Brownouts and a blame game

 

Rey Gamboa - The Philippine Star August 27, 2021 | 12:00am

https://www.philstar.com/business/2021/08/27/2122839/brownouts-and-blame-game

 

The buzz about brownouts these days has more to do with the coming 2022 May elections, an understandably and legitimate concern of Filipinos who fear of poll results manipulation should there be an erratic power supply situation in the country.

Overlooked, though, in the midst of this buildup of political keenness, is the likely return of brownouts because the economy is moving to a more normal gearing despite the coronavirus’ efforts to stay alive while the world is trying to smother it through vaccinations.

We, as a nation, have learned so much these past 15 months going through what is regarded as one of the harshest lockdowns imposed by a government on its people. Now, local governments have become adept at adopting granular lockdowns to as small as a household.

Vaccines, subject to the arrival of supplies, are quickly dispensed into the arms of more people who wish to be protected from severe illness and hospitalization caused by the virus, and to continue working and bringing home money.

Thus, even as this more deadly Delta variant is raging, there is scope that this lockdown – and future ones – will be focused on smaller areas and shorter. Compared to last year, more people are now able to continue working or can expect to return to work in the next few weeks.

This latest lockdown may trigger another downward revision in GDP forecast, but its length will likely not drag on for a year. The incoming “ber” months, hopefully, will allow our daily wage workers to eke out a living and look forward to a less dreary Christmas celebration.

 

Severe pressure

That said, the country’s power generation sector will be under severe pressure to meet a renewed robust demand for electricity in the coming months as more manufacturing and commercial establishments return to normal operations.

The onus will be, as the Department of Energy (DOE) puts it, on the private sector owners and operators of power plants, especially those that are amiss in implementing maintenance and backup measures to prevent unplanned power plant shutdowns.

The summer of 2020 was a first in many years when no rotational brownouts were called, largely because of the non-operation of many manufacturing and commercial businesses due to the COVID-19 lockdown. This year, however, as the demand for electricity started to rise, with lockdowns easing and the economy reopening, a number of red flags were raised signaling power interruptions.

The brownouts that happened from May 31 to June 2 were subjected to legislative questioning, and blame was heaped on the National Grid Corporation of the Philippines (NGCP), a privately owned company that owns the franchise to operate the country’s state-owned power grid.

 

Who’s at fault?

In the ensuing blame game, the DOE accused the NGCP of not securing the necessary ancillary services to serve as a back-up power source in the event of unplanned power plant outages. The NGCP, created in 2009 by law, took over many of the functions of the National Power Corp. before the government deregulated the power sector.

The DOE said that it has repeatedly asked NGCP to secure the ancillary services with power suppliers through firm contracts to bind them in delivering top-up supply whenever needed, especially when unexpected power generating plant shutdowns occur.

Without such firm contracts, suppliers can opt to refuse to sell their power to NGCP, and instead divert excess electricity to the wholesale electricity spot market, often at a high price because of a demand surge created when a base load generating plant goes off grid.

Last month, the NGCP sent the DOE a letter seeking for clarification on the DOE directive requiring the conversion of non-firm supply contracts to firm contracts which hopefully will be resolved soonest to avert another round of future outages.

Separately, the DOE also accused the NGCP of delaying its required submission of a grid operations and maintenance program (GOMP), which contains the schedule of maintenance and planned outages by power plants as required by a departmental policy.

The NGCP countered that the delays in the GOMP submission for 2020 were caused by needed clarifications from the DOE. It added, however, that the GOMP for 2021 to 2023 had already been submitted to the energy department for approval.

Clearly, these blame exchanges need to be resolved to avoid future brownouts.

 

DOE initiatives

For now, the DOE is banking on other measures to shore up power reserves. One will be to link more than 2,000 megawatts of stranded capacity in the Luzon grid to the transmission grid through new investments in appropriate power lines.

Energy Secretary Alfonso Cusi is also banking on the increased contribution of renewable energy (RE) to the current power supply mix, especially since solar and wind technologies have become competitive to coal and diesel fuel sources.

Efforts are, likewise, being exerted to speed up the construction of more terminals that will receive imported liquefied natural gas (LNG) to substitute for that which is pumped from the Malampaya natural gas fields which is reaching its end-life.

All the above DOE initiatives are not without their unique challenges, especially since many charter new frontiers that were never even imagined two decades ago when the government decided to privatize the electric power sector.

Even if the transfer from state hands to a deregulated environment has been slow and continues to be impeded by kinks, the power industry today is definitely on better keeling than it was before. Many may have already forgotten those days when daily brownouts disrupted our meals and sleep, and threatened to bring the whole economy to its knees.