Electricity demand growth outstrips new capacities

By Myrna M. Velasco – June 7, 2019, 10:00 PM
from Manila Bulletin

The report cited that demand for electricity in 2018 had expanded 5.7-percent to 99,765 gigawatt-hours despite slowdown in economic growth while power supply in terms of capacity installations grew at slower rate of 4.8-percent.

As of last year, the energy department logged total installed capacity of 23,815 megawatts (MW) from a lower base of 21,730MW in 2017. The capacity additions for last year, according to the DOE, hovered at 933.6MW.

The manifest brisk demand growth then has been keeping energy officials awake at night because it won’t take long before increasing electricity needs of the Filipinos could outstrip available supply that could result in brownouts.

This is the reason Energy Secretary Alfonso G. Cusi has been re-aligning priorities in his department, with sharp focus on cornering new power investments.

But with an “over-litigated” and “over-legislated” power sector, plus the threats of incentive system overhaul under the Tax Reform for Attracting Better and High Quality Opportunities (TRABAHO) Bill, the odds are not exactly in the energy chief’s favor in cornering these much-needed investments – to which many experts claim as a disaster in a highly-technical and complex sector not dominated by the real experts, but mostly by lawyers.

In summer months this year, the biggest power grid of Luzon has already been recurrently tormented with “yellow” and “red” alert conditions – indicating not just tightness of supply but the lack of it during peak demand, hence, triggering unwanted brownouts.

Cusi realizes that his three-year window is already running tight as he called for a revisit of DOE’s medium term action plan.

“We must think, serve and formulate the appropriate policies in accordance to what will help bring accessible, reliable and affordable energy throughout the entire country,” the energy chief said.

Under his tenure at the department, not a single power project of massive scale baseload capacity has reached “committed capacity” phase yet – and even greater “brownout danger” lurks following a Supreme Court decision that invalidated at least 90 power supply agreements of both existing and forthcoming power projects.

Even with that major roadblock however, Cusi is pragmatic that new power investments will flow starting this year until the 2022 culmination of the Duterte regime, so it can satiate the country’s long term energy demand.

“The department will fast-track the contracting of new generating capacities for 2023-2030,” Cusi stressed; noting that one development to that has been investment interests sounded off by Japanese investors in the recent visit of Duterte in that Asian neighbor.