/ 21 August 2021

The Philippine weather bureau officially declared the start of the rainy season early in June, but it is still feeling hot like summer on issues concerning the Philippine power sector.

Looking back, Luzon saw a series of rotational brownouts early last month amid the shortage of power supply due to the unplanned shutdowns of power plants that shaved off as much as 4,000 megawatts of power from the grid. This has prompted the National Grid Corporation of the Philippines, the country’s system operator, to issue red and yellow alerts.

Yellow alerts are hoisted when the power supply falls below the healthy levels, while red alerts are issued when there is no longer enough supply flowing into the grid as against the high energy consumption.

We’ve heard the Department of Energy passing the blame to the NGCP amid its failure to procure reserves or what we call the “ancillary services” which could have been tapped when Luzon was short of power supply, while the NGCP defended itself by saying that the law does not give it the power to purchase reserves.

This has then pushed distribution utilities and electric cooperatives to turn to spot market—the electricity trading—where rates per kilowatt-hour have gone up since the unplanned power plant shutdowns.

Due to the supply shortage, rates offered by the spot market were at that time, high, with the increased rates automatically passed on to consumers as allowed by the Energy Regulatory Commission, the country’s energy watchdog.

As they usually are, distribution utilities such as Meralco bore the brunt of angry consumers. We are barking at the wrong tree.

We were taught in our economic subjects about the law of supply and demand, and the same theory can be applied as well to the current power situation.

While supply has begun stabilizing, the looming maintenance shutdown of the Malampaya gas field in October again poses a threat. It is possible that we could experience a similar scenario as in June, but we as consumers can help prevent the repeat of the situation by continuing the practice of energy efficiency to prevent the further thinning of supply.