Building of more power plants must start now

Electricity and power are among my favorite topics to discuss, because of their urgency and importance in this administration. As I always like to drill through to the minds of my readers, in order to fully achieve the Golden Age of Infrastructure and to maximize the “Build, Build, Build” thrust of President Duterte, our country desperately needs additional capacity to add to the power grid in order to meet growing demand. But where are we going to get this power?

The Philippines must fast-track its building of new power plants.

Fortunately, there are moves being made and strong opinions being voiced by the government, as shown by the recent statement of Marinduque Rep. Lord Allan Velasco, chairman of the House Committee on Energy, on the urgent need for additional power supply.

Both private and public sectors should heed his call. I truly believe that the government and regulator must take the lead in this push for the construction of new power plants. But first things first: biddings have to happen and contracts have to be signed.

It is true, there has been progress made in the past couple of months.

But we cannot stop the momentum.

Rep. Velasco stated as a follow-up to Meralco’s recent Competitive Selection Process (CSP) which resulted in the award of Power Supply Agreements (PSAs) that very price competitive and lower than prevailing generation charges, he hopes that the Department of Energy (DoE) and its head, Secretary Alfonso Cusi, as well as industry players and stakeholders, act swiftly on the next round of biddings for much-needed greenfield baseload capacity.

With the increasing demand for power projected for the coming years, our country urgently needs additional capacity to support the administration’s golden age of infrastructure.

There is no room for complacency. The record number of Yellow and Red Alerts that plagued Luzon Grid consumers this year should not be allowed to recur in the coming years. We experienced red alerts this year even outside of the summer months.

This is extremely alarming, because it means that even in the cooler months, as we approach the Christmas season, the power supply situation of the Philippines is still dangerously thin. If one power plant goes off for one reason or another, this will automatically deplete the power supply immediately, possibly leading to brownouts and rotating blackouts.

I am one with the Energy Committee as we look forward to the start of the next round of bidding for new baseload capacity. And it needs to happen as soon as possible. If new bids can open this week, the better!

The start of the next round of CSP bidding will definitely be a welcome development for Filipinos, as this is aligned with the Duterte administration’s goal of bringing down the cost of electricity and ensuring a steady and continued supply of power in the country.

I also hope that the other distribution utilities and electric cooperatives will be able to expedite their own CSPs, in strict compliance with the DoE’s CSP guidelines, to support the building of greenfield power facilities.

Distribution utilities need to balance out their PSA portfolio with new plants to improve system reliability. Given the 20-year term of the PSA, brownfield plants that have been in operation for several years now are less likely to remain reliable and ensure delivery for the entire term, to the prejudice of the customers.

Greenfield plants, on the other hand, will be the country’s best option to help ensure longterm, reliable power supply to the grid, at best cost, which will directly benefit the consumers.

We, as consumers, should call on both public and private sector to boost such crucial government initiatives in finding ways to provide adequate power supply at lower costs to the end-users.

As pointed out by the young Marinduque congressman, the next round of CSP bidding and the fast-tracked construction of new power plants will complement the landmark Republic Act No. 1371, Murang Kuryente Act signed in August, 2019, setting the stage for this milestone effort to make available a reliable, resilient and inexpensive energy supply to Filipino consumers.

All the politics must end and all the red tape must be cut to make way for growth and progress, to further elevate our country and people. And then we can truly say our consumer welfare is being protected.