Economic slowdown delays power crisis

The lingering global crisis has bought enough time to build new power plants in Luzon and Mindanao that was anticipated earlier to suffer electricity shortages very soon.

In earlier government projections, Mindanao was seen to be hit with brownouts next year and Luzon in 2011.

This was the assessment made by former energy czar Francisco Viray on the power sector situation in the country in the sideline of an exclusive interview for a book project on former President Fidel V. Ramos.

“The minimal 0.5 percent growth in the domestic economy last year, and an expected minimal growth this year have frozen demand for electric power in Luzon. The region will have sufficient baseload capacity until 2015,” the former energy boss, credited for solving the crippling brownouts in the early 1990s, said.

The same situation holds true in Mindanao, but the Visayas immediately needs 100 megawatts to meet the mounting demand for electricity in the central Philippine islands, he explained.

Viray, now president of Trans-Asia Oil and Energy Development Corp., a subsidiary of Phinma group of companies, said that the conclusion was made using a conservative 1.04 percent growth in electricity demand to fuel 1 percent of economic growth. The rule of thumb is a 1.5 percent growth in electricity demand to trigger every 1 percent growth in the domestic economy.

With minimal growth for two successive years, the Luzon grid still enjoys a comfortable 3,000 megawatts of reserve capacity, Viray pointed out. Luzon power plants can churn out 10,000 megawatts against the present demand of more or less 7,000 megawatts.

Also contributing to the postponement of crippling brownouts has been the rehabilitation of power plants in Luzon after most of them were sold out to private investors. When government runs old power plants, these usually run on only 50 percent capacity.

With the rehabilitation of some of the older coal and geothermal plants, their efficiency are expected to get closer to full capacity under private sector management. Most of the power plants in Luzon except one in Bicol, have been sold to private investors.

He said that had the crisis not happened, Luzon would have been in the brink of regular power outages since the present administration has not built any new plant in the past eight years. The last commissioned power plant in Luzon was the San Roque hydro-electric dam project in Pangasinan started way back during the Ramos administration.

Starting in 2016, Luzon will be needing an average of 500 megawatts of electricity every two years to sustain its economic growth.

More investments on power plants are needed in the Visayas now as the region depends on aging plants. Two small plants scheduled for commissioning next year might ease its power shortage problem but it will not be sufficient.

In Mindanao, there are ongoing power projects that will most likely avert any shortage in the near future, Viray said.

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