International research on the impact of the COVID-19 pandemic on the power sectors of different countries has it that the demand for electricity has changed across sectors and industries.
According to the findings of the paper “COVID-19: Impact analysis and recommendations for power sector operation” (2020, Appl Energy. 2020 Dec 1; 279: 115739. Published online 2020 Aug 31. doi: 10.1016/j.apenergy.2020.115739), governments all over the world have had to cut down business activities to minimize the threat of COVID-19 and its variants. For most of the last two years, people have stayed at home, doing remote work for their offices apart from the usual household tasks. The significant increase in residential load demand has been noted, as well as the drastic drop in commercial and industrial loads. In the Philippines’ export processing zones and enclaves in the Southern Tagalog region alone, some 700 factories closed shop.
Changes in power consumption patterns and the shift in distribution raised challenges in the technical and financial activities of the power sector. These inevitably affected the national energy demand profile: in underdeveloped countries, power network equipment like substations, distribution transformers, and protection equipment deteriorated due to lack of maintenance.
There have also been fluctuations in energy costs for commercial and industrial companies on the one hand, and households on the other.
While it was documented that the changes in the load patterns led to energy price drops in most European markets such as Belgium, France, the Netherlands, Italy, Spain, and Portugal – prices remained either stable or increased in developing countries like India and the Philippines.
Reduced capacity to pay
The pandemic has also led to the reduction of the capacity of many consumers from the vulnerable sectors to pay their electricity bills. Families used their income for food and health needs. In the last two years, an estimated 4.7 million Filipinos lost their jobs, nearly 8 million took pay cuts and 1.1 million children dropped out of primary and secondary education as classes moved online. This is according to a report in the World Resources Institute (Why the Time Is Right for Renewable Energy in the Philippines, 2021).
In the meantime, the country’s fossil fuel plants suffered power outages and implemented unplanned maintenance work. In the first half of 2021 alone, 17 power-generating companies went offline and breached their plant outage allowances because of the so-called manual load dropping to preserve power grid stability.
Manila Electric Co. (Meralco), the country’s largest power distributor, estimates that around one million residential customers stayed indoors to do remote office work during the quarantine period. Meralco’s franchise areas –Metro Manila, Bulacan, Cavite, and Rizal, as well as certain areas in Batangas, Laguna, Pampanga, and Quezon – were affected by the government-imposed quarantine in Luzon that began mid-March 2020. There were isolated power interruptions lasting for a few minutes to hours as distribution facilities succumbed to extremely hot weather and a surge in demand from families forced to stay indoors.
Electric Bill Shocks and Power Interruptions
Rolling blackouts that usually take place in the hottest months of March and April when hydropower plants underperform because of lowered water supplies continued throughout July. This disrupted the schooling of children and the livelihood activities of their parents.
The WRI also pointed out that the power supply instability may have also affected the COVID-19 vaccination rates in the earlier months of 2020 when the vaccines were first rolled out: vaccines need stable energy to meet temperature-control requirements.
Meralco and other power distributors also faced the challenge of meter readings: because of the strict quarantine protocols, they were resorted to estimating the consumption of customers. Many customers were shocked by their bills as they were charged for their power consumption from March 2020 to May 2020 based on their average consumption from the previous December to February. Actual meter readings were not done because of the ECQ, and the ECQ took place during the summer months when electricity prices normally increase because of higher demand and temperature.
Power Shortages in Summer
In the meantime, power industry experts are already saying that Luzon will likely experience a power supply crunch during the summer months. There is only one new generating plant entering the power grid and several power plants badly need maintenance shutdowns that were delayed because of the pandemic.
Power demand is expected to this year as the economy starts to recover and restrictions are lowered or removed in the NCR and surrounding regions.
In the latest report of London-based think tank, the Economist Intelligence Unit (EIU) titled “Industries in 2022,” global energy consumption is projected to rise by 2.2 percent this year as economies recover from the impact of the pandemic.
The EUI said that all types of energy, apart from nuclear power, would benefit from the projected rise in demand.
In the Philippines, however, the outlook for the power supply is not good as there is only one additional new power plant kicking into action -- GNPower Dinginin Ltd. Co. (GNPD) in Bataan. Its second 668-MW coal-fired power plant is slated to operate this first quarter of the year. Units 1 and 2 have a total generating capacity of 1,336 MW, but these may not be fully operational until May 2023.
The lack of maintenance work on several power plants during the pandemic is also a concern for the power sector. Because of travel restrictions, many plants did were not checked and examined by technical advisors.
Related to this, it was pointed out in the Institute of Climate and Sustainable Cities’ (ICSC) report entitled “Luzon Power Outlook: Determining the Adequacy of Power Supply for April to June 2022” that there could be possible blackouts over the Luzon grid in the second quarter. The ICSC anticipates a deficit of 1,335 megawatts in the electricity supply.
Already, reports have it that Aboitiz Power Corporation’s GN Power Dinginin Units 1 and 2 in Bataan, with a total generating capacity of 1,336 MW, may not be fully operational until May next year.
Impact of the Ukraine War
Then there’s the ongoing Russian war in Ukraine. The continuing conflict there is putting a strain on the global oil supply and prices. In terms of GDP size, Russia is the 11th largest economy in the world. It is a major producer of oil, gas, and oil. Its involvement in any war will definitely have an impact on the global economy. While we do not import supplies from Russia, the Philippines trading partners like China, Korea, and Japan do. Already, pump prices of petroleum products in the Philippines have been affected, and prices have already been rising even before the war started.
The global oil price hike caused by the war resulted in a year-to-date adjustment that brought a total net price increase of P13 per liter for diesel, P9.55 per liter for kerosene, and P8.75 per liter for gasoline. global oil prices are approaching $100 per barrel for the first time since 2014.
Energy Democracy through Decentralization and RE
The fact that countries like the Philippines are almost always easily affected by geopolitical developments in other countries emphasizes the urgent need for energy self-sufficiency. Inefficiencies are always being found in the system of the centralized power grid which must always balance local supply with national demand.
And now, high gas prices mean heavy industries like chemical and steel, as well as manufacturing companies, will also increase their prices and pass on the costs to consumers in the form of product price hikes and service rate increases. The high prices are plunging our economy into a deeper crisis. Soon, food prices and electricity rates will also go up.
The COVID-19 pandemic and the war in Ukraine – as well as the continuing series of natural disasters the Philippines experiences because of its geographic location – exposes how a centralized grid leaves the economy highly vulnerable to international market instability and price volatility. Connected to this is the vulnerability of the economy to power shortages and outages caused by extreme weather events. It has been proven that the centralized power grids can be a single point of failure for communities, sectors, and services that heavily rely on electricity.
What all these points to are the urgent need to democratize and decentralize power generation and enable households, communities, and businesses to become more energy self-sufficient and independent. It is urgent that we re-think our energy systems if we want to help the country move forward when it comes to energy access and supply.
Communities can generate their own reliable, free, and renewable energy through solar PV technology. We no longer have to rely on centralized suppliers for our electricity needs. Self-generation of electricity through RE sources and technologies like solar PV with storage can lead to the establishment of dispersed, resilient grids without a single point of failure. Households, entire communities, and businesses can protect themselves against power outages and fluctuations in energy prices which up to now are vulnerable to global oil prices. The pressure on the national grid will ease and what’s more, efforts to mitigate carbon emissions will gain a big boost.
We can stop the cycle of energy price hikes caused by oil price increases and other emergencies by controlling our own power supplies and seriously pursuing RE projects that will enable our communities to manage their own resources. Collectively, we can also bring down their environmental footprint and free consumers from high electricity prices. #