Nervous energy

AT The Manila Times’ Energy Forum on March 20, the overall message about the Philippines’ energy landscape was fairly upbeat. A great deal has been accomplished in recent years, and development work that is either planned or already underway in various areas — generation, transmission, regulation and the energy market — broadly suggests that the Philippines is moving in the right direction for energy security, though the road ahead is still quite long. At the next big energy forum, the Philippine Electric Power Industry Forum, hosted by the Independent Electricity Market Operator of the Philippines in Iloilo on April 5, I expect to hear more of the same.

However, the gross picture hides a lot of troubling fine details, things that do not necessarily come out in presentations or panel discussions in front of conference audiences when everyone is trying to be positive but do emerge in smaller conversations. The energy environment is a complex web with many moving parts, so a few bumps along the road to energy security should be expected. Some of these problems, however, are huge gaping potholes that could bring progress to a halt.

The first problem is that it is becoming increasingly apparent that the entire energy sector, from the policymakers in the Department of Energy (DoE) to ordinary consumers, fundamentally misunderstands what a grid is and how it’s supposed to work. If there is anywhere else on Earth where generation planning takes place in complete isolation from transmission planning, I’d like someone to point it out to me because, as far as I know, the Philippines is unique in this.

Two ideas brought up in our recent forum are good examples of this apparent disconnect in perception. One was the suggestion that to accommodate better the expansion of renewable energy (RE) (or presumably any other kind of energy), the National Grid Corp. of the Philippines (NGCP) should consider building grid connections into areas designated for new RE plants so that they are available when those plants are built. The other point raised was that the existing grid needs to be enhanced in order to more securely integrate the variable RE sources, which, if the country actually meets its targets, will make up 50 percent of the energy mix by 2040.

The perception seems that the grid is essentially a big extension cord and just has to be long enough for any new-generation source to be plugged into it. This is part of the reason the NGCP is constantly being flogged for “not completing its projects” on time. It is a grid operator, not a construction company, and its chief responsibility is to ensure the efficient and reliable delivery of all the power that is produced to all the customers who need it. Yes, the NGCP does need to expand and connect new generation sources, but pursuing that in the context of grid operation, properly looking at generation plus transmission as one big organism that needs to be kept healthy, doesn’t match expectations based on a misunderstanding that the two can be mutually exclusive.

“Enhancing” or “upgrading” the grid to accommodate variable RE sources is part of the same problem. If energy development is done right, the upgrades wouldn’t be necessary because the generation characteristics of the RE sources would be baked into the corresponding grid design in the first place. Energy development hasn’t been done right, so now the NGCP is stuck with a difficult task akin to building a nervous system separately and installing it in a body hatched by someone else. The results are most likely to be less than what was hoped for, and even less when the mad scientists keep installing new organs and informing the nerve-weavers after the fact.

All of this could probably be avoided if the DoE had a robust resource allocation planning framework, but it does not; certainly not a robust one, and perhaps not any at all. It used to be that in the pre-privatization days, there was a resource planning office bridging the National Power Corp. (generation) and the National Transmission Corp. (transmission). There were other inefficiencies on both sides, of course, which led to the power crisis in the 1990s, but a lack of the correct planning framework was not one of them.

That hasn’t existed for 20 years, however. After the Electric Power Industry Reform Act of 2001 was implemented, resource-allocation planning was transferred over to the DoE, where it evaporated after a couple of years. The story I heard was that the last engineer who knew how to use the planning software migrated overseas in search of greener pastures, so the DoE simply gave up on it.

Everyone wants energy that is reliable, accessible, affordable and sustainable — the four pillars of true energy security — but the inescapable impression at this point is that without a comprehensive rebuilding of energy policy and planning, the country will never get there, or at best, progress will be painfully slow. With the pace of the country’s economic and population growth and our climate changing at the rate it is, slow progress will not be good enough. We will come to grief in one way or another long before the elusive goal of energy security is reached. It is a realization that makes those responsible for energy very nervous, even those gracious enough to accept invitations to highlight positive developments for the benefit of forum audiences. It should make the rest of us nervous, too.