Reducing the High Cost of Philippine Electricity

Reducing the High Cost of Philippine Electricity

After over 100 days, the DOE and the DU30 Administration has still no CONCRETE LONG-TERM PLAN and STRATEGY on HOW TO REDUCE ELECTRICITY COSTS – among the top 3 costliest power in ASIA if we include AUSTRALIA.

Yes you are right, the new SECRETARY of DOE has not yet developed, proposed and vetted to the public and stake holders their concrete short-term and long-term plan and strategy on how to reduce the country’s electricity costs.

All that can be heard are plans to expand RENEWABLE ENERGY technologies such as solar, wind, biomass, mini-hydro – most of which are too small a capacity and expensive compared to the current grid rate of 5-6 PhP/kWh provided mainly by the base load coal thermal, natural gas combined cycle gas turbine, geothermal, large hydro, and peak load oil thermal, diesel gensets and pumped hydro.

If this is the BEST that the DOE can offer the country, then we are doomed forever to HIGH ELECTRICITY COSTS. RENEWABLE ENERGY while very desirable, will never lower our expensive power rates.

RE may reduce our electricity costs on the premise that as a group, its weighted average cost has attained grid parity, and that fossil power generation will continue to escalate due to oil price inflation while the feed-in-tariff (FIT) rate of RE are pegged for 20 years for each new entrant RE technology. At best, RE will provide relative reduction only in electricity costs (because it is not escalating compared to fossil generation) and not provide direct cost reduction when we introduce cheaper power generation technologies (cheaper power plant overnight capital cost $/kW and cheaper fuel cost $/GJ or $/mt or $/liter or $/kg of fuel).

In fact, as we increase RE share in the power generation mix, we are continuously adding an expensive power source, that would be further compounded by the need for backup and peaking reserves to be provided by high ramp-up rate but expensive oil thermal and diesel gensets, natural gas simple cycle gas turbine and pumped hydro, and occasionally privatized large hydro that now operate as peaking plants as a result of the ill-advised privatization of such NAPOCOR assets into the hands of private power investors that naturally raised hydro power generation costs to recover the high cost of acquisition from NAPOCOR-PSALM privatization program.

It has been proposed recently by various groups to look into reviving the mothballed 600-mw BATAAN NUCLEAR POWER PLANT (BNPP), but this would not materialize in the near future as it would require further studies, extensive rehab works and replacements of old components, instrumentation and control, and new safety requirements, aside from establishing the nuclear power regulatory framework.

So what are the viable options left for the DOE and the country?

I have put forward on several occasions that the ONLY WAY TO REDUCE POWER COSTS is to introduce the CHEAPEST POWER GENERATION TECHNOLOGY – which is COAL THERMAL.

Currently coal-fired CIRCULATING FLUIDIZED BED (CFB) and PULVERIZED COAL (PC) thermal power plants are the cheapest source of power for the country that utilizes both locally-mined SEMIRARA COAL and imported INDONESIA COAL. Although already cheap, such locally-mined and imported coal can still be made cheaper by removing the logistical costs such as ocean freight (around 3-7 USD/MT), local barging cost (around 200-300 PHP/MT) and inland trucking cost (300-400 PHP/MT).

Thus, if the DOE and the entire country promotes and adopts what our ASEAN neighbors are doing right now – developing their MINE-MOUTH COAL-FIRED POWER PLANTS, we can definitely reduce the cost of our electricity. With MINE-MOUTH coal operation, the country can domestically produce coal at around 12-14 USD/MT and this will result in electricty produced from MINE-MOUTH COAL-FIRED POWER PLANT (preferably clean coal technologies such as CFB) at around 3.00-3.20 PHP/KWH, very much cheaper than current COASTAL-LOCATED COAL-FIRED POWER PLANTS of 4-50-5.50 PHP/KWH depending on the location and source of its coal fuel.

The COAL PLANNING BUREAU of the DOE has identified many coal reserves throughout the country and given the quantity and heating value of each reserve, so we can easily estimate the MW capacity and COST of electricity for a 25-year MINE-MOUTH coal mine and power plant. The only additional investment would be perhaps a longer TRANSMISSION LINE to connect the REMOTE site of the coal reserve and power plant.

Another short-term solution to high electricity costs is to develop our DISTRIBUTED GENERATION potential using MINI-HYDRO POWER PLANTS that are located nationwide by utilizing our run-of-river sites to divert water to a hydro plant to extract the energy potential from the elevation change along the path of the winding river and bringing it back to the main river path for other purposes, so it is environmentally benign. Again, MINI-HYDRO POWER costs around 3.50-4.00 much less than the grid rate of 5-6 PHP/KWH so it has the potential to contribute further to reducing power costs.

Lastly, the DOE can promote also the use of LOW-HEAT GEOTHERMAL FLUIDS using the KALINA THERMODYNAMIC CYCLE to extract the low-heat from geothermal fluids using a REFRIGERANT in a closed loop so there is little emission of geothermal fluids and gases and pollutants into the atmosphere and rivers, as the spent geothermal fluid is re-injected back into the geothermal basin.

The problem of climate change, global warming and environmental concerns has been addressed by the newer coal, geothermal and mini-hydro power generation technologies.

SO THERE YOUR ARE DOE, LADIES AND GENTLEMEN.

ONLY BY INTRODUCING CHEAPER AND LOCALLY AVAILABLE POWER GENERATION TECHNOLOGIES CAN WE EVER HOPE TO REDUCE OUR EXPENSIVE ELECTRICITY.

PLEASE START CRANKING THE NUMBERS AND COME UP WITH YOUR OWN SHORT-TERM AND LONG-TERM PLAN TO REDUCE POWER COSTS.

AND THEN ENSURE THAT THESE PLANS ARE FOLLOWED BY THE PRIVATE POWER GENERATION INVESTORS – BOTH LOCAL AND FOREIGN.

Leave a Reply

Your email address will not be published. Required fields are marked *