One of the important recent developments in the Philippines power sector was the renewed plan by Meralco PowerGen. Corp. (MGen) to proceed with the Atimonan coal power project in Quezon province.
Here are some reports in BusinessWorld that show the evolution in the plans of the Atimonan project through the years: “Atimonan folk to critics of power plant project: Don’t block progress” (July 21, 2017), “Cusi defends CEPNS given to Atimonan coal power plant” (Oct. 4, 2018), “Meralco willing to undergo competitive selection process to allow Atimonan construction to start” (May 29, 2019), “Groups want MGen coal plant project’s ECC declared expired” (Oct. 19, 2020), “From coal to gas, MGen readies Atimonan plant’s conversion” (Aug. 2, 2023), “Meralco seeks to proceed with Atimonan power project” (Sept. 10, 2024).
This move towards coal by MGen is good and brilliant. Coal power is among the important work horses of the industrialized countries in the west and the new economic dragons in East Asia that helped in their fast economic growth and improved well-being of their people.
Developed countries like Australia, the US, the UK, Germany, Australia, Canada, and Japan have higher coal power generation per capita than three decades ago. The Philippines’ coal generation per capita remains small until today (see the table).
THE ENERGY TRANSITION
The constant pressure — if not bullying — by various groups who say that the Philippines should retire its coal plants early and shut them down is based on the fanatical belief that decarbonization and degrowth is good for our people. This is wrong.
The endless push for “energy transition” is misplaced. Coal, gas, and nuclear remain the most reliable, safe, and competitively priced energy sources that developing countries like the Philippines need.
At the Asia Power Forum in Singapore on Sept. 12, Aboitiz Power Corp. Chief Corporate Services Officer Carlos Aboitiz made a good presentation entitled “The energy transition: A perspective from Emerging Asia.”
According to the press statement they issued, Mr. Aboitiz said that “Energy is produced only if it is consumed… At the end of the energy value chain are individuals and the institutions that produce the hallmarks of modern society… Often, we hear pronouncements that renewables are cheaper than their fossil fuel counterparts… Unfortunately, the math doesn’t add up. Today’s math is based on incomplete accounting, using the levelized cost of electricity or LCOE as opposed to accounting for the intermittency and lack of resource[s] in solar and wind during different times of the day and year.”
He is correct. The LCOE is computed only when an energy source like solar or wind is running. When it is not running like when the sun is not shining and the wind is not blowing, a backup source (usually a gas or oil plant) must run and its cost must be included in the computation and the total cost per kWh in a day goes up.
THE TEMPEST AT THE ERC
Another important development in the energy sector was the order handed down on Sept. 5 by the Ombudsman to suspend Energy Regulatory Commission (ERC) Chairperson Monalisa Dimalanta for six months.
Among the recent reports in BusinessWorld about this development were: “Business groups urge quick resolution after suspension of ERC’s Dimalanta” (Sept. 9), “ERC chair exploring options after six-month suspension” (Sept. 9), “Dimalanta case resolution seen as critical to making progress on power projects” (Sept. 15).
Among the big business and professional organizations in the Philippines that issued statements of concern about the Ombudsman’s ruling were: the Philippine Chamber of Commerce and Industry, the Philippine Exporters Confederation, and the Employers Confederation of the Philippines. These groups issued a joint statement saying, “This decision along with other recent decisions by the Judiciary puts at risk the trust, independence and authority of the ERC… We advocate for a swift and transparent resolution of the suspension to restore the integrity of the ERC and its Commission.”
Said the Management Association of the Philippines: “The country needs a fully functional ERC, led by a competent and dedicated Chair like Chair Dimalanta who has demonstrated not only integrity and dedication, but also innovativeness and courage to make bold and prompt decisions.”
Said the Makati Business Club: “We believe that the six-month suspension order issued by the Ombudsman not only affects investor perception but also affects the certainty of the Philippine business environment given the critical role of power in business and investments.”
Said the Philippine Independent Power Producers Association, Inc.: “We generators hope that this matter will be resolved soonest since the suspension of our ERC chairperson affects the whole industry… The industry cannot afford a commission without its chair. We hope that all stakeholders unite in its support to the ERC chair.”
Said the Retail Electricity Suppliers Association of the Philippines: “The retail electricity suppliers are already facing complex issues on energy security, it is even more crucial that the Commission remains stable and effective to ensure continuous access to sustainable and reliable power solutions.”
The petitioner, the National Association of Electricity Consumers for Reforms, Inc. (NASECORE), gravely misrepresented what constitutes consumer interest.
NASECORE does not represent me as an electricity consumer myself. My concern as a consumer is having more choices. Whether I should consume 1,000 kilowatt-hours (kWh) or 600 kWh or 250 kWh per month depending on my needs and household budget, I want an electricity supply that is available when I need it, with no blackouts. I do not want my choices to be limited to using either candles or a diesel genset because of blackouts and an insufficient power supply.
Political drama in the energy sector is not among my concerns, so as I see it, NASECORE and its leadership are just pursuing their own personal and political agendas.
The Ombudsman should have had the wisdom to not be easily swayed by the arguments of this so-called consumer organization. But it failed to use that wisdom.
Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.