It’s available baseload, stupid!

The Secretary of Energy and the Chairman of the Energy Regulatory Commission are doing on-the-spot inspections of power plants in reaction to recent yellow and red alerts in the Luzon and Visayas grids. Congress is also conducting a hearing to ask questions on the same things.

While being on the road inspecting power plants is laudable, one still gets the feeling that it is all for show. The energy officials should know by now what ails our energy system.

They know it is all about our very thin reserves. An extremely hot summer day can bring the system down from increased demand. And they have done nothing worthwhile to address the problem.

Spot electricity prices surged to a three-year high in May, Maybank IBG noted, due to tighter supply conditions, plant outages and grid instability during high peak demand periods. Recent regulatory hearings also highlighted concerns over long-term energy planning and the need for additional baseload capacity.

“It’s inadequate baseload, stupid!” That’s what it really is. They can blame NGCP as they normally do. But in all honesty, NGCP can only transmit power that is available.

Sure, it was a tripping of NGCP lines that cut off the 1,200-MW Ilijan plant causing yellow and red alerts. But incidents like this happen now and then. There were red and yellow alerts after NGCP fixed the lines within 12 hours.

Those transmission lines are extremely long, hanging over isolated areas, easily sabotaged by bad elements. I remember being in a helicopter with the late energy minister Ronnie Velasco flying over a long portion of those lines trying to get a feel of how vulnerable those lines are to rebel elements.

If NGCP can prove they have properly maintained those lines, even the recent tripping shouldn’t have caused yellow and red alerts if we had enough power plants feeding the grid’s demand.

Data from 2016 to 2025 shows that 96.7 percent or 235 of 243 red alerts were caused by generation supply issues. Simply, we need more dependable baseload supply. Otherwise, these alerts become part of what it is to be Filipino.

The Luzon grid had 13,508 MW of available capacity against a peak demand of 13,881 MW when the yellow and red alerts were issued. That’s a shortfall of 373 MW.

That shouldn’t have been a problem except that 4,106 MW we thought we had on paper were not available. There were 16 plants on forced outage while 14 more were operating on derated capacity. Many of our baseload plants are old. Some of those have been off grid since way back in 2019.

It is the same problem in the Visayas grid. When adding the major recent failures – such as Therma Visayas Inc. (TVI) Units 1 and 2 and Panay Energy (PEDC 3) – the total unavailable power in the Visayas climbs to 841.3 MW to 1,006.2 MW depending on the day’s active derated plants. Some plants have been out since 2021.

The DOE always proudly says that they have added 4,046 MW of installed capacity: solar with 3,544 MW and wind with 502 MW. If we take those numbers at face value, we should be out of the dark.

But the capacity factor for solar is only 16 percent and wind is only 33 percent. This means one MW of renewable energy is not the same as one MW of coal, geothermal and hydro that we use for baseload.

That 3,544 MW of solar is only worth about 567 MW to the grid because of its low-capacity factor. And when the sun goes down and we all flick on the switches to watch television or cook our food, we cause a spike in demand. Solar is useless in the evening peak unless it is backed up by batteries, even then only for two to four hours.

Solar/wind with battery back-up is technically still not baseload able to provide juice 24/7 for months nonstop. Even the world’s largest batteries generally store enough energy to discharge at full capacity for only two to four hours. DOE and ERC are fooling themselves, and us, for claiming solar/wind with batteries is “renewable baseload.”

Our energy officials have, through the years, simply failed to ensure sufficiency of non-intermittent/ baseload supply.

Maybe the problem is EPIRA. Then, they should say so and urge Congress to amend it in a way that will work better for us. After 24 years experimenting with EPIRA, we should by now know what works and what doesn’t.

EPIRA was supposed to lower power rates by promoting free-market competition through the Wholesale Electricity Spot Market (WESM). However, after 24 years, we still struggle with the highest power rates in Southeast Asia.

EPIRA gave us an oligopoly in generation supply. WESM cannot function as a true free market because a market requires a surplus of supply and price-elastic demand to force competitive pricing.

When structural supply scarcity meets an oligopoly of a few major generation players, WESM shifts from a competitive market to a scarcity-pricing clearing house. Then, DOE comes running with price caps as a band-aid to protect consumers from immediate price shocks. But that also destroys the market signal needed to attract new investment.

There seems to be lukewarm interest in new real baseload power plant investments. The permitting process takes too long and banks are not inclined to finance anything other than renewable energy.

The government is helpless because only the private sector can put up power plants. Maybe the framers of EPIRA assumed too much about the private sector’s enthusiasm to invest in power plants. Maybe EPIRA or the way we implement EPIRA failed to provide the incentives for such investments.

Until we figure out what to do next, we should be resigned to more yellow and red alerts.

It’s easy to blame NGCP. But the transmission lines are not our problem yet. The lack of baseload generating capacity is.

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