* My article in BusinessWorld, December 6, 2021.
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HOUSE RESOLUTION 2361
In the Philippines, House Resolution No. 2361 was introduced on Nov. 16 by Pampanga Rep. Juan Miguel “Mikey” M. Macapagal Arroyo hastening the “Philippines’ transition to 50% renewable energy [RE] sources by 2030.” The existing target under the National Renewable Energy Program (NREP) 2020–2040 is 35% RE in the power generation mix by 2030 and 50% by 2040. So Mr. Arroyo and the kill-coal lobbyists want to hasten the transition by 10 years.
This and related proposals like the Asian Development Bank’s acquire-retire-coal scheme to be replaced by RE, especially intermittent solar and wind, are impractical and based on emotion, not reason. Below are four quantitative reasons why.
HIGH COAL GENERATION, LOW SOLAR + WIND GENERATION
One, coal provided up to 57% of total power generation in the country as of 2020, solar + wind provided only 2.4%. In the first 10 months of 2021 in the Luzon-Visayas grids, coal provided 55% while solar + wind generated only 2.9% share. If we persist in having more intermittent unstable and weather-dependent energy, we will have daily Earth Hours soon.
Two, generation capacities of other indigenous energy are limited. From 2010 to 2020, natural gas generation was flat at 19,500 gigawatt-hours (GWH); geothermal, flat at 10,000 GWH; and hydro, flat at 7,000+ GWH. The main reason the Blackout Economics agenda of the RE lobby did not happen is because coal generation has expanded big time, from 23,300 GWH in 2010 to 58,200 GWH in 2020 (see table 1).
MORE COAL, MORE GROWTH
In the next table below, I computed the decadal averages of energy consumption in Petajoules (1 PJ = 277.78 GWH) and GDP growth of selected countries.
Three, countries that expanded their coal consumption and did not significantly raise their solar + wind share have fast or high GDP growth. Examples are China, India, S. Korea, Indonesia, Taiwan, Vietnam, Malaysia, Thailand, and Philippines. Japan is the exception for some reason/s.
Four, countries that shrank their coal consumption and significantly raised their solar + wind share have slow and anemic GDP growth. Examples are the US, Germany, UK, Italy, Spain, France, and the Netherlands. Exceptions in Europe and have relatively fast growth are Kazakhstan and Turkey, they expanded their coal use instead. Russia and Poland have shrunk their coal use but they did not significantly increase their solar + wind share, they experienced modest growth (see table 2).
Of course, there are other factors that contribute to fast or slow growth of countries but for this paper, we want to see if the desire of the RE lobby will be useful or not for developing countries like the Philippines. The above numbers show that the answer is no. The RE lobby is useless in pushing the Philippines and other developing countries in their desire to have sustained growth and uplift millions of their people from poverty.
TRANSMISSION WOES IN NEGROS AND NGCP MONOPOLY
My Nov. 15 column discussed the high power prices in Negros provinces after the National Grid Corp. of the Philippines (NGCP) Negros-Cebu submarine cable was damaged this June by Department of Public Works and Highways (DPWH) dredging and re-channeling activities in Amlan, Negros Oriental. Transmission was cut by half to only 90 MW and market prices in the alternative transmission Negros-Panay shot up to P7.70/kwh in the July billing; P7.55/kwh in August; down to P3.42/kwh in September, when the submarine cable was fixed.
Both NGCP and DPWH assumed zero liability for the higher cost of electricity for two months in Negros Occidental and Oriental. All congestion costs were passed on to consumers and generation companies (gencos). The DPWH or its contractor should have liability insurance to handle these cases but the NGCP went chummy friendly with DPWH. And the Energy Regulatory Commission (ERC) did not penalize NGCP for not going after DPWH and its contractor. ERC went chummy with NGCP. Shame.
COMPETITION UNDER EPIRA IS WORKING
Updated data show that the Electric Power Industry Reform Act (EPIRA) of 2001 or RA 9136 is working for the consumers via more competition, more choices. The registered electricity players in the Luzon-Visayas grids alone as of Nov. 26, data from IEMOP:
The Wholesale Electricity Spot Market (WESM) now has 281 members: 143 gencos, 71 electric cooperatives (ECs), 47 directly connected customers, and 20 private distribution utilities (DUs) and local government utilities.
The Retail Competition and Open Access (RCOA) program has 1,970 participants: 1,834 contestable customers, 59 retail metering service providers, 37 national retail electricity suppliers (RES), 25 suppliers of last resort (SOLR), 15 local RES.
Medium to large customers can choose whether to stay with their ECs or DUs, or become contestable customers and choose their own RES with customized power supply, services and pricing.
GREEN OPTION IS AVAILABLE
Instead of pushing for mandatory transition to RE by restricting and later killing coal plants, RE advocates and lobbyists can walk the talk by joining the Green Energy Option Program (GEOP) under the Renewable Energy Act of 2008. Consumers enter into supply contracts with RE suppliers (i.e., only RE will be supplied, no fossil fuels) which are registered with the Central Registration Body (CRB). The CRB processes the GEOP switch request by the consumers and RE gencos will supply the needs of the customers.
Registration of RE suppliers started on Dec. 3 and the switch to GEOP will start by Jan. 3, 2022. More GEOP customers and participants, more RE will be supplied, less demand for fossil fuels. People walk their talk, no need for legislated RE mandates and political noise and drama.
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See also:
BWorld 515, Blackout economics, COP26 and Negros’ power prices, November 24, 2021.
BWorld 516, Economic forum and COVID summit, December 14, 2021
BWorld 517, Economic forum and COVID summit (part 2), December 15, 2021.
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