As news of higher power rates this summer puts a spotlight on the country’s long-standing energy woes, a think tank cautioned the government against applying what it describes as merely “band-aid solutions.”
A paper by the Stratbase ADR Institute on Strategic and International Studies said while the interruptible load program could potentially avert the much-feared rotating brownouts in Luzon, the bigger picture required a more long-term energy security plan.
“Augmenting the supply is the only long-term and viable solution to these persistent woes, a direction that requires both enabling policy and political will,” the paper said. “While Congress and the executive scramble to find band-aid solutions to avoid this looming power crisis, it does little to even begin solving the country’s power woes beyond 2015.”
“The government needs to be serious in implementing a more strategic solution to this problem, which has plagued the economy for more than a decade now,” Stratbase founder-managing director Victor Andres Manhit said. “No economy in the world has achieved true and lasting development without a secure and competitive energy sector.”
The price of energy in the country, one of the highest in the region, has been cited as a barrier to attracting more foreign investments, seen as key to job creation and, in turn, inclusive growth and poverty reduction.
According to the paper, entitled “Beyond Band-Aid Solutions and Emergency Powers: The Need for a Long-Term Energy Security Plan,” one path to energy security is by attracting more investments in the power sector, which will only take place if such investments make economic sense.
As it is, the lack of power players currently defeats the objectives of the Wholesale Electricity Spot Market, the paper said.
“Increasing the supply of dependable power and therefore the competition in the generation side of the industry will also lower prices in the long term. The best way to do this is to attract more investments into generation.”
Manhit added the state of the country’s power plants and the frequent shutdowns reflected the urgent need to revisit the technology used in the plants and, if possible, facilitate the construction of plants that utilize updated technologies that are more reliable and environment friendly.