People power crisis

The euphoric atmosphere at the Quirino Grandstand yesterday noon and at the Quezon Memorial Circle last night was almost a repeat of 1986 when the new president’s mother was swept into power by the original People Power. But when the celebration and the euphoria starts to die down – the hard work for P-Noy begins, starting with the looming power crisis that could paralyze the country sometime very soon. Energy officials had periodically warned that extended power interruptions could continue for the next three years due to the increasing demand for energy. Ironically, this was the same problem faced by the young president’s mother, Cory Aquino, with blackouts during her term lasted for more than 12 hours everyday for almost two years, literally plunging the country into darkness well into the early ‘90s.

When Fidel Ramos became president in 1992, he immediately embarked on a fast-track energy program which resulted in the subsequent policies set by the Wholesale Electricity Spot Market that made electricity costs in the Philippines one of the highest in Asia. Compounding our energy woes today is the P82 billion in stranded debts incurred by the National Power Corp., which the state-run Power Sector Assets and Liabilities Management Corp. wants to resolve by proposing a new round of power rate hikes by as much as 87 centavos per kilowatt hour in the entire country.

Naturally, this proposal to increase power rates does not sit well with consumers who are already reeling from the exorbitant rates they are currently paying. Worse, the P82-billion debt does not even include the P471 billion in stranded debts and P22 billion in costs that PSALM has also proposed to recover over the next 25 years. As things stand, the Philippines will need additional generating capacities to cover the continuing demand for electricity in the coming years as the population continues to increase and as more and more people troop to urban areas especially in Metro Manila. Obviously, the quest for economic growth and progress also requires the ability to meet the power requirements for production especially for manufacturing and other energy-intensive industries.

Our friend, former Energy Secretary Nonong Ibazeta, told us a few weeks ago that renewable energy projects could help address the impending power supply shortage since they have the potential to contribute an additional capacity of 400 MW. Being a tropical country, the Philippines has a vast potential of renewable energy sources such as solar, wind, hydro, geothermal and even biomass – all of them clean energy sources – which can help lessen our dependence on expensive fossil fuel. According to sources from the DOE, renewable energy has the capacity to provide as much as 40 percent of the Philippines’ primary energy requirements, and could provide a long-term solution to the power supply deficiency in the country. Admittedly, government needs increased investments from the private sector. Last February, the Energy department signed 26 new renewable energy contracts that include hydropower, geothermal, wind and biomass ventures, bringing the number to 180 projects (totaling close to $4 billion) since the passage of Renewable Energy Act in December 2008. 

Although hydroelectric power plants already exist in many parts of the country including Mindanao, the prolonged drought due to El Niño exacerbated the power shortage, aside from the fact that the frequent interruptions were caused by maintenance problems that come with having old power plants. One viable alternative is wind power – a sustainable and clean source of energy that, according to experts, is starting to compete with fossil-based power, according to information from Germany and Spain, two of Europe’s main producers of wind energy.

One of the more successful alternative wind energy projects in the country is in Bangui, Ilocos Norte which was initiated by then Ilocos Norte governor and now Senator Bongbong Marcos. The 33-MW wind farm (which has also become a tourist attraction and is the biggest in Southeast Asia) is proof that the Philippines can become a leader in terms of wind power generation, and has sparked interest in the development of a 40-MW wind farm in Aparri, Cagayan with investments expected to reach as much as $120 million from the same group that developed Bangui. The Lopez Group’s renewable energy sector has also drawn up plans to put up wind farms in Camiguin, Dinagat and Surigao in Mindanao, Ilocos Norte and in Taytay, Rizal.

However, clear policy directions are needed to attract more investors, among them the feed-in tariff for wind projects to level the playing field considering that fossil fuel-based power generators have an unfair advantage since rates for their operations do not factor in climate change and pollution. A group of investors supporting the development of wind power say government should provide reasonable rates and revenue support for renewable and environment-friendly technologies. To date, the Energy Regulatory Commission has yet to release tariff scheme rules covering renewable energy.

Perhaps the new administration can set a clear and consolidated policy regarding renewable energy that can encourage investors while protecting the interest of consumers by making sure that the brunt of the costs will not be passed on to the public – something that could possibly start the collaboration of two major players on the opposite ends of the first People Power – Senator Ferdinand Marcos Jr. and President Benigno Aquino III. Now that is perhaps what we can all describe as really putting aside political and past differences and working together for the betterment of the lives of the majority of Filipinos. The looming energy shortage is one major problem where the new president will need all the help he can get. Perhaps it’s time Filipinos see an Aquino and a Marcos working together to avoid what could well be a major “people power crisis.”

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