Coal plants named 'primary culprits' for power supply shortage — report

MANILA, Philippines (Updated 2:47 p.m.) — Energy consumer advocacy group Power4People (P4P) coalition condemned coal plants run by different firms in the country, named by a study as the “primary culprits” for the continuous predicaments of the country’s power grids.

A study by the think-tank Center for Energy, Ecology, and Development (CEED) identified the plants owned by firms San Miguel Corp., Aboitiz Power Corp., First Gen Corp. and DMCI Holdings Inc., which are powered by coal and gas as "the biggest contributors to the shortage of electricity" that also brought the country’s power grids to yellow and red alerts.

“Five out of every ten incidents of forced outages come from coal plants, who also serve as the linchpin of our country’s grid as designed by the Department of Energy (DOE). The DOE is supposed to provide reliable and affordable energy for all Filipinos, but instead chose and continues to insist on using these fossil fuels despite their proven unreliability and high prices,” P4P convenor Gerry Arrances was quoted as saying in a press release. 

The group, which cited the think-tank’s study, said that 51.23% of forced outages came from coal plants while 19.87% came from gas plants in the past five years. 

The study also mentioned that the firms' plants that went on a forced outage may potentially profit from the circumstance as they allegedly injected power supply to the Wholesale Electricity Spot Market (WESM) during the said period.

The WESM is one of the driving factors that may cause the power rates of energy concessionaires like Meralco to increase or decrease their rates. 

Since April, the power grids of Luzon, Visayas and Mindanao have been placed either on yellow and red alerts due to the deficit in power supply.

The group also called for the resignation of Energy Secretary Raphael Lotilla after being allegedly unable to solve the country’s power crisis. 

In a press conference on Monday, the group urged the Energy chief to resign from his post, saying that he has not resolved the continuing electricity problem of the country. 

“Mahigit limang taon na natin nararanasan itong rotating brownouts, forced outages, yellow and red alerts,” Arrances said in a press conference.

(We have been experiencing these rotating brownouts, forced outages, yellow and red alerts for over five years now.)

“Pangalawang taon na ‘to ni Secretary Lotilla, kung siya, hindi niya kayang solusyonan…ibigay na niya sa ibang makakapag-solusyon…kapag ‘di mo kaya…okay lang ‘yon, step down,” he added.

(This is Secretary Lotilla's second year, he cannot solve it... he should give it to someone who can solve it... if you can't... that's okay, step down.)

Arrances also said that they are doubting the “sincerity” of Lotilla due to his previous connection to the Aboitiz group.

“Alam ng lahat…galing siyang Aboitiz bago siya dumating bilang DOE chief,” Arrances said. 

(Everyone knows... he came from Aboitiz before he arrived as DOE chief).

Lotilla was the firm’s lead independent director before being appointed by President Ferdinand Marcos Jr. in the Energy department, Aboitiz has confirmed to Philstar.com.

Semirara Mining and Power Corp., whose subsidiaries are the two power plants mentioned in the CEED study, refuted the claims that it "benefited from the forced outages and the supply deficit in the country."

According to them, forced outrages resulted in substantial financial setbacks to their operations.

"Contrary to these allegations, from 2019 to 2021, forced outages translated to significant financial losses for our operations, with opportunity costs and additional expenditures for replacement power totaling P17.7 billion," Semirara Investor Relations said in an email to Philstar.com.

The firm also said that it had invested P14.8 billion from 2019 to 2023 to improve the performance of their facilities.

"As a result, the overall availability of our power plants has significantly improved, from 62% in 2019 to a record high of 92% in the first quarter of 2024," it said."This dramatic turnaround serves as a testament to our strong commitment to operational excellence and Philippine energy security," it added. — Ian Laqui