Energy Columns in BusinessWorld

Philippines ratings upgrade, energy policies to sustain growth May 24, 2023 | 4:18 pm My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/05/24/524678/philippines-ratings-upgrade-energy-policies-to-sustain-growth/ .... ENERGY ISSUES The National Grid Corp. of the Philippines (NGCP) has recently been on the hot seat in the eyes of the public, government regulators, and legislature. See these recent reports in  BusinessWorld : “NGCP warns RE intermittency could pose grid integration issues” (May 14), “Gov’t may retake control of NGCP” (May 14), “NGCP confident of hurdling proposed audit of operations” (May 18), “DoE expects NGCP audit to start this year” (May 21), “Senate probe sought on delays in NGCP projects” (May 21). The trigger was the series of yellow and red alerts and rotating blackouts in the Luzon-Visayas grids, the latest being on May 8. The NGCP’s PR guys tried to spin the event as due to failing power plants when the reality was its t...

The NGCP wall: Transmission problem blamed as generation problem May 10, 2023 | 5:06 pm My Cup Of Liberty By Bienvenido S. Oplas, Jr. https://www.bworldonline.com/opinion/2023/05/10/522028/the-ngcp-wall-transmission-problem-blamed-as-generation-problem/ Consider these three instances of good news and bad news in the Philippine economy. Last Monday morning, May 8, the good news came when employment data for March 2023 was released by the Philippine Statistics Authority (PSA): the labor force participation rate remained high at 66% vs. 65.4% in March 2022, 63.3% in 2021 full year; unemployment and underemployment rates remained low at 4.7% and 11.2% respectively, vs. 5.8% and 15.8% in March 2022, and 7.8% and 15.9% in 2021. See this report in  BusinessWorld , “Underemployment rate at 18-year low” (May 9). These numbers are good news for investors, they will come, stay and possibly expand here because people have jobs, have money to buy. Then, on the afternoon of that day, the bad new...

*  BusinessWorld  May 3, 2023. -------------- The persistent lobby for energy transition from fossil fuels (oil, gas, coal) to renewables (wind, solar, etc.) and moving to “net zero” carbon dioxide emissions is anchored on the assumptions (among others) that fossil fuels are non-renewable and will soon be depleted, and that this will cause large-scale global economic turmoil if the alternative renewables are not ready in high volumes. Are these assumptions correct and realistic? If yes, fine. If no, then all the economic and energy policies leading to net zero are also wrong and distortionary. To help answer this question, I put together this table and limited the annual data for proven oil and natural gas reserves to 1980, 2000, and 2020. Reserves/Production (R/P) measures how many years the reserves will last if current production by a country (both for domestic use and exports) is constant. So, an oil R/P ratio in 2020 of 27 for Brunei means it will take 27 years before its...

*  BusinessWorld  April 26, 2023. ---------------- Last week, the Development Budget Coordination Committee (DBCC) held a press conference on the revised macroeconomic and fiscal targets from 2023-2028. The DBCC — or the economic team — is composed of the Secretaries of the Departments of Finance and Budget and Management (DoF and DBM), the National Economic and Development Authority (NEDA), and the Governor of the Bangko Sentral ng Pilipinas. It is good that the economic team is keeping the original growth targets at 6-7% for 2023, and 6.5-8% for 2024-2028. As argued in this column last Monday, the Philippines’ quarterly GDP growth momentum in 2022 plus employment data as of February 2023 show that the domestic economy is dynamic, and local businesses can sustain a virtuous cycle of production-consumption at higher and rising levels. I also think that the macroeconomic assumptions to make the growth projections are realistic. For instance, the Dubai crude price of $70-$90/bar...

*  BusinessWorld  April 17, 2023. ------------ At the onset, I want to recognize Alfredo J. Non, a former Energy Regulatory Commission (ERC) Commissioner who made some clarifications in his “Letter to the Editor” last April 13, in response to my column “Low power supply and Meralco distribution cost” last April 3. Thank you for your letter, Sir. Mr. Non insisted on over-billing by Meralco from 2012 to present of around P100+ billion, of which P48 billion has been refunded to customers over the last two years. The refund is good but I am not sure if Mr. Non should get the credit for this because from what I know, the proposal to conduct a true-up of distribution charges came from Meralco itself. Below is a disaggregation of the total charges from August 2011 to July 2018. I chose this period because this is the time that Mr. Non was ERC Commissioner and he had oversight function for Universal Charge in Missionary Electrification (UC-ME) and Feed-in Tariff Allowance (FIT-All). U...

*  BusinessWorld  April 3, 2023. ------------- The big power blackouts in the Philippines started in 1990, when total power generation was 26.3 terawatt-hours (TWH; 1 TWH is equal to 1 million megawatts per hour or MWH). It was severe in 1991, with generation down to 25.6 TWH, and in 1992 with 25.9 TWH, resulting in blackouts lasting many hours every day for two years. Things flat lined in 1993 with 26.6 TWH. Fast forward to 2023 or 33 years later, when the threat of blackouts continues. Last week, on March 28, the National Grid Corp. of the Philippines (NGCP) warned of power interruptions these hot months. Here are more troubling numbers about power generation in our country. In 1990, while the Philippines was generating 26.3 TWH of power, Vietnam had only 8.7, Malaysia had 23, and Indonesia had 33 TWH. By 2021, or after three decades, the Philippines is generating 108 TWH of power while Malaysia creates 177 TWH, Vietnam 245 TWH (or 2.3 times that of the Philippines), and Ind...

*  BusinessWorld  March 22, 2023.  ----------- The Philippine Electric Power Industry Forum (PEPIF 2023) held this week on March 20 and 21 at the Diamond Hotel — sponsored by the Independent Electricity Market Operator of the Philippines (IEMOP) — was a great success. All the invited speakers came on stage, a few delivered virtual messages, there was a big audience and corporate sponsorships. BusinessWorld , as media partner of PEPIF 2023, came out with a number of stories. See these four reports by Ashley Erika Jose: “Green energy auction 2nd round due in June” (March 20), “Meralco moves to partly replace lost 670 MW,” “DoE has authority to accelerate charging station rollout — senator” (March 21), and “PSALM says qualified bidders for Casecnan now down to seven” (March 22). I attended the two-day conference and among the topics that frequently came up or were mentioned by many speakers was “energy transition” from fossil fuels to renewable energy (RE). It was mentioned ...