Coal power and the Meralco CSP
My Cup Of Liberty
Good thing that our Department of Energy (DoE) is not falling for these groups’ agenda. See these recent reports in BusinessWorld: “Coal-fired plants can support PHL baseload needs until 2030 — DoE” (June 19), “Philippines’ dependency on coal-fired power surpasses China, Indonesia” (July 1), and, “Consumer group files petitions vs Meralco’s supply contracts” (July 3).
We go straight to the numbers.
I checked the coal consumption and “coal dependency” of major industrial economies and some ASEAN countries. In 2023, the Philippines had 70 terawatt-hours (TWh) of coal power generation while Germany had 128 TWh, Japan had 304 TWh, the US had 738 TWh, India had 1,471 TWh, and China had 5,754 TWh. Ember had not called out or bullied these countries — or South Korea and Australia — for their high coal use until last year.
Meanwhile, the Philippines’ coal/total generation ratio in 2023, was 58%, Indonesia’s was 62%, Poland’s was 60%, China’s was 61%, and India’s was 75%. But Ember has not called out Poland, China, and India — they cannot bully these countries, but they can bully Indonesia and the Philippines. The reason why Philippines has a ratio of 58% is because the denominator, our total power generation, is small.
Then I checked the economic performance of these countries, there is a trend: countries with a declining coal/total generation ratio of 30% or lower in 2023 had low average growth — Germany, the UK, the US, Canada, Japan, and Thailand. And those countries with coal/total generation ratios of 42% or higher have fast average GDP growth of 3% or higher — Turkey, Poland, China, India, Indonesia, Malaysia, the Philippines, Taiwan, and Vietnam. Australia is an exception with average growth of only 2.4% (see Table 1).
Next, P4P petitioned the Energy Regulatory Commission to reject Meralco’s two successful competitive selection processes (CSP) that will give Meralco consumers cheaper electricity. They think that the P7/kWh generation charge is wrong and must be rejected because P8.45/kWh or higher is good and must be entertained and passed on to the consumers? What an idiotic way of thinking. (see Table 2.)
Meralco Vice-President and Head of Corporate Communications Joe R. Zaldarriaga correctly argued that “The CSPs involve an open and competitive process with the ultimate goal to secure the lowest bid from qualified generation companies, with no preferential treatment. Thus, the allegations that contracts emanating from CSPs are anti-competitive have no basis.”
P4P and allied organizations are confused, and I consider them to be fake consumer groups. Here are two reasons why.
One, it was a price competitive selection process, not an environmental or ecological selection process.
Two, average electricity consumers like me have two basic needs or demands — that there be enough electricity to avoid blackouts and that this be had at a competitive price. We want to save our gadgets and appliances from damage due to power fluctuations, save the food in our refrigerators, save our eyes from darkness, save our bodies from the inconvenience of not having an electric fan or aircon, save our house and office from potential fires due to the prolonged use of candles, and save our jobs via cheaper electricity running 24/7.
The idea that we have to save the planet is far out because planet Earth has been around for some 4.6 billion years and it had undergone endless natural warming-cooling cycles, El Niño-La Niña cycles, wet-dry season cycles, winter-spring-summer-fall cycles, water evaporation-condensation cycles, and so on.
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