* My article in BusinessWorld, June 3, 2020.
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The adverse impact of prolonged community quarantine (CQ)
in Metro Manila and the rest of Luzon since mid-March is shown by the huge
decline in electricity consumption. From the Independent Electricity Market
Operator Philippines (IEMOP) data for Luzon-Visayas grids, I compared the
April-May 2020 data to the same months in 2019 and the result is really bad.
The decline in average electricity demand was as follows:
-2,101 MW (-20.3%) in April 2020, and -1,713 MW (-15.6%) in May 2020. Assuming
a -5% decline for June 2020, the second quarter 2020 average would be -13.6%
and this can translate to potential GDP contraction of about -10% or higher
this quarter. The number of job losses and business bankruptcies should be very
high this quarter.
Meanwhile, the country’s biggest energy company, Meralco,
has been attacked recently based on half-truths with three or more agenda:
refund consumers due to “overcharging,” push for free electricity up to 200
kwh, and kill coal and mandate more wind-solar energy. The sporadic attacks as
reported in other newspapers came from the Power for People Coalition
(P4P)/Gerry Arances, Bayan Muna leaders Neri Colmenares and Congressman Carlos
Zarate, and Tony la Vina.
Let us check the facts to see if these claims and agenda
hold water or thin air.
First, Meralco “overcharging” in May 2020 billings due to
averaging of December-February electricity consumption for the March-April
billings, “least favorable to customers because December usage is usually
higher than normal” so the average is inflated.
This is not so. December-February are the coldest months
of the year and hence, electricity consumption is lowest then. From IEMOP data
on the Luzon-Visayas grids in 2019, the average power demand for January,
February and December was 9,098 MW, while average power demand for March to
November was 10,333 MW, higher by 1,235 MW.
Meralco’s mistake is not overcharging but that they used
the consumption in the coldest months as the reference period for March-April
billings, which created a moral hazard problem — consumers consumed more
electricity since they would just pay the low kWh average for the cold months.
Then the ECQ was extended to May, and the moral hazard problem was extended by
another month, and when the actual meter reading was made, mid-May minus
mid-February, the actual electricity consumption in kwh was big, and this
created the surprise and conspiracy theory of “over-charging.”
Second, that Meralco should “waive the electricity bills
of customers consuming an average of 200 kwh or less… and the first 200 kwh of
households who consume 200 to 500 kwh.” To cover generation, transmission,
distribution and other charges.
This is socialistic and parasitic thinking. Power plants
do not get free fuel, free labor, free interest payment for their loans, etc.
The same for the grid/system operator, the distribution utilities (DUs), and
electric cooperatives (ECs). It is very unlikely that Bayan Muna would demand
this kind of irrational electricity freebies from all other DUs and ECs in the
country, they just target the biggest and richest DU for media mileage and
other political interests.
Third, Meralco has a “preference for dirty energy from
coal and fossil fuels” when “coal power causes sickness and makes people sick”
so the solution is more renewables like biomass, solar and wind (BSW) plus a
silent endorsement for natural gas.
Again, this is not so. Among the richest and most
developed economies in the world with healthier people who have a high life
expectancy are the major coal consumers — the US, Germany, Japan, Taiwan,
Australia, South. Korea, Malaysia, etc. Coal consumption in million tons oil
equivalent (mtoe) is divided by population to derive the kilos of oil
equivalent (koe) per capita (see the table).
The Philippines’ coal consumption of only 153 koe per
person in 2018 is the smallest, the lowest among developed and emerging East
Asian countries and yet certain lobbyists of renewables want to further
restrict coal power development in the country. DUs like Meralco and ECs should
get more coal power contracts, not less.
Fourth, variable renewables like BSW are cheap and
abundant enough to replace coal power. Far out. In 2019, the BSW plants reached
1.7 gigawatts (GW) or 6.7% of total installed capacity of 25.5 GW. But BSW’s
actual electricity generation was only 3.3 terawatt hours (TWH) or 3.1% of
total power generation of 106 TWH. In contrast, coal power constituted 41% of
total capacity but produced 55% of total electricity consumption in the
country.
All the attacks and claims are plucked from thin air and
emotionalism, and are not based on hard data and reason.
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