Urgently Needed: An Energy Road Map for Mindanao
Mike Banos
October 24, 2006
I was honored to receive late last week an invitation from NEDA-10 RD Myra Balandra to join a two-day Regional Research Utilization Forum at a local hotel.
The forum is one of the activities marking National Statistics Month and will have the theme “Empowering Consumers Through Responsive Energy Statistics.”
As its name implies, the forum will be a venue for the generators and users of energy research to maximize knowledge sharing amongst themselves so it becomes a catalyst for informed decision making regarding not only the energy sector but the entire Mindanao economy as well.
I’ve been closely following issues on energy especially those which affect Southern Philippines for the past fifteen years and just last month, a forum hosted by the Philippine Economics Society at the Xavier University only served to confirm what is becoming increasingly apparent not only in Mindanao but the entire country as well:
There just aren’t enough resources available in the country’s energy sector to meet its energy needs over the medium and long term. And heaven forbid a major base load power plant goes out of kilter anywhere in the country soon, because this will surely lead to rotating brownouts similar to those which plagued the Ramos administration during the start of its tenure in the early nineties.
Much has been made about STEAG State Power Inc’s (SPI) coal-fired power plant but even if it does go online as expected by the end of this year, its output would be barely enough to bring up the spinning reserve needed by the Mindanao power grid. Now, what if it does not go online and the overstrained power barges or silted hydro power plants bog down?
In that forum, Cepalco Sr. Vice President Dave Tauli said that by 2009, Mindanao’s energy needs would be 9,150 gigawatt hours while dependable power supply (including SPI’s coal-fired power plant) would only be 9,200 GWh, which leaves Mindanao with a generating capacity reserve way below the 13.1% threshold on top of a generating system that’s no longer “N-1” reliable.
As former National Power Corporation President Guido Delgado noted in the same forum, no new plants are forthcoming because energy prices in Mindanao are too low, thus there are no creditworthy off-takers and no long term market, hence no long term funds available in the local market for investments in power generation, which by its nature calls for long-term funds.
On top of that, there are the stranded costs of Napocor and distribution utilities Mindanao power consumers are mandated to pay under the EPIRA.
Former Transco President Alan Ortiz was batting fore the Leyte-Mindanao interconnection project as a transmission solution to the power generation problem in Mindanao but the energy department insisted the country couldn’t afford it and it was too expensive.
The grapevine tells me Alan has been eased out of Transco due to pressure on Malacanyang from a vested interest group which stands to gain much from delays or preferably cancellation of this Leyte-Mindanao interconnection.
Faced with this dilemma, Dave and Guido are both pushing for “distributed generation projects” by distribution utilities, which will encourage local distribution utilities like Cepalco to put up their own generation facilities (e.g. Minergy) which can provide stand by power during peak hours.
Besides this, Guido is now going around talking to the owners of gensets to be part of an island-wide “stand-by power” network that would link them all together and provide a substantial (say, 500MW) power reserve which can tidy us over during those nasty “peak hours” when everyone seems to be using the power grid.
This is made possible with the use of the SCADA (software used to control power generation and distribution) that would synchronize all these gensets through the use of remote terminal units controlled by a “master station.|”
What I asked Dave and Guido then, and what I would like reiterate to today’s forum participants was this question (which as far as I was concerned, I failed to get a satisfactory answer to):
What have we been doing to “shape” or influence the way our economy or industrial/commercial/residential consumer base is now structured to make it more energy efficient and less “power hungry?”
It’s been over a decade since Guido was president of Napocor. I know it’s always great to look at things with the power of hindsight but bear with me awhile and lend an ear to what I humbly recommend.
What if, during this 14-year period, government and the private sector collaborated to see how the future direction of development in the country would look like? They would have come up with policy decisions which could have made our energy user profile more energy efficient by say, advocating “knowledge- or information-based industries” such as information and communication technologies (ICT) which can bring in more “value-added” to the island’s economy and bring in relatively larger revenues for lesser energy consumption.
That’s the basic direction of sustainable development I’ve been advocating for all these years, the tenets of which the late, great economist E.B. Schumacher laid out in his immortal tome “Small is Beautiful” (Economics as if people mattered).
Schumacher was a respected economist who worked with J.M. Keynes and J.K. Galbraith. For 20 years he was the president of the National Coal Board in the United Kingdom, opposed the neo-classical economics by declaring that single-minded concentration on output and technology was dehumanizing, that one's workplace should be dignified and meaningful first, efficient second, and that the nature is priceless.
Schumacher proposed the idea of “smallness within bigness”; in other words, a specific form of decentralization: for a large organization to work it must behave like a related group of small organizations. Schumacher's work coincided with the growth of ecological concerns and with the birth of environmentalism and he became a hero to many in the environmental movement and community movement.
In first chapter of 'Small Is Beautiful', The Problem of Production, Schumacher points out that our economy is unsustainable. The natural resources (especially fossil fuels), are treated as expendable income, when in fact they should be treated as capital, since they are not renewable and thus subject to eventual depletion.
He further points out that similarly, the capacity of nature to resist pollution is limited as well. He concludes that government efforts must be focused on attaining sustainable development, because relatively minor improvements like education for leisure or technology transfer to Third World countries would not solve underlying problems inherent in an unsustainable economy. (from Wikipedia)
Consider for instance how much revenue and employment the Business Process Outsourcing (BPO) industry has generated compared to say, mining or heavy industries for the same amount of investment. Factor in the environmental costs of these “extractive industries” and it becomes obvious how a poor country like us could successfully address our “energy crisis” over the long term, because frankly, I don’t believe there’s a “short-term” panacea to this problem which by its very nature can only be addressed by long-term solutions.
An “Energy Road Map” is what Mindanao, or more specifically, the Philippines, needs at this point in time. It’s never too late to make or modify our regional and local development frameworks based on a holistic long-term sustainable development drawn from the grassroots, starting with micro development plans from the puroks and barangays that’s participatory, and where the least citizen of a particular locality is given voice to put in his ten cents worth regarding the way his neighborhood would look like over the long run.
If the decision-makers in Manila take too long to make up their minds about this thrust, it behooves us as stewards to the human and natural wealth of Mindanao to put our heads together now to draw up this “Energy Road Map” ourselves, instead of leaving our collective future in the hands of people a thousand kilometers away who couldn’t care less about the crassness of our apathy and the consequences of their procrastination.
I N D N J C -
The forum is one of the activities marking National Statistics Month and will have the theme “Empowering Consumers Through Responsive Energy Statistics.”
As its name implies, the forum will be a venue for the generators and users of energy research to maximize knowledge sharing amongst themselves so it becomes a catalyst for informed decision making regarding not only the energy sector but the entire Mindanao economy as well.
I’ve been closely following issues on energy especially those which affect Southern Philippines for the past fifteen years and just last month, a forum hosted by the Philippine Economics Society at the Xavier University only served to confirm what is becoming increasingly apparent not only in Mindanao but the entire country as well:
There just aren’t enough resources available in the country’s energy sector to meet its energy needs over the medium and long term. And heaven forbid a major base load power plant goes out of kilter anywhere in the country soon, because this will surely lead to rotating brownouts similar to those which plagued the Ramos administration during the start of its tenure in the early nineties.
Much has been made about STEAG State Power Inc’s (SPI) coal-fired power plant but even if it does go online as expected by the end of this year, its output would be barely enough to bring up the spinning reserve needed by the Mindanao power grid. Now, what if it does not go online and the overstrained power barges or silted hydro power plants bog down?
In that forum, Cepalco Sr. Vice President Dave Tauli said that by 2009, Mindanao’s energy needs would be 9,150 gigawatt hours while dependable power supply (including SPI’s coal-fired power plant) would only be 9,200 GWh, which leaves Mindanao with a generating capacity reserve way below the 13.1% threshold on top of a generating system that’s no longer “N-1” reliable.
As former National Power Corporation President Guido Delgado noted in the same forum, no new plants are forthcoming because energy prices in Mindanao are too low, thus there are no creditworthy off-takers and no long term market, hence no long term funds available in the local market for investments in power generation, which by its nature calls for long-term funds.
On top of that, there are the stranded costs of Napocor and distribution utilities Mindanao power consumers are mandated to pay under the EPIRA.
Former Transco President Alan Ortiz was batting fore the Leyte-Mindanao interconnection project as a transmission solution to the power generation problem in Mindanao but the energy department insisted the country couldn’t afford it and it was too expensive.
The grapevine tells me Alan has been eased out of Transco due to pressure on Malacanyang from a vested interest group which stands to gain much from delays or preferably cancellation of this Leyte-Mindanao interconnection.
Faced with this dilemma, Dave and Guido are both pushing for “distributed generation projects” by distribution utilities, which will encourage local distribution utilities like Cepalco to put up their own generation facilities (e.g. Minergy) which can provide stand by power during peak hours.
Besides this, Guido is now going around talking to the owners of gensets to be part of an island-wide “stand-by power” network that would link them all together and provide a substantial (say, 500MW) power reserve which can tidy us over during those nasty “peak hours” when everyone seems to be using the power grid.
This is made possible with the use of the SCADA (software used to control power generation and distribution) that would synchronize all these gensets through the use of remote terminal units controlled by a “master station.|”
What I asked Dave and Guido then, and what I would like reiterate to today’s forum participants was this question (which as far as I was concerned, I failed to get a satisfactory answer to):
What have we been doing to “shape” or influence the way our economy or industrial/commercial/residential consumer base is now structured to make it more energy efficient and less “power hungry?”
It’s been over a decade since Guido was president of Napocor. I know it’s always great to look at things with the power of hindsight but bear with me awhile and lend an ear to what I humbly recommend.
What if, during this 14-year period, government and the private sector collaborated to see how the future direction of development in the country would look like? They would have come up with policy decisions which could have made our energy user profile more energy efficient by say, advocating “knowledge- or information-based industries” such as information and communication technologies (ICT) which can bring in more “value-added” to the island’s economy and bring in relatively larger revenues for lesser energy consumption.
That’s the basic direction of sustainable development I’ve been advocating for all these years, the tenets of which the late, great economist E.B. Schumacher laid out in his immortal tome “Small is Beautiful” (Economics as if people mattered).
Schumacher was a respected economist who worked with J.M. Keynes and J.K. Galbraith. For 20 years he was the president of the National Coal Board in the United Kingdom, opposed the neo-classical economics by declaring that single-minded concentration on output and technology was dehumanizing, that one's workplace should be dignified and meaningful first, efficient second, and that the nature is priceless.
Schumacher proposed the idea of “smallness within bigness”; in other words, a specific form of decentralization: for a large organization to work it must behave like a related group of small organizations. Schumacher's work coincided with the growth of ecological concerns and with the birth of environmentalism and he became a hero to many in the environmental movement and community movement.
In first chapter of 'Small Is Beautiful', The Problem of Production, Schumacher points out that our economy is unsustainable. The natural resources (especially fossil fuels), are treated as expendable income, when in fact they should be treated as capital, since they are not renewable and thus subject to eventual depletion.
He further points out that similarly, the capacity of nature to resist pollution is limited as well. He concludes that government efforts must be focused on attaining sustainable development, because relatively minor improvements like education for leisure or technology transfer to Third World countries would not solve underlying problems inherent in an unsustainable economy. (from Wikipedia)
Consider for instance how much revenue and employment the Business Process Outsourcing (BPO) industry has generated compared to say, mining or heavy industries for the same amount of investment. Factor in the environmental costs of these “extractive industries” and it becomes obvious how a poor country like us could successfully address our “energy crisis” over the long term, because frankly, I don’t believe there’s a “short-term” panacea to this problem which by its very nature can only be addressed by long-term solutions.
An “Energy Road Map” is what Mindanao, or more specifically, the Philippines, needs at this point in time. It’s never too late to make or modify our regional and local development frameworks based on a holistic long-term sustainable development drawn from the grassroots, starting with micro development plans from the puroks and barangays that’s participatory, and where the least citizen of a particular locality is given voice to put in his ten cents worth regarding the way his neighborhood would look like over the long run.
If the decision-makers in Manila take too long to make up their minds about this thrust, it behooves us as stewards to the human and natural wealth of Mindanao to put our heads together now to draw up this “Energy Road Map” ourselves, instead of leaving our collective future in the hands of people a thousand kilometers away who couldn’t care less about the crassness of our apathy and the consequences of their procrastination.
I N D N J C -
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