* This is my article in BusinessWorld last April 28, 2017.
High economic growth means high energy demand coming from
stable supply and competitively priced energy, not unstable, intermittent, and
expensive energy. This is what the Association of Southeast Asian Nations (ASEAN)
economies need as their high GDP growth of 4.7% in 2016 is projected to improve
to 4.8% this year and 5% in 2018 (ADB data), much faster than the projected
growth of other regions and economic blocs.
One week before the ASEAN 50th Summit Meeting, the 7th
Annual Meeting of the Nuclear Energy Cooperation Sub-Sector Network (NEC-SSN)
hosted by the Department of Energy (DoE) was held. A pre-feasibility study
showed that many ASEAN countries are in favor of using nuclear energy for commercial
use. The ASEAN Center for Energy (ACE) also sees nuclear energy as a long-term
power source for the member-countries.
The intensive infrastructure projects of the Duterte
administration require huge amount of energy. The proposed 25-km. subway in
Metro Manila by the Japan government alone would require high energy supply for
the dozens of trains running simultaneously below the ground plus dozens of
train stations below and above ground.
Lots of base-load power plants, those that can run 24-7
all year round except when they are on scheduled shut down for maintenance,
will be needed. These baseload plants include coal, natural gas, geothermal,
and nuclear. Hydro plants too but only during the rainy season.
How reliable and how costly are the different power
generation plants that the Philippines and other ASEAN countries will need?
This table will help provide the answer as I have not seen data for the ASEAN
yet.
Power reliability is represented by plant capacity factor
or actual power output relative to its installed capacity. So unstable,
intermittent sources like wind and solar have low capacity factor, not good for
manufacturing plants, hotels, hospitals, malls, shops, and houses that require
steady electricity supply.
Power cost is represented by the levelized cost of
electricity (LCOE), composed of capital expenditures (capex), fixed and regular
operation and maintenance (O&M), variable O&M, and transmission
investment. CCS means carbon capture and sequestration.
The cost of ancillary services for intermittent sources,
the standby power plants if the wind does not blow or if it rains make solar
plants temporarily inutile, does not seem to be reflected in the transmission
cost though.
ASEAN countries like the Philippines will need those
power plants that have (a) high reliability, high capacity factor, (b) low
LCOE, and (c) low or zero need for ancillary services.
However, more ASEAN countries are entertaining more solar
PV and wind onshore since they were convinced to believe that they need
unstable yet expensive electricity to “save the planet.”
During the Energy Policy Development Program (EPDP)
lecture last April 20 at the UP School of Economics (UPSE), Ms. Melinda L.
Ocampo, president of the Philippine Electricity Market Corp. (PEMC) talked
about “Electricity Trading and Pricing in the Philippine WESM.” Ms. Ocampo
discussed among others, the new management system where the interval for
electricity dispatch has been improved from one hour to only five minutes.
I pointed during the open forum that the imposition of
the lousy scheme feed-in-tariff (FiT) or more expensive electricity for favored
renewables was unleashed even to consumers in Mindanao, which is not part of
WESM, and is not connected to the Luzon-Visayas grids. The FiT-Allowance that
is reflected in our monthly electricity bill has risen from 4 centavos/kWh in
2015 to 12.40 centavos in 2016 and this year, we should brace for at least 26
centavos/kWh soon because the 23 centavos petition by Transco starting January
2017 has not been acted by the Energy Regulatory Commission yet.
The issue of stable and affordable energy will be tackled
in the forthcoming BusinessWorld Economic Forum this May 19, 2017 at Shangri-La
BGC. Session 4 “Fuelling Future Growth”of the conference will have the
following speakers: John Eric T. Francia, president & CEO of Ayala Corp.
(AC) Energy Holdings, Inc.; Antonio R. Moraza, president & COO of Aboitiz
Power Corporation; Josephine Gotianun Yap, president of Filinvest Development
Corp., and DoE Secretary Alfonso G. Cusi. Yap and Cusi are still to confirm the
invite.
Local energy players will have a big role in ensuring
that the Philippines should have stable and competitively priced energy supply
today and tomorrow.
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See also:
BWorld 120, Five myths of solar-wind energy, April 08, 2017
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