El Niño exposes power sector’s vulnerabilities

THE MANILATIMES
2010 YEARENDER

WITH the Philippines hit by one of the worst El Niño episodes in years, the extreme weather conditions of 2010 exposed the power sector’s inability to render reliable support to the country’s electricity needs.

For the most part of the year, the whole country suffered intermittent power disruptions as hydroelectric plants were shuttered by low water levels in reservoirs while electricity use picked up as consumers turned on more cooling appliances.

The situation was also aggravated by the maintenance shutdown of a number of power plants, which were scheduled earlier in preparation for the national elections back in May. Repairs on other generating facilities that just kept bogging down one after another also added to the problem.

The end result had the new faces at the Department of Energy scrambling for temporary measures since day one of the Aquino administration.

“The problem is we cannot solve today’s power requirements tomorrow. It takes years of planning,” DOE Secretary Jose Rene Almendras said.

Stop-gap measures
The DOE has already asked private generating companies to speed up the rehabilitation of their power plants and to invest in new ones while subjecting existing energy contracts under scrutiny.

The government also delayed the sale of some of state-owned National Power Corp.’s remaining big-ticket generating facilities.

Despite the short-notice, the DOE chief said that they have managed to get commitments from the private sector—at least for the medium term.

Government has forecast that the country would be short of at least 300 megawatts in 2011 and another 300 megawatts in 2012, unless new generating capacities come in.

The DOE is eyeing liquefied natural gas barges, generators used by industrial and commercial establishments, and diesel and oil-based generating facilities that could be connected to the grid at a fraction of the time it would take to put up conventional power plants.

“Now we’re doing evaluation for quick-fix that would not be as problematic as before,” he said.

This, however, is easily said than done as an unprecedented growth in electricity consumption this year is threatening to push up the projected power supply shortfall.

Power still running low
Manila Electric Co. (Meralco), whose franchise area accounts for nearly half of the country’s economic output, recently registered a 10-percent increase in sales, nearly four times its average growth rate of
around 2.4 percent the past five years.

Oscar Reyes, Meralco senior executive vice president and chief operating officer, said the growth’s impact on power supply was evident this year with reserves unable to meet the grid’s regulatory requirements.

“This year, we’ve noted a lot of the yellow alerts where the reserves levels are lower than the biggest capacity of 600 megawatts. And we’ve seen quite a number of these yellow alerts,” he said.

Raul Concepcion, chairman of the lobby group Government Watch, expects the increase in economic activity to continue next year because of the positive outlook on the Aquino administration.

“For as long as everybody feels the momentum that we’ve got to make it this time or we’ll never have the chance to make it,” he said.

The business community anticipates the growth in demand would be sustained in 2011—and the power sector is worried that another dry spell may hit the country, especially in Mindanao, which relies on Napocor’s hydroelectric plants for more than half of its requirements.

“For Mindanao, I think it’s going to be challenging. We are short; there’s not much that can be done.
Although the dam levels are very good, there are a few maintenance work that’s going to be needed,” Concepcion said.

“I think we’re looking at March as a peak problem for Mindanao and then another one in June based on the schedules we’ve seen and discussed,” he added.

For the rest of the country, however, the Philippine Atmospheric, Geophysical and Astronomical Service projected rains to fall until March next year.

“That means that’s going to be good for us on a temperature side [because] that means electricity demand will not go as much as last year,” Almendras said. –EUAN PAULO C. AÑONUEVO REPORTER, Manila Times