Power outages still possible during, after May 9 elections: ICSC

Rotating brownouts are still likely to happen during and after the national elections on May 9, 2022, according to the Institute for Climate and Sustainable Cities (ICSC), as forced shutdowns of baseload coal power plants continue to occur less than two weeks before the country chooses its next leaders.

“Last January, the Department of Energy (DOE) highlighted that the key to averting the looming blackouts during and after the election period is to strictly follow the approved Grid Operating and Maintenance Program (GOMP). Just this month, the DOE called on generation companies and the National Grid Corporation of the Philippines (NGCP) to ensure that the country has enough power supply by holding off maintenance activities one week before and after May 9. However, the latest data shows that the GOMP is not being followed as multiple coal plants still experience unplanned shutdowns,” said ICSC chief data scientist Jephraim Manansala.

Coal plants are not allowed to have planned and scheduled outages from March 26 until June 2022, according to the approved GOMP 2022-2024. However, 12 out of 23 coal plants in Luzon have experienced shutdowns after March 25, and two were still down as of yesterday.

In the initial findings of the “Luzon Power Outlook: Determining the Adequacy of Power Supply for April-June 2022” report which ICSC launched last February, the climate and energy policy group warned that a deficit of 1,335 megawatts (MW) in the country’s power supply can materialize in the second quarter of 2022, leading to a red alert status, possible rotating blackouts, and an increase in power rates in the Luzon grid.

Based on latest developments in the status of coal power plants, ICSC is standing by its projections despite the DOE and NGCP stating that the country has enough power supply this coming election.

The Energy Regulatory Commission (ERC) issued a resolution in November 2020 showing the maximum allowed planned and unplanned outages for coal-fired power plants in a year. Pulverized coal power plants are allowed a total of 44.7 days of shutdowns (27.9 planned, 16.8 unplanned), while circulating fluidized bed (CFB) coal plants, which use newer technologies, are only allowed 32.3 days of shutdowns (15.4 planned, 16.9 unplanned).

In the first four months of 2022, four coal plants have already exceeded the annual limit set by ERC, namely:

–Semirara Mining and Power Corporation’s Calaca Unit 2 in Batangas, a pulverized coal plant, which already had 118 days of outages, and still remains down as of April 27;

–South Luzon Thermal Energy Corporation’s (SLTEC) Unit 2 in Batangas, a CFB coal plant, which has been unavailable for 86 days in the same period;

–Southwest Luzon Power Generation Corporation’s (SLPGC) Unit 2 in Batangas, a CFB coal plant, which has been on shutdown for 59 days in the same period; and

-SLTEC Unit 1 in Batangas, a CFB coal plant, which has been unavailable for 33 days in the same period.

Aboitiz Power Corporation’s GN Power Dinginin Unit 1 in Bataan, the biggest and newest coal-fired power plant to be added in the Luzon grid, has also experienced multiple forced outages that contributed to two instances of yellow alert status raised earlier this year.

“If these coal plants continue to experience unplanned shutdowns in the following weeks, the possibility of blackouts during the elections will be much greater as we predicted last February,” Manansala added.

Findings from the Luzon Power Outlook report were also supported by the Independent Electricity Market Operator of the Philippines (IEMOP), whose data showed that the Luzon grid has thinning power reserves leading up to the election period. The Management Association of the Philippines (MAP) also expressed their concern and called on the government and private stakeholders to work together on long-term solutions to address gaps in the country’s power supply.

Alberto Dalusung III, energy transition advisor of ICSC, pointed out that blended generation costs, which account for around half of the electric bills of Filipinos, have been on an upward trend in recent months particularly for coal.

“The volatility of coal prices is one of the probable reasons for the increase in the blended generation costs and because of the automatic fuel pass-through clause in power purchase agreements (PPAs), or pasa load, these costs are passed on to the consumers. As we continue to rely on the more expensive generation of power from coal, it will always result in higher electric bills for consumers if we do not abolish pasa load immediately,” he added.

Citing data from the three biggest distribution utilities in the Philippines – Meralco, VECO, and Davao Light – which is available in their websites, Dalusung said that blended generation costs increased by almost two pesos per kilowatt-hour (kWh) between January 2021 and April 2022. In fact, Meralco recently warned an increase of more than 50 centavos per kWh in the electric bills of their customers this month as generation charges rose to 5.8724 pesos per kWh from 5.4737 pesos per kWh in March.

“With just 10 days before the national elections, ICSC called on the national government, businesses, and families to do their share in preventing power supply shortages and brownouts in May. At the household level, ICSC said Filipinos can contribute by reducing their use of electric appliances during peak demand hours, or from 10 AM to 4 PM.”

ERC called for emergency public hearings on the power supply agreements between Meralco and South Premiere Power Corporation on May 6 and 13 in an effort to ensure enough power supply and regulate generation costs, especially during the elections. The Senate Committee on Electoral Reforms also expressed the need for an urgent fallback mechanism in case of possible blackouts on May 9.

“We have to look at the power situation beyond the elections and come up with solutions to modernize the grid in the long run. Meralco has already taken a major step with their recent announcement to invest and roll out smart meters in the next four years, which can help provide consumers with information to help manage their consumption. The next step towards an energy system that is affordable, reliable, and secure for all Filipinos is to immediately remove pasa load from electric bills and reduce our reliance on imported fossil fuels,” said Atty. Pedro Maniego Jr., senior policy advisor of ICSC.