By Viking Logarta
This article was originally published in Business World
I just got back from Davao.
Here’s the good news. Power outages are not so frequent in Mindanao now.
The bad news?
Mindanao is now awash in power from coal plants. From a 70-30 mix in favor of hydropower versus fossil-fuel plants, that ratio has been reversed this year. That means more air pollution and greenhouse gases.
But wait for good news. The political leaders in Mindanao are not happy about coal, but they felt they had no choice then.
In meetings with the smart and diligent management and staff of the Mindanao Development Authority (MinDA) and its Mindanao Power Monitoring Council, I was impressed about how forward-looking the body politic of the island is.
Romeo Montenegro, deputy head of MinDA, is looking at all options to reverse the trend by 2030, and was candid enough to ask for help. He says 50-50 would be the floor demand.
There are four private distribution utilities and 40 rural electric cooperatives in the island. While Davao and Cotabato may have excess power already, the coops still suffer from regular outages. Why? The private utilities have excess capacity while the coops continue to suffer.
Pete Maniego, former chair of the National Renewable Energy Board (NREB) offers solutions, founded on utilizing available renewable energy resources. Pete is a firm advocate of distributed generation. According to Pete, bringing supply where demand is will save on transmission and distribution losses and costs. Pete said that distributed generation is clearly appropriate for an archipelago such as ours, consisting of more than 7,100 islands with lots of hard to access localities. Another advantage would be the shorter and cheaper restoration of power supply after typhoons and other extreme weather events.
He noted that most off-grid areas served by diesel gensets do not have access to electricity 24/7, since the operating hours of these gensets are being curtailed due to the high fuel cost and limited fuel supply. He proposed converting the power systems in these off-grid areas to hybrid solar-diesel to provide reliable power 24/7 at lower rates.
Based on current prices, he estimated that the cost per kWh of solar power is about 50% or less compared to diesel. Pete considers hybrid system as a low-hanging fruit, which electric cooperatives and the National Power Corporation-Small Power Utilities Group (NPC-SPUG) can immediately implement to provide reliable power to rural communities at affordable cost. Moreover, he remarked that all consumers will benefit from the reduction in universal charge for missionary electrification (UCME) resulting from such renewable energy utilization.
Let’s hope that our dear President and the agencies concerned would give MinDA a fair hearing.
For its part, the Institute for Climate and Sustainable Cities is able and willing to support the efforts of MinDA, to include issues of efficiency, equity, and climate change. We will be piloting some renewable energy models soon.
That’s the good news.
Viking Logarta is an energy economist and currently the Energy Policy Advisor of Institute for Climate and Sustainable Cities. ICSC is one of the Philippines leading organization analyzing national and global climate-energy policies.