Power crisis looms despite CNP backbone completion

By Francis Allan L. Angelo

Six months after the catastrophic New Year’s Blackout in January 2024, Iloilo continues to grapple with an unstable power supply, raising concerns about future blackouts and the region’s capacity for sustained economic growth.

The Institute of Contemporary Economics’ (ICE) latest report underscores the urgency of addressing the systemic issues that led to multiple blackouts over the past year.

Despite congressional hearings and the implementation of new infrastructure, experts worry about the recurrence of such blackouts.

“The rainy season may give a false sense of security, but the risk of total blackouts remains,” the ICE report said. “We are still waiting for comprehensive results from congressional hearings, and without accountability, we risk repeating these mistakes.”

The ICE report noted that the lack of public committee reports from congressional hearings leaves the community uncertain about the steps taken to prevent future blackouts.

“The point of any investigation is always to learn more about what happened to ensure that it does not happen again,” it added.

High Demand, Insufficient Supply

The importance of reliable power in Iloilo City and province is underscored by its rapid economic growth. Inversely, this rapid economic growth and high investment interest are under threat due to power supply uncertainties

Panay Island experienced an 18.5% compound annual growth rate in power demand from 2020 to 2023, the highest in the Visayas Grid network.

Yet, despite the completion of the Cebu-Negros-Panay (CNP) Interconnection Project Line 2, the island remains vulnerable to power shortages.

“The CNP backbone reduces the probability of a blackout from 50% to 10-20%,” the report noted. “However, this is still not the ‘once in a lifetime’ reliability we need.”

A significant bottleneck exists at the Barotac Viejo substation, where the current transmission infrastructure cannot fully utilize the CNP line’s capacity.

Since the transmission line emanating from Barotac Nuevo is only 138 KV, the amount of power that is eventually transferred over to Panay is significantly less than what it otherwise would be.

The solution is for NGCP to upgrade the Barotac Viejo substation to have greater capacity to receive and transmit the maximum power supply that can pass through the CNP line from Negros to Panay.

“The 230KV line to Barotac Viejo needs upgrading to maximize power transmission to the 138KV lines serving Panay,” the ICE report quoted local industry experts as saying.

The CNP is managed by the National Grid Corporation of the Philippines (NGCP), operator of the country’s transmission system that connects power plants to power distributors.

The CNP backbone was established to supplement Panay’s on-island generation capacity. This is particularly important for two reasons:

(1) so our electricity distribution utilities can (theoretically) access low-cost power supply from hydropower and other renewable energy power generators in Leyte and Negros; and

(2) to access power during periods when on-island power generators are not able to operate due to maintenance or unscheduled interruptions.

Current Capacity and Future Risks

Department of Energy data shows that peak demand on Panay was 481 megawatts (MW) in 2023, with an installed generating capacity of 821 MW, of which 714 MW is dependable, just enough to meet current demand.

However, large plants going offline and the intermittent nature of renewable energy sources create a precarious balance between supply and demand.

However, with large plants going offline for maintenance or unexpected outages, the margin for error is slim.

Additionally, about 100 MW of capacity comes from intermittent renewable energy sources like solar farms, which are inherently unstable during extreme weather shifts.

Projections indicate that Panay could face an untenable demand-supply situation within 2-3 years without significant new capacity.

“We have nine committed projects with a total generating capacity of 410 MW expected between 2024 and 2026, but realistically, only 30-50% of this capacity will come online by the end of 2026,” the ICE report highlighted.

The bottom line is that our current on-island supply of power is just enough cushion for

current demand. There is not enough to sustain future economic growth, the ICE report added.

Urgent Actions Needed

The power situation in Panay may have marginally improved, if only with the energization of CNP.

But there remains the need to reach some conclusions as to the January 2024 and

April 2023 blackouts. The need for answers and preventive measures is critical.

“Beyond the finger-pointing, we need to know what the root cause of the event was, the manner in which it cascaded and the measures to be and more importantly, that have been taken to prevent its re-occurrence,” the ICE report added.

The report also emphasized the need for immediate steps to improve the existing infrastructure and explore new energy sources.

Iloilo’s economic growth will not be sustained at its current pace should additional investments in improving capacities in the existing distribution infrastructure and building new on-island power generation facilities.

“Renewable energy sources with its inherent intermittence limitation cannot, alone, be relied upon as a reliable source of generation capacity. Even now, options for a nuclear energy and/or natural gas plant power generating facility must be explored and pursued. These are our only remaining baseload capacity generation source prospects given the ban on other new fossil-fuel plants,” the ICE report said.

In the short-term, steps must be taken to encourage the grid operator to upgrade its Barotac Viejo substation to maximize the impact of the CNP infrastructure.

“Encouraging the grid operator to upgrade the Barotac Viejo substation is crucial,” the report urged.