The quest for more stable and cheaper electricity in the ASEAN

* This is my article in BusinessWorld last April 28, 2017.


High economic growth means high energy demand coming from stable supply and competitively priced energy, not unstable, intermittent, and expensive energy. This is what the Association of Southeast Asian Nations (ASEAN) economies need as their high GDP growth of 4.7% in 2016 is projected to improve to 4.8% this year and 5% in 2018 (ADB data), much faster than the projected growth of other regions and economic blocs.

One week before the ASEAN 50th Summit Meeting, the 7th Annual Meeting of the Nuclear Energy Cooperation Sub-Sector Network (NEC-SSN) hosted by the Department of Energy (DoE) was held. A pre-feasibility study showed that many ASEAN countries are in favor of using nuclear energy for commercial use. The ASEAN Center for Energy (ACE) also sees nuclear energy as a long-term power source for the member-countries.

The intensive infrastructure projects of the Duterte administration require huge amount of energy. The proposed 25-km. subway in Metro Manila by the Japan government alone would require high energy supply for the dozens of trains running simultaneously below the ground plus dozens of train stations below and above ground.

Lots of base-load power plants, those that can run 24-7 all year round except when they are on scheduled shut down for maintenance, will be needed. These baseload plants include coal, natural gas, geothermal, and nuclear. Hydro plants too but only during the rainy season.

How reliable and how costly are the different power generation plants that the Philippines and other ASEAN countries will need? This table will help provide the answer as I have not seen data for the ASEAN yet.


Power reliability is represented by plant capacity factor or actual power output relative to its installed capacity. So unstable, intermittent sources like wind and solar have low capacity factor, not good for manufacturing plants, hotels, hospitals, malls, shops, and houses that require steady electricity supply.

Power cost is represented by the levelized cost of electricity (LCOE), composed of capital expenditures (capex), fixed and regular operation and maintenance (O&M), variable O&M, and transmission investment. CCS means carbon capture and sequestration.

The cost of ancillary services for intermittent sources, the standby power plants if the wind does not blow or if it rains make solar plants temporarily inutile, does not seem to be reflected in the transmission cost though.

ASEAN countries like the Philippines will need those power plants that have (a) high reliability, high capacity factor, (b) low LCOE, and (c) low or zero need for ancillary services.

However, more ASEAN countries are entertaining more solar PV and wind onshore since they were convinced to believe that they need unstable yet expensive electricity to “save the planet.”

During the Energy Policy Development Program (EPDP) lecture last April 20 at the UP School of Economics (UPSE), Ms. Melinda L. Ocampo, president of the Philippine Electricity Market Corp. (PEMC) talked about “Electricity Trading and Pricing in the Philippine WESM.” Ms. Ocampo discussed among others, the new management system where the interval for electricity dispatch has been improved from one hour to only five minutes.

I pointed during the open forum that the imposition of the lousy scheme feed-in-tariff (FiT) or more expensive electricity for favored renewables was unleashed even to consumers in Mindanao, which is not part of WESM, and is not connected to the Luzon-Visayas grids. The FiT-Allowance that is reflected in our monthly electricity bill has risen from 4 centavos/kWh in 2015 to 12.40 centavos in 2016 and this year, we should brace for at least 26 centavos/kWh soon because the 23 centavos petition by Transco starting January 2017 has not been acted by the Energy Regulatory Commission yet.

The issue of stable and affordable energy will be tackled in the forthcoming BusinessWorld Economic Forum this May 19, 2017 at Shangri-La BGC. Session 4 “Fuelling Future Growth”of the conference will have the following speakers: John Eric T. Francia, president & CEO of Ayala Corp. (AC) Energy Holdings, Inc.; Antonio R. Moraza, president & COO of Aboitiz Power Corporation; Josephine Gotianun Yap, president of Filinvest Development Corp., and DoE Secretary Alfonso G. Cusi. Yap and Cusi are still to confirm the invite.

Local energy players will have a big role in ensuring that the Philippines should have stable and competitively priced energy supply today and tomorrow.


Coal imports in East Asia

I saw these interesting charts from Index Mundi. Data until 2013 only but useful nonetheless. Source is US EIA. The medium-users in East Asia — MY, TH and PH.


The medium users, TW and HK. VN is a small user but there was a huge uptick in importation starting 2005.


And the big coal users in East Asia — China, Japan and S.Korea.


So claims like “East Asia coal use has declined” are not true.
And even “South Asia coal use has declined” is also not true.

in coal
bd coal

Asia needs cheap and stable electricity supply. To grow faster, more sustainably, and uplift hundreds of millions of people from poverty.

Asia retains big coal use

There are many reports now saying that “Asia moving away from coal” or “Asia embracing more renewables, ditching coal” and similar stories. These claims are half-truths and hence, generally not correct. See these reports and stats below.
Why Is Asia Returning to Coal?
The fossil fuel is undergoing an unexpected renaissance in the region.
By Grace Guo
February 17, 2017

“For Japan, coal has emerged as the best alternative to replacing its 54 nuclear reactors, which are deeply unpopular with the population and seen as symbols of devastation after the Fukushima Daiichi nuclear disaster six years ago…

But why did Abe go with coal and not renewables or, say, natural gas? After Fukushima, Japan initially ramped up its imports of liquefied natural gas, but realized that LNG would be prohibitively expensive in the long-term…. Coal power already made up 31 percent of Japan’s energy mix in 2015 but under the current plan, the fossil fuel will become the country’s primary power source by 2019.”
U.S. Coal Miners Find A New Buyer In Asia 
By Dave Forest – Mar 23, 2017, 10:41 AM CDT

An Important shift is now underway in global coal trade. With a completely new export route opening up for U.S. producers over the last few weeks.

To South Korea.

Platts reported yesterday that coal buyers in Korea have seen a surge of bookings for U.S. thermal coal. With sources telling the news service that 1.5 million tonnes of total U.S. supply have now been arranged for delivery between July and September.…/coal-addiction-spreads-as

“Pakistan has begun to dig up one of the world’s largest deposits of low-grade, brown, dirty coal to fuel new power stations that could revolutionize the country’s economy.

The project is one of the most expensive among an array of ambitious energy developments that China is helping the country to build as part of a $55 billion economic partnership. A $3.5 billion joint venture between the neighbors will extract coal to generate 1.3 gigawatts of electricity that will be sent across the country on a new $3 billion transmission network.”

ch coal

In China, there were many reports of “China’s coal consumption has fallen for 3 years straight.” That is true, but not mentioned on those reports is the fact that China’s coal consumption is already at a very high level, almost 2 billion million tonnes oil equivalent (MTOE)/year from 2013-2016. Data below from 1966-2015. Basic data taken from BP’s Statistical Review of World Energy (annual report).

ch coal (1)Source:

India keeps ramping up its coal consumption. Data from 1965-2014.

in coalSource:

Asia needs cheap electricity and stable energy sources. Governments should respect this consumer demand and aspiration — industrial, commercial, residential consumers. It’s good that many Asian governments and private sector players realize this. The endless lobbying to “kill coal to save the planet” will never prosper. Asia’s many developed and emerging economies cannot afford frequent blackouts and expensive energy that can make their manufacturing and service sectors become less competitive, less reliable.

Five myths of solar-wind energy

* This is my article in BusinessWorld on March 20, 2017


Variable renewable energy (RE) like wind and solar are far out from giving humanity sufficient, stable, and cheap electricity to sustain growth and fight poverty. For the simple reasons that they are very intermittent and expensive. Below are five of the common myths that we hear and read about wind and solar.

  1. Solar, wind, biomass, and other REs will replace fossil fuels as major global energy sources in the near future.

Wrong. From the projections by the two of the world’s biggest oil and gas companies, these REs, which may also include geothermal, will produce only 8.5% of global energy demand (Exxon Mobil data) or 6% (British Petroleum data) by 2025.

  1. The share of coal, gas, and nuclear will further decline as the world moves towards implementing the Paris Agreement of 2015.

Wrong. From both EM and BP projections, there is no let up in global use and demand for fossil fuel and nuclear sources in the near future. This is for the simple reason that people anywhere dislike power interruption even for one minute, much more frequent and involuntary outages lasting many hours, daily or weekly.


  1. Solar and wind are cheaper than coal now, their overall costs will keep falling.

Wrong. The feed-in-tariff (FiT) rates or guaranteed price for 20 years for solar-wind keep rising, not declining. For first group of solar entrants, their FiT rates in Pesos/kWh were 9.68 in 2015, 9.91 in 2016, and 10.26 in 2017. For second group of solar entrants, their FiT rates were 8.69 in 2016 and 8.89 in 2017.

For wind power first group of entrants, their FiT rates in Pesos/kWh were 8.53 in 2015, 8.90, in 2016 and 9.19 in 2017. For second group of wind entrants, their FiT rates were 7.40 in 2016 and 7.72 in 2017. Only the sun and wind are free but the panels, switchyards, cables, wind turbines, towers, access roads, etc. are not.

Current power prices in Mindanao are only around P2.80/kwh as many new huge coal plants compete with each other along with hydro and geothermal plants. No additional charges.

  1. Solar and wind have no social cost (SC) while the SC of coal is very high.

Wrong. Solar and wind are very land-intensive and, as a result, more areas for food, commercial, and forest production are diverted to accommodate more solar and wind farms. To have 1 MW of installed solar power, one will need about 1.5 hectare of land. So to have a 300 MW solar plant, one will need about 450 hectares of land; San Miguel power has a 300-MW coal plant in Mindanao sitting on only 30 hectares of land, or hectare/MW ratio of only 0.1 for coal vs. 1.5 for solar.

Since solar has a low capacity factor, only 18% of its installed capacity — from 450 hectares of land with installed power of 300 MW — can actually produce only around 54 MW.

Majestic solar, 66.3 MW in CEZA, Rosario, Cavite is not included here because it is a rooftop facility and hence, does not occupy extra land area.

  1. Carbon dioxide (CO2) pollution and emission from coal power plants will further warm the planet.

Wrong. CO2 is not a pollutant or evil gas. It is a useful gas, the gas that we humans and our animals exhale, the gas that our rice, corn, flowers, trees and other plants use to produce their own food via photosynthesis. More CO2 means more plant growth, more food production, more trees regenerating naturally, which have cooling effect on land surface.

The above five myths were among the topics discussed during the World Wildlife Fund (WWF) and Institute for Climate and Sustainable Cities (ICSC) “Roundtable on Philippine Energy Security and Competitiveness” last Friday, March 17 at UPSE in Diliman, Quezon City. The main speaker was Dr. Majah Ravago of UPSE and EPDP and she presented the main EPDP paper, Filipino 2040 Energy. The five reactors included Jose “Viking” Logarta of the ICSC and Dr. Christoph Menke of Trier University of Applied Sciences in Germany. Dr. Menke discussed the GIZ paper criticizing the EPDP paper.

201703201e1b5Governments should not create regulations that distort the energy market away from real competition. Insisting on dishonest claims like “carbon pollution” and “renewables to save the planet” only lead to more expensive and unstable energy supply, wasteful use of land and other natural resources.

Tony la Vina’s anti-coal alarmism

Aside from Greenpeace, World Wildlife Fund (WWF), Oxfam and other big environmental NGOs, one prominent anti-coal (and anti-fossil fuels, anti-mining, anti-…) crusader to “save the planet” is Atty. Tony la Vina, outgoing Dean of the Ateneo School of Government.

In his 3 recent columns (January 16, January 26, February 06, 2016) in The Standard, he articulated various anti-coal alarmism claims, below. I added some data and 2 articles from WUWT by Eric Worral.


The various “planet saviours” celebrated big time last December during the UN FCCC’s COP 21 in Paris, saying they signed a deal that will further limit fossil fuels like coal. But look at the chart — coal power is projected to experience the biggest rise and share to total global energy use. See WUWT, Is our certain fate a coal-burning climate apocalypse? No! July 21, 2015.

In Tony LV’s article today in The Standard, Coal is not least costly technology, he argued that

“When we factor in the environmental, health and social impacts of coal on communities—as we should—operating coal-fired power plants bear costs that are unfortunately paid for by people who will be affected the most by the ill effects of CFPPs. These costs are not often accounted for in the electricity price because they are considered externalities.”

Really? The clear alternative to coal aside from more natural gas (another fossil fuel) is frequent brownouts, frequent electricity outage. And what happens if there is frequent brownout? (a) More crimes at night as criminals love darkness, (b) more road accidents, (c) more fires as more people use candles, and (d) more air and noise pollution as more people buy and use gensets that noisily run on diesel.

Why? Because electricity from coal comprises more than one-half of actual power production in Luzon grid including Metro Manila in the first half of 2015. Another fossil fuel, natural gas, produced nearly one-third of the grid’s actual power generation. In the Visayas grid, coal produces almost 40% of power generation there.

EPDP Conference 2016, 12-13 January 2016, New World Hotel, Makati City.

Tony LV also wrote,

“In a previous column, I described how these pollutants harm the environment; the same also result in adverse health impact. Long-term effects of pollutants from CFPPs include respiratory, cardiovascular and neurological diseases.”

Really? As of 2014, Vietnam and Malaysia have nearly 2x coal power consumption than the PH. Taiwan and Indonesia have nearly 4x and 6x coal consumption than PH. S. Korea has nearly 8x and Japan nearly 12x coal consumption than PH.

Not to mention also huge coal power consumption by Germany, Russia, India, USA and China.

Source: BP, Statistical Review Power Data Workbook 2015

Do we see massive health problems on those countries that have more coal plants than the PH? If one is into emotionalism and alarmism, the answer is Yes. If one is into realism and facts, the answer is No.

Among the silent goals of anti-coal alarmism and emotionalism is to have more climate junkets, endless global junkets, for many years and decades, as “planet saviours” and climate negotiators. Even Japan considers high tech coal plants as saving the planet. More than 1,000 new coal plants in Asia alone coming up.…/japan-building-coal…/

Cheap oil, natural gas and coal prices

Last Saturday, a $35 a barrel oil at West Texas Intermediate (WTI) was breached. Airlines and shipping lines’ fares should go down, more tourism. More farm mechanization, more cows and carabaos will be spared of heavy farm work.


Some oil products other than WTI and Brent are actually cheaper than these. Like Western Canada, Iraq heavy, etc.


The anti-fossil fuel planet saviours

Many of the tens of thousands of planet saviours and climate hangers who went to the UNFCCC COP 21 meeting in Paris who hate fossil fuel may be shivering with this development. They want the world to cut petroleum use while they do their frequent jet-setting global meetings and junkets on airplanes that fly and cars that run on petroleum.

They will dislike that there will be more trucks, more buses, more cars, more planes, more ships that move more people and goods across cities, islands, countries and continents, as oil prices keep falling.

The animal rights activists should welcome this development too. Millions of cows, carabaos, horses, other big animals will be spared of heavy and punishing farm work as it is cheaper and faster to use more tractors and machines than those animals.

OPEC now a price taker, not price dictator

The old, tested greed by OPEC member-governments have been shattered by heavy competition from shale gas/oil drillers and producers in the US, Canada, etc. Before, whenever oil prices fall down, OPEC would quickly cut their output from 30 M barrels per day (bpd) to around 29 M bpd. Now they cannot and will not do that. They are forced to keep producing at 30-31 M bpd, accept low prices and lower revenues, just to keep their market share.

The rest of us, oil consumers around the world, benefit from this global competition among oil and gas producers. In the Philippines, the minor Peso/$ depreciation contributed to small price rollback. Besides, the $35 per barrel is for 1 or 2 months delivery, meaning by January or February 2016, not December 2015.

Peak Oil theory is discredited

Peak oil, along with peak food and Malthusian hypothesis, climate alarmism, discredited. The short- and medium-term scenario is that world oil prices will hover between $40-$60, still low compared to 2012-2013 levels of nearly $100. And lower than the past decade’s prices.

We are in a period of cheaper energy, cheaper food, longer lifespan, healthier people. The problem of many economies now is more fat/obese people than thin and undernourished people. When people die at 50 or 60 yrs old, some would say, “he/she died young”. In 1900, when a person dies at 40 or 50 yrs old, that’s “long” already because life expectancy was only around 33 years.

So few decades from now, if a person dies at 70-80 yrs old, other people will say, “he/she died young.” Why, because average life expectancy then will be at around 100, 110 yrs old.

Regulated fares and the LTFRB

But why despite oil and fuel prices going down, public vehicles in the Philippines do not automatically bring down their fares?  When fuel prices go up, PUV operators and drivers ask for a fare hike again.

The Land Transport Franchising Regulatory Board (LTFRB) of the DOTC is a jerk government agency. MARINA (regulator for shipping companies and operators) and CAB (regulator for airlines) allow fare deregulation. So airlines’ fares can go up or down depending on the travel season. The LTFRB officials, past and present, are among the hard-core central planning bureaucrats. No fares can go up or down unless they give permits, unless they affix their signatures.

Not only world oil prices, natural gas prices are also falling, chart over the last 7 1/2 years. More energy at cheaper price, more prosperity.


And world coal prices too. Since the Paris climate agreement is non-binding, no penalties for countries that do not obey their promised emission cuts, then more developing countries like India, China, Indonesia, Philippines, Brazil, etc. will be using this energy source to further empower their economy. Rich countries too like Japan and the US. Prices chart over the last 14 years.


Global capitalist competition will spring us more surprises, for the better. There are lots of shale gas/oil rigs that have been temporarily closed because of low prices. But there are lots more shale oil and gas deposits around. More global prosperity is the game.


Yes, cheap energy prices can contribute to deflation or declining overall prices of commodities and services. But it will be a good type of deflation. More output per unit of input. In this case, more oil, more natural gas, per rig.

There is a distinction between good and bad deflation. The good is productivity-driven (cheap oil, cheaper mobile phones and flat tv, cheaper food and shoes, etc.). The bad deflation is due to poor economic outlook in the future (people seldom spend even if they have the money).

There is little role for governments in this type of deflation, and they should not intervene more, like imposing higher petroleum taxes. The WB and IMF have been lobbying for this tax hike for sometime now. They believe that petroleum being a “public bad” should be taxed more. Nehh? Those WB, IMF, UN, other multilaterals’ officials and bureaucrats love to jet-set and travel a lot, on petroleum-powered planes and SUVs, meaning it is useful for them, then declare petroleum as a “public bad”?

Anti-coal, anti-nuke, anti-mining activism

Originally posted on April  14, 2011.

In one of my discussion googlegroups today, someone posted a campaign, “Please sign: Stop sacrificing the environment and the people’s welfare on the altar of profit”. Portions of the campaign said,

We, environmental advocates, members of the clergy and churchworkers, citizens, and leaders representing various organizations committed to defending the Philippine environment, unite to declare publicly our growing dismay over the state of ecological destruction and human rights violations under the administration of President Benigno Aquino III….

We challenge President Aquino to stop this sacrifice of the environment and the people’s welfare on the altar of profit. We assert our calls for a genuinely pro-people, pro-environment and progressive policy of stewardship over our natural resources by pursuing the following specific demands:

1. Stop the liberalization of the Philippine mining industry.
2. Stop the killings and human rights violations of environmental advocates.
3. Cancel the permits and operations of big commercial logging firms in addition to the logging moratorium.
4. Impose a moratorium on the construction of new coal power plants.
5. Reject the proposal to revive the Bataan Nuclear Power Plant.
6. Scrap the Japan-Philippines Economic Partnership Agreement.

The writers and endorsers of this campaign possibly forgot that the President came from the Liberal Party, not from the Socialist Party or a Nationalist or Anti-globalization Party.

A liberal, in the classic liberal tradition or even the current European liberalism philosophy, respects the free enterprise system, not more business regulations, more prohibitions.

On their specific demands:

1. Stop the liberalization of mining industry — and leave the industry only to local politicians and companies? Among the best practitioners of sustainable mining practices are the big multinationals which have global corporate brands and have modern mining and geological technologies to optimize mining with minimal damage to the environment. If we prohibit them from coming in, the mineral potentials of the country at the time that prices of important commodities and mineral products are very high, as well as the creation of many locals jobs, will not be optimized.

2. Stop the killing and human rights violations of environmental advocates — I support this, we should support this. And not only environmental advocates, all political killings and human rights violations of ordinary citizens should be stopped. Especially by political warlords like the Ampatuans.

3. On commercial logging ban — and leave the forests to carabao logging, local politicians logging? People need wood, whether we like it or not. The poor especially as they cannot afford the steel and cement housing, or aluminum/steel/glass furnitures. No commercial logging means zero supply of wood from legitimate sources, wood prices shoot up, and the bigger the temptation to do illegal logging by local politicians and carabao logging to take advance of the high prices of wood.

Commercial logging, supervised by licensed foresters and connected with long-term business contracts, practice sustainable logging. A logging concession area is divided into several blocks. For a 20-years cycle for instance, only 1/20th of the entire logging area is cut and cleared for a year, the remaining 19/20th of the area has thick forest, forever. It is to their business interests that there are trees to cut every year, so they keep planting every year.

4. Moratorium on the construction of new coal power plants, reject nuke power plants — and what else to prohibit, natural gas plants, petrol oil plants? And what will the new houses, new factories, new schools, new offices, new shops and malls use, candles and firewood?

Many environmentalists advocate the renewables like wind, solar, biomass, etc. That’s why we have the RE law, and the business cronyism associated with it as it gives lots of incentives and guaranteed profit for the wind farms, solar farms. Our already expensive power prices will soon become even more expensive due to mechanisms like feed-in-tariffs (FIT) and renewable portfolio standards (RPS).

5. Scrapping of Japan-Philippines EPA — and go back to the old trade protectionism? That EPA is not exactly a free trade agreement (FTA) but it is better than going back to high protectionism.

The petition also mentioned the “Earth Hour”. As I posted in Earth Hour lunacy, part 2, I wrote to the top 2 honchos of WWF-EH, Atty. Ibay and Mr. Yan where I sent them my article why the EH is a lunatic idea, they have one standard reply: silence of the lamb. Then I wrote a comment at the EH website comment section, they censored it. I consider the WWF as a bunch of noisy but coward environmental activists.

If the WWF officials and other environmentalist groups will protest my assessment of them, then I am open to any public debate with them on climate science and policy, anytime, anywhere. Leave a note of challenge at the comment section here.