Electric power to the people

It’s good to go full EV, but we need government support, too

CONSIDER THIS: On one hand, the spike in fuel prices has triggered increased demand for electrified vehicles. On the other, rising temperatures have led to shortage in electric power. These two diametrically opposed occurrences are leaving many Filipinos in a quandary and businesses facing another disruption in an already challenging time.

Last May 13, power supply shortage left 2.1 million consumers without electricity for at least three hours. A report by the Philippine News Agency (PNA) quoted Secretary Sharon Garin of the Department of Energy as saying that,“two major kV transmission arteries feeding power into Metro Manila and the broader Luzon grid were suddenly cut off.” This reportedly resulted in the disconnection of 2,462.1 megawatts of natural gas-fired capacity from the Luzon grid, triggering supply disruptions across a wide swath of the region.

A day later, the Luzon and Visayas grids received red and yellow alerts, indicating shortages in power supply to meet demand for the former, and insufficient power reserves to meet the operating margin for the latter. The National Grid Corporation of the Philippines (NGCP) was reported to have issued a red alert signaling possible power cuts of up to seven hours in 32 Visayas areas and hour-long outages in nine Luzon areas, including Metro Manila. The strain persisted for yet another day due to forced outages of several power plants and rising demand as a result of soaring summer temperatures.

Over the weekend, the situation was stabilized. The NGCP said Luzon’s available capacity increased after several power plants declared full capacity operations. The added capacity — coupled with typically lower electricity demand during weekends — created a surplus that allowed power exports from the Luzon grid to the Visayas grid, helping stabilize supply in the region.

I recall that when I joined the ranks of the gainfully employed in the early 1980s, brownouts were rampant. Astoundingly, then as now, this was due to global oil shocks and inadequate power-generating capacity. In the early 1990s, the culmination of neglected long-term infrastructure and rising demand eventually led to the much more catastrophic rolling blackouts that lasted almost 10 hours daily. The Bataan Nuclear Power Plant, intended to be a major solution to the country’s energy needs, was completed but never activated due to safety and corruption concerns.

Fast-forward four decades and, unfortunately, it seems that we have not gotten ahead of our power-generation troubles. The shortage in power supply — not to mention the high price of electricity — has been a perennial bane on the economy and society. The Electric Power Industry Reform Act (EPIRA) of 2001 allowed power supply to catch up with, and temporarily exceed, demand in the 2000s and 2010s. This policy also triggered a massive wave of private investments — primarily in baseload coal and natural gas plants — that fully privatized the sector and brought in Independent Power Producers (IPPs).

Today, total annual generation arguably matches total yearly consumption, but dependable reserve capacity is often stretched to its limits. While supply increases linearly, demand spikes exponentially during the summer months due to cooling needs. According to a Statista report, up to 2024, these spikes in electricity usage often outran dependable grid capacity, resulting in recurring yellow and red alerts in the Luzon and Visayas grids.

Given the sustained economic expansion of the economy, it is critical that the country increases its power-generating capacity. If we are to realize our more aggressive GDP growth targets of 7% to 8%, surely massive investments in baseload capacity generation are needed. This is not to mention the significantly higher levels of energy needed to run and sustain the essential expansion in computing power. Then, of course, there is also the need to set up more cost-efficient transmission corridors to reign-in the price of electricity.

The recent bout of power failures has thrown an added burden on businesses, especially manufacturers. Local automotive production is one such sector. The paint booth heating process in auto factories run on LPG and we all know that its supply is one of the most critically affected by the conflict in the Middle East. Paint and resin parts are also affected. Petrochemicals and derivatives from crude oil and natural gas (such as naphtha, propylene, and aromatics) account for 50% or more of the raw material inputs used to manufacture paints and synthetic resins. Additionally, the supply of aluminum auto components has been adversely affected because operations of major Gulf smelters are disrupted, and blocked key trade routes have interrupted the importation of vital raw materials and the export of finished products.

On top of all that, power failures have come to roost. The unannounced and unplanned interruptions are the most intrusive and damaging. Factories function best in controlled operating environments. Sudden loss of power can result to production defects and significant wastage — particularly in the paint process. Scheduled brownouts are slightly better in that they allow the production team to devise countermeasures, but this still results in unnecessary downtime. Alternatively, companies need to resort to investing in backup power supplies like generators or solar power (and storage). This is an added cost that, in turn, increases production costs. Actually, not only factories are affected; even auto dealer service shops experience disruptions to their repair works, especially for body and paint.

So, while the demand for electrified mobility rises in response to fuel price increases, it belies the more fundamental problem of assuring the appropriate supply of electricity. This becomes an added concern for xEV users. Imagine waking up the next day and finding that your car did not fully recharge because of a power interruption during the night. Indeed, the shift to electrification involves a much broader blueprint that supports the full operability of xEVs. We cannot put the carriage before the horse, so to speak.