have only clean energy. But the Philippine economy is not an ideal universe.
The left-leaning organizations are barking up on the wrong tree. Instead of blocking private investors’ plan to build new and modern power plants to provide the country a stable baseload generating capacity, they should look into power generation companies’ (GenCos) ‘profiteering’ in the Wholesale Electricity Spot Market (WESM).
These groups perhaps are not aware that GenCos are raking significant profits from trading intervals at WESM when supply really run tight in the system. The series of recent yellow alerts or power reserve-deficient conditions in Luzon grid propelled by forced outages manifests imprudent operations of a power system due to ageing power plants. While the spikes are happening, GenCos are gaining financially at the expense of electricity consumers.
If the country were to shift to exclusively renewable energy (R/E) sources, the 24/7 availability of power could not be assured, and building a humongous R/E capacity to replace more than 8,000 MW of power coming from coal and natural gas would be very costly. This will hit not only the competitiveness of Philippine industries but also the typical Filipino consumer.
No one disagrees with the use of R/E – except that right now, it is neither cheap nor reliable.
Studies point out that an entirely renewable energy structure would take time to build. The same studies propose an acceptable interim to allow the construction and operation of power plants that produce cheap energy and utilize clean technology.
What can we do now? Support the government’s effort to promote energy security and stop advancing interests for our own personal gains.
The bottomline: The country still needs baseload power plants to provide reliable, stable, and quality electricity to meet the consumers daily energy requirements and support the country’s growing economy.
Without the assurance of adequate and reliable power supply, foreign investors will continue to place their investments elsewhere in the region and ignore the business opportunities in the country.