* This is my article in BusinessWorld last April 3, 2019.
In a September 2017 paper, “Implementing the 10-point
Socio-Economic Agenda,” the Arangkada Philippines Project (TAPP) made 22
recommendations for the power sector, among which are: (1) Support and approve
the massive energy investments, (2) Increase the system reserve requirement to
25% of peak demand vs the current 17%, and (3) Formulate an energy road map
(generation portfolio mix) with power supply quality, reliability and
affordability as key objectives.
These are good recommendations to expand and ensure more
stable power supply, more competition among more players, more consumer
choices, and cheaper energy prices. Which are the main advocacies of the Market-Oriented
Reforms for Efficiency (MORE) series in this column.
It is not possible to have sustained fast growth if there
is no reliable, stable, 24/7 electricity in major economic centers if not
nationwide. And the Philippines remains among the laggards in East Asia in
terms of total electricity generation and kWh per capita. Then there is the
persistent promotion plus subsidies to variable renewables solar and wind
starting with the RE law of 2008 (RA 9513) but after 9 years, their combined
output remains very small (see table).
The good news is that the Energy Virtual One Stop Shop
(EVOSS) law has been signed as RA 11234 on March 8. This will hasten approval
and permitting system in power construction and development.
In a paper, “When There’s Too Much Sun and Wind” (WSJ,
March 10, 2019), Rupert Darwall (author of “Green Tyranny: Exposing the
Totalitarian Roots of the Climate Industrial Complex”) argued:
“(T)he most destructive consequence of wind and solar
power result(s) from periods of oversupply… Coal and gas plants have to be kept
on standby and ramped up to cover the shortfall resulting from still air and
darkness. That forces them to operate less efficiently and pushes their costs
up. During periods of low demand, wind and solar can produce too much
electricity, creating gluts and driving wholesale prices negative, meaning grid
operators have to pay consumers to burn unwanted energy.”
While the Philippines is still far from having wind +
solar oversupply, strong legislative and executive lobbying point to that
direction.
The interest of electricity consumers — more stable
electricity at cheaper/competitive price, no additional taxes and subsidies
like the feed in tariff (FIT) allowance — should prevail over government, as
well as the RE lobby and environmental NGO interests that oppose fossil fuel
power plants which can provide stable, cheaper power.
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See also:
BWorld 307, MORE airline competition, March 28, 2019
BWorld 308, MORE debt reduction please, March 31, 2019
BWorld 309, MORE local government responsibility, April 05, 2019
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