Democratizing power generation

EPIRA created an oligopoly of power generators by making power generation an exclusively private sector endeavor.

Unfortunately, the private sector has failed to put up enough power plants to keep up with our economy’s growing demand. And there is nothing the government and the consumers can do.

The WESM or the barely functioning power supply market cannot perform the way a free market should because the available supply of electricity barely meets demand. Same with the reserve market with limited supply. Both markets keep power rates high.

What if we can democratize power generation and still stay within the current restrictions of EPIRA?

Big Boy Sy thinks he has a solution he is willing to fund. Through NGCP, he is launching Project Airbag to make that happen.

NGCP defines Project Airbag as its transmission-side initiative to deploy battery energy storage systems to provide fast-response storage and greater operating flexibility across the grid.

Why Airbag? I presume it is because this proposal provides an emergency response to our power crisis, from El Niño to the red and yellow alerts. It is the fastest means to protect the power consumers and help dissipate the lingering supply crisis.

I have proposed this strategy of allowing NGCP to put up battery storage some months ago in this column but I was told DOE has issued a memo that classified batteries as generation facilities. With that definition, NGCP is barred by EPIRA from doing that. That’s ridiculous because batteries do not generate. They store already generated electricity.

Apparently, our desperate situation has made DOE reconsider by creating a new classification: energy storage. This now allows NGCP to invest in BESS (Battery Energy Storage System).

Project Airbag is designed to maximize the utility of NGCP’s transmission system. Big Boy said the transmission grid is underutilized in many places while there is congestion in others. He wants to use BESS to relieve the congestion and improve utilization of the grid overall.

Big Boy also wants to encourage investment in solar with BESS, and provided these installations are located close to the existing power grid, Big Boy said NGCP can take all the power that can be produced. He also thinks power rates can go down and the power grid can be more secure from geopolitical tantrums.

Project Airbag will not replace the big base load generators with BESS units. That isn’t contemplated and it is unlikely to happen. Batteries do not generate power.

BESS will store all the power produced by pioneer stand-alone solar installations during the daytime for use in the peak hours after sunset. Many of these solar installations can’t always be accommodated due to grid congestion in some parts of the country during the daytime hours.

NGCP has 4,478 MW unreserved/ unallocated capacity and 2,942 MW that are currently unused but committed for power plants and Green Energy Auction (GEA) winners nationwide. That’s a lot of excess or idle capacity Big Boy wants to utilize and help alleviate current problems.

The reality we face is simple: it takes five years or more to put up new big power plants. In the meantime, we need more juice. Only solar with BESS installations that can be put up in less than a year can help. These are modular units and easily assembled. China has overproduced everything from solar panels to batteries so that costs are also down.

For the desperate situation in the Visayas, batteries like what Citicore is deploying in Silay, can provide the only quick help. Repairing those coal plants in Cebu and Panay is taking too much time and building new ones will take even longer. Power barges burning diesel fuel cost too much.

NGCP’s Project Airbag will build its BESS capacity over time to match the solar ambitions of DOE. That means as much as 10,000 MW of BESS capacity nationwide.

Those onerous take-or-pay ancillary contracts that DOE is requiring NGCP to sign can become totally unnecessary as NGCP deploys its BESS units. That can also save the harassed power consumer a lot of money.

But DOE is still not allowing NGCP to use what their batteries can provide as ancillary service until NGCP has exhausted their ancillary bilateral contracts and the reserve market. Why the propensity to protect the power generators even if it means higher consumer rates?

NGCP barely consumes the volume their take-or-pay contracts provide for ancillary. This is legalized highway robbery victimizing electricity consumers. We, the consumers, pay more for those ancillary contracts than what NGCP is charging for providing transmission services.

Both DOE and ERC should protect the consumers from onerous take-or-pay contracts from the generators. Hopefully, they will come to that conclusion soon enough as power rates are increasing way too much for ordinary households to afford and will soon be a political powder keg issue.

I like Big Boy’s idea. It theoretically democratizes power generation. The objective, he said, is not to monopolize participation in the energy sector, but to disperse the burden of addressing the country’s supply requirements by enabling more participants and more sources to contribute.

The great thing about Big Boy’s idea is that it provides Energy Secretary Sharon Garin an immediately doable response not just for the Visayas power problem but for the country as well. I totally sympathize with Secretary Garin. It is truly a bad time to be energy secretary. The problems neglected by her predecessors are exploding in her watch.

I don’t think she should resign as some people are demanding. I think she should stay and implement the things that should have been done three or four energy secretaries ago. With less than two years left, a new energy secretary can’t do much anyway.

DOE must show it is acting quickly and will not be paralyzed by EPIRA’s restrictions. This is how to reassure people and prevent panic.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco