Summit to tackle power issues

By Mia A. Aznar

Wednesday, April 24, 2013

THE high cost of power and other issues affecting the sector will be discussed by energy stakeholders in the Visayas in a summit this Friday.

The Visayas Power Summit aims to update participants on the current reforms and future scenario of the power industry, discuss policy issues and concerns on the Electric Power Industry Reform Act (Epira) and its implementation, encourage the sharing of ideas related to power issues raised by stakeholders, and gain collective action towards resolving issues affecting them.

Organizers expect to hear policy and project recommendations that are geared towards making the Visayas more competitive in terms of providing adequate, reliable and reasonably-priced power needed for higher growth to improve the power situation for the three regions in the Visayas.

The summit program will feature a presentation by Energy Secretary Carlos Jericho Petilla, who will present the draft 2013-2030 Philippine Energy Plan. The presentation will include the current energy situation, policy thrusts, energy supply and demand outlook, generation sector reforms, transmission sector reforms, renewable energy and FIT (feed-in-tariff) rates, and retail competition and open access.

Regulatory framework

The Energy Regulatory Commission will also present its regulatory framework. This will be followed by a workshop for participants to discuss their issues and concerns.

Petilla and ERC tariffs and rates division chief Alvin Jones Ortega are scheduled to react to their outputs.

The Central Visayas RDC has made efforts to tackle the high cost of electricity with executive meetings held twice in 2012 and a planning dialogue and workshop on power issues last January. The meetings have produced at least 20 issues and
recommendations. The power dialogue listed the conduct of the Power Summit as one of the immediate actions needed for implementation.

Petilla approved the holding of the summit last March during a consultation meeting with RDC 7 Chairman and Cebu City Mayor Michael Rama and the RDC 7 Secretariat. The hosting of the summit is a collaboration between the RDC 7 and DOE.

A power profile prepared by the RDC 7’s subcommittee on power lists high power costs as one of the challenges in the power sector of Central Visayas.

“Power rates remain high. This represents financial burden to the consumers and at the same time serves as deterrent to the inflow of more investments,” the profile stated.

The committee identified high line rental and site-specific loss adjustment charged by the Wholesale Electricity Spot Market (WESM) to the distribution utilities, inefficiencies in the transmission system, perks of distribution utilities that are passed on to consumers, value added tax and local taxes, high system losses of distribution utilities and the diminished government subsidy to the power industry as causes for the high cost of power.

They also consider attaining 100 percent household and barangay electrification coverage a challenge as two distribution utilities are yet to achieve 100 percent electrification coverage of their potential barangays while eight distribution utilities are still to attain 100 percent electrification coverage of their potential households.

Ensuring that required generating capacities are in place is an added concern for the subcommittee, as proposed capacity additions need to go on stream to ensure dependable capacities meet the required capacities of the system.

Peak demands

“While generating capacities emanating mostly from coal-powered plants were added in recent years, efforts need to be intensified to pursue further capacity additions in the succeeding years to meet the projected peak demands. The years beyond 2014 are considered critical, as the required capacities become greater than dependable capacities,” the subcommittee reported.

The 37 generating plants and three power barges in the whole of Visayas have a generating capacity of 2,272.24 megawatts with 83.72 percent or 1,902.28 megawatts considered dependable, as of December 2012.

The bulk of the power generation in the Visayas is accounted for by the Cebu and Leyte-Samar subgrids, with 38.56 percent and 33.21 percent of installed capacity, respectively.

Geothermal-fired power plants are the dominant energy sources in the Visayas, comprising more than one-third (914.20 megawatts) of the installed and dependable capacities. Fossil fuels remain the major contributors to the generating capacity, accounting for nearly 60 percent of installed and dependable capacity. The rest are contributed by renewable energy sources.

Demand forecast

As for power demand, the demand forecast for Visayas grid is expected to rise to 2,331 megawatts by 2021, from just 1,567 megawatts in 2012, showing an average annual growth rate of 4.5 percent over nine years. By 2015, the required capacity of 2,071 megawatts becomes greater than the dependable capacity of 2,065 megawatts.

Among the Visayas subgrids, Cebu has the highest demand, surpassing the combined demands of Panay, Leyte-Samar and Negros subgrids, while Bohol has the lowest.

However, Bohol is projected to grow the fastest among the Visayas subgrids at an average annual rate of 4.6 percent from 2012 to 2021.   source