Monthly Archives: March 2015

How Metro Manila can avoid brownouts this summer

How we can avoid brownouts
this summer without spending P450 million

by Roberto Verzola

[The author will launch his book Crossing Over: The Energy Transition to Renewable Electricity this March 23, 2015, 9 a.m., at The Patio of the UP Hotel, at the University of the Philippines, Diliman Campus. The book was published by the Friedrich Ebert Stiftung of Germany. The author may be reached at 0939-117-8999 or See for details.]
The government is preparing for a 2015 power crisis. This crisis, according to the testimony of Department of Energy Assistant Director Irma Exconde before Congress last October 2014, is basically a 31-megawatt shortfall in supply for around two critical weeks in April.

The government’s solution is the Interruptible Load Program (ILP), which will subsidize the expenses of large companies who have their own generators, if these have to be run due to impending brownouts. The estimated cost of the ILP program: around P450 million, charged to electricity consumers. (See Jess Diaz, “ILP to cost power consumers P450 M,” Philippine Star, Nov. 21, 2014.)1

March is now ending. Early mornings are still cool, but warming. The truly hot summer can start anytime soon. We probably still have a week or so before the crisis begins to be felt.

Here is a simple way to prevent brownouts from occurring in Metro Manila. Other electric utilities and cooperatives can use the approach too, if at least one TV station covers their service area.

Imagine a screen that shows the available electricity supply in megawatts (MW) as a horizontal line near the top of the screen. Imagine the actual demand, also in MW, tracing another graph on the same screen─in realtime─from 7 a.m. to 11 p.m. The 24-hour load curve of Meralco in shown in Figure 1.

Figure 1. Meralco’s 24-hour load curve
meralco load curve
This is not difficult to do. I have seen such displays in the offices of suppliers of electricity. I am sure the Department of Energy can produce such a display.

Now, imagine the trace of the actual demand inching up, as we rise in the morning, turn on some appliances and do our chores. Later in the morning, the graph rises faster, as the people arrive in their offices, turn on the lights, the airconditioning, and their computers, and as factories and workplaces start up machines and other electrical equipment. As the sun rises higher in the sky, more aircons and electric fans are turned on; aircons work harder.

The demand curve is now approaching the horizontal supply curve. The drama is building up.

Now, imagine television stations broadcasting the same screen, and the Secretary of Energy─or the President himself─explaining on TV that each individual can do something to prevent a brownout. They only need to turn off some of their less important electrical loads: lights in unused rooms, along corridors; one of three electric fans, postponing ironing to off-peak hours, and so on. Some will surely respond, especially if a prior media build up had been orchestrated earlier. One million responses─each turning off a 40-watt or so load (one fluorescent or incandescent lamp, one electric fan, or one computer)─is more than enough to cover the 31-MW shortfall.

As the responses come in, the demand curve takes a noticeably less steep path, but it keeps approaching the supply line. The tension is becoming almost unbearable. On radio and TV, the Secretary sends out another desperate appeal. Seeing that their actions did have some effect on the curve, people will respond some more, and urge others to act too. A critical mass of people now realize that it is better turn off some appliances on your own, than lose all power. Text messages fly, urging participation.

Watching the demand curve now feels like watching, live on TV, a typhoon that is about to hit. but it is also swerving, thanks to people’s earlier responses. Thus, more will be encouraged to join in, or to do more. It becomes a challenge, a race against time, or─if you will─a game: do we win or do we lose?

If we win, one can surely imagine a collective cheer in every home and office watching the screen, as if Pacquiao had just scored a knockdown. But this time, it is everyone’s victory.

If we lose, a brownout happens somewhere in the grid, as the system sheds some load to avoid overheating the generating plants. One can imagine hearing a collective sigh throughout the island. But with some loads shed off, the demand will drop below the supply line again; we are back in the game!

Imagine doing this everyday over a two-week period, as we collectively struggle to spare the country from brownouts by pressing one switch and then another, as if we were playing an online game. It will be the greatest drama of the summer break.

With a more sophisticated display, we can make the “game” more interesting (though this is not absolutely necessary).

We can split the grid into four sectors, and split the screen into four too, each quarter of the screen showing the demand curve and supply line for each sector. Only those sectors that fail to turn off enough loads get the brownouts. Now it becomes a contest between sectors too. But everyone can win, if they can, collectively as a sector, manage to swerve away from the supply line without hitting it.

There is no way this won’t work! This can become our national game every summer.

By the way, this approach is called demand-side management (DSM). The secret here is instant feedback. People can see right away the results of their collective act. If you can see that what you are doing matters, you are bound to do more of it.

Remember: all this needs is for the Department of Energy to set up the screen and the media to broadcast it. The public will do the rest. We will because we do not want to be billed that P450 million .
March 23, 2015

Net energy metering opens the floodgates to solar rooftops and other small-scale renewables

A very effective way of quickly deploying solar photovoltaic (PV) systems is the scheme called net metering, also called net energy metering.

This scheme is now in place in 44 U.S. states, opening the floodgates to rapid solar PV deployment in the U.S. What is being called a “net metering war” is now raging in the U.S., with utilities trying to roll-back net metering, especially its pricing model called parity pricing, which credits solar rooftop owners the full retail price for any surplus they export to the grid.

In some U.S. states, the utilities are succeeding. Here in the Philippines, the utilities won the war even before a single shot was fired, by drafting themselves the “net-metering” rules in the country.

For a review of the net metering debate, and the arguments which show that the utilities position actually leads to the double-charging of their net-metered customers, please download my piece “Net metering opens the floodgates to solar rooftops and other renewables.

Roberto Verzola

Splitting the gain from trade is a value-laden act

In this highly condensed piece of a longer article I’m working on, I analyze a single market transaction between a buyer and a seller.

I point out that the difference between the buyer’s reservation price (or willingness to buy) and the seller’s cost is  the potential gain from trade if this particular transaction is concluded.

For the transaction to actually happen, the buyer and the seller must agree how to split the gain from trade. If they don’t agree, the transaction is aborted, and both sides lose the potential gain from trade.

The problem of how the gain from trade should be split between the two sides is a matter  that involves values about sharing, fairness and justice. It is an inherently ideological act.

I analyze the various ways that this problem is resolved, from various perspectives: neoclassical price theory, game theory as applied to bargaining, social philosophies of justice, and commonly-accepted values of existing societies.

And I show that considerations of fairness almost always figure in the resolution of the problem.

I will also post the longer article, when I’m done with it.

I will appreciate any comments.

Roberto Verzola

Crossing Over: Making the Energy Transition from Fossil Fuels to Renewable Electricity

I have just finished a book entitled Crossing Over: The Energy Transition to Renewable Electricity, published this year 2015 by the Friedrich Ebert Stiftung.

As with my other works, I’m making the file of this book available on this blog so that anyone may download it for free, and share it with others.

Many of the book’s contents are specific to the Philippines, where rooftop solar electricity became cheaper than grid-delivered coal-based electricity sometime in 2013. However, a number of insights are useful to other countries.

In particular, I present in the book a strong argument for net metering. I explain why another approach, usually called net billing, which pays grid-connected solar rooftop owner only the generation charge (roughly one-half of the retail price), is actually double-charging.

Please let me know if you found anything useful in the book.

Roberto Verzola