Above-target economic growth giving DOE’s Petilla headache

Business Mirror

Published on Sunday, 08 September 2013 19:16

Written by Lenie Lectura

ENERGY Secretary Carlos Jericho Petilla sees a downside in the 7.5-percent economic expansion in the second quarter of the year. With the economy growing above forecasts, Petilla said the pipelined power plants may not be able to meet the vastly increasing energy needs in the near future, particularly in Luzon.

“While all of us pray that we hope the country can sustain its strong growth rate, we, at the DOE [Department of Energy], are worried,” Petilla said.

He is worried because the new power-generating plants that will be put up in the near future—or in about two years—were based only on a projected economic growth rate of 6 percent, while actual growth is well above 7 percent.

“Actually two years ago, we were looking at a projection of 6.6 percent. The power plants that are being built now will be finished in two years time. The growth rate then was actually 6 percent but now it could be more than 7 percent,” Petilla said.

If the Philippine economy continues to expand by over 7 percent in the coming months and in the couple of years, Petilla said the power supply may not keep up with the growing demand from the industries and the population.

And, Petilla said, the worst case scenario could be rotating brownouts in Luzon during peak hours, or 11 a.m., 2 p.m. and 7 p.m.

“If you will look at the graph, we can solve the power crisis in Mindanao. But in Luzon.… I am not saying we don’t have future power supply, but we have to cope up with the growth rate. There will be [additional capacity] but it is in the wrong time,” Petilla said.

But the energy secretary said the power outage could only happen if he lets it happen.

“It’s not going to happen because I will not allow it to happen. But the scenario, if I sleep on it, is that there will be an hour or two of brownouts during peak hours. But we are doing something about it. The good thing about long-term planning, if you already know the problem, is you actually scavenge for every possible resource that you can have and that’s what we’re doing right now,” Petilla said.

Solutions could include the establishment of an electricity reserve market and gas-fired power plants, which could only take 12 months to 18 months. Also, Petilla said power-plant operators could be asked to reschedule a maintenance shutdown of their facilities from summer months to rainy season.

However, the establishment of a reserve market needs the green light of the Energy Regulatory Commission (ERC).

“We have to set a policy first because until now the application of PEMC  [Philippine Electricity Market Corp.] has yet to be approved by the ERC since it was filed in 2009.  So what I’m trying to do now is I’m trying to make a simulation and within two weeks we will sit down with the ERC,” Petilla said.

The energy chief hopes that the reserve market can be put up in September next year. “There’s a slim chance but I’m hoping it will be approved. Why? Because we need to start now.”  source