In this section, you’ll read what other people have to say as reactions to our blog posts. Their insights on the power and energy crisis issue are also important to be within the reach of the public.
Some of the statements herewith are received either from our email addresses, social media, and from other channels.
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On Meralco’s Generation Rate Reduction Welcome But Temporary (submitted on MSK website, December 26)
You were too easy in just letting the high WESM prices of P 43.05/kwh for September and P 35.60/kwh for October slip by without closer scrutiny. Except for the P 36.08/kwh for the January WESM, these are the highest WESM charges this year (despite the lower primary price cap of P 32/kwh and the secondary price cap of P 6.245/kwh set by the ERC). These are price shocks that begs examination notwithstanding the impact may have been mitigated by the lesser WESM quantity bought by Meralco during those months.
Our research reveal that that these price spikes did not come from WESM trading (pure spot prices) but from MRU charges, as well as line rentals. MRU stands for Must Run Unit which in WESM operations refers to a power plant dispatched to operate by the System Operator (the “SO” or the NGCP) even after the Market Operator (the PEMC) has already established the Merit Order Table of the plants that will meet the demand at the least cost. MRUs are plants which are “out-of-the-merit-order-table” or sometimes referred to as “out-of-schedule” dispatch (the schedule being the order of the plants determined in accordance with an objective market algorithm, the Market Dispatch Optimization Model, which results in an price-ordered stack of plant capacity offers that provide the least cost to meet the demand).
Further research on the reasons why the SO/NGCP dispatched MRUs reveal that much of it are for system voltage requirements and inadequate reserve levels for which the plants dispatched for MRU were compensated by way of WESM charges. Still further research reveals that in these instances of MRU dispatch by the SO/NGCP, the plants which were made to run are the oil based plants (Malaya, Bauang, Limay, Subic) whose operating costs are quite expensive. There should not be any surprise here the corresponding MRU charges should be high. (The other instances of MRU dispatch pertain to commissioning tests by new plants which should hardly result in incremental WESM charges.).
Voltage quality and availability of reserves are the responsibility of the SO/NGCP for which they are paid their fees. However, in the above instances where MRUs are used, NGCP is solving a transmission problem with a generator solution and effectively is getting a free ride (at the expense of generators) from performing its responsibility in voltage quality and availability of reserves at a cost borne by end-users who pay the WESM charges. The SO/NGCP should solve the voltage quality problems by using its assets for which they are paid transmission charges (automatic on-load tap changers of its substations, shunt reactors and capacitors) and should address the paucity of reserves by purchasing enough of it. But when NGCP is made to get away with NOT doing its responsibilities simply because existing WESM rules allow it the expedience of simply dispatching MRUs whose cost NGCP does not have to bear, then the interests of end-users are grievously harmed when they in turn are made to pay MRU charges which in the first place are avoidable.
The average load weighted WESM price, excluding MRUs and line rentals, is about P 4.50/kwh. That MRU should increase this by multiples is simply not acceptable, especially when costs are cavalierly incurred simply because an entity has the power to dispatch MRUs and such power is not subject to review or accountability.
– Kris Balitbukel
On Stars not aligned for amending Epira (published Nov. 22 in PDI)
“That the electricity in the Philippines is the second most expensive in Asia and one of the most expensive in the world, not discounting the fact that new businesses have to wait for 40 days to have their power connected, testify to the ineptness and inefficacy of EPIRA. We need to have true competition in the generation of power. That presupposes that ERC should become the oversight committee it was meant to be and for it to stop being the lowly stamp pad of the aforementioned companies.”
“Again the EPIRA LAW was created to diminish the government ability to influence the energy sector and advantage those in the private sector. Energy policies should be governed on the basis of providing reliable, affordable and available energy across the board with strong government regulatory function. Absent of this, the private sector cannot do the job. Since the ERIRA Law was enacted the government monitoring and oversight function to look into security of energy has largely remain useless and those task in government absent.”
“Panot na itong ulo ko sa kakakamot. Hindi ko talaga maintindihan sa gobyerno natin, sa dinami-dami ng bright boys lagi na lang luge (poordiospoorsanto) ang gobyerno tuwing merung ginagawang contrata. Saan ba ang interest nila, sa gobyerno o sa private sector? Itong tanong ko kahit si Lord ay baka hindi kayang sagutin.”
“There is no need to amend the EPIRA law. It is a disaster for the filipino consumers and should be discarded.”
On “Locational strategy for PH power development” (published Nov. 12 in PDI)
“Nuclear power has one advantage that would make it difficult to dislodge from South Korea’s energy mix: it is the cheapest source of electricity in the country.
Nuclear power’s cost advantage is even clearer when compared with
renewable forms of energy such as wind, solar, and tidal power.
According to one researcher at the Korea Energy Economics Institute, the wholesale cost of power from alternative sources in South Korea is six times higher than that of nuclear power.
Kaya asenso ang South Korea.”
“long transmission lines are one disadvantage of the wind projects in northern luzon which are far away from the industrial and population centers of metro manila. One advantage of coal is you can place it almost anywhere. The problem with coal is pollution and greenhouse gas emissions
we should follow the example of france. It took them around 2 decades only to fully transform their electrical grid. Since the 1990’s france’s electrical grid has been around only 10-20% fossil fuel. It took them less than 20 years to build around 60 large baseload power plants to do that. they chose a power plant type that is greenhouse gas free and that can be built almost anywhere, avoiding the problem of power transmission inefficiency. Now the French people are reaping the benefits. France has low residential electricity rates even taking into account taxes and levies”
“You talk sense (technocrat sense), Mr. David Tan. I hope those counterparts in the government have the same ability as you have.”
“Mindanao is ahead with this strategy by 3 years, that’s why the island region is confident of supply surplus starting next year way up to 2025. The rest of country should follow suit.”
On Power development is a 3-legged tower (published Aug. 11 in PDI)
“The government should focus more on renewable energy in solving the energy crisis.”
– Christian Raquel
“If we want true competition, the whole Philippines should be in one grid. That is, Luzon, Visayas and Mindanao shall be interconnected. So generated power from any region can be sold to the other regions.”
“One of the 6 unwritten Atkinson’s Principles, which was the basis of Newsman Joseph E. Atkinson crusade for Social and Governance Reforms 100 years ago is the following
The Necessary Role of Government: When Atkinson believed the public need was not met by the private sector and market forces alone, he argued strongly for government intervention. – ..Perhaps that is the one reason why our Electricity is publicly owned the same as our mass transit, water and most basic services and they are very affordable and efficient…”
“Well, maybe we should strike a balance and compromise. Since know that we need these terrible bunker fed power plants for the present, let us allow them to make a reasonable profit to be able to run them, so about 15 pesos max. Then do the opposite as well and use the FIT rates as your MINIMUM WESM price. That would be very good for consumers and fair to producers. In fact this may encourage a lot of Solar farms to be built and fill in the gap at peak rates but have an assurance of a minimum to secure ROI. In the US last year, ALL the expansion commissiones was Solar and half as much in China. That should be telling us something. Seems the present Regulations favor the continued use of coal and bunker, and the ERC has to become more creative and responsive to both Renewable Energy and the poor Consumers who are just price takers with no choices. Look how they are preventing net metering! Need we say more?”
– Jose Maria T. Zabaleta