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Electricity deregulation and re-regulations in Asia, Philippines in particular

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Presented during the Asia Liberty Forum last February 10-11, 2017, Mumbai, India

Published in: Government & Nonprofit
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Electricity deregulation and re-regulations in Asia, Philippines in particular

  1. 1. Bienvenido Oplas Jr. Pres., Minimal Government Thinkers Fellow, SEANET and Stratbase-ADRi Columnist, BusinessWorld Asia Liberty Forum Panel on “Regulations for a Prosperous and Innovative Market Economy” The Leela Mumbai, India February 10-11, 2017
  2. 2. Outline 1. Electricity supply and demand, selected Asia and developed countries 2. Electricity prices, selected Asia and developed countries 3. Regulations and bureaucracies in electricity 4. Re-regulation via “renewables to save the planet” 5. Summary and recommendations.
  3. 3. Economy 1985 1995 2005 2015 2005-2015 change US 2,591.1 3,516.8 4,257.5 4,303.0 1.1% Japan 672.0 968.6 1,153.1 1,035.5 -10.2% Germany 522.5 536.8 622.6 647.1 3.9% UK 298.1 337.4 398.4 337.7 -15.2% Australia 123.7 175.5 249.0 253.6 1.9% China 410.7 1,007.0 2,500.3 5,810.6 132.4% India 179.8 409.9 689.6 1,304.8 89.2% South Korea 62.7 203.5 389.5 522.3 34.1% Taiwan 55.6 133.1 227.4 258.0 13.5% Indonesia 16.4 58.9 127.4 234.7 84.3% Thailand 23.0 79.7 130.4 177.8 36.3% Vietnam 5.1 14.7 52.1 164.6 216.1% Malaysia 15.0 46.6 96.2 147.4 53.2% Pakistan 28.8 63.8 90.2 110.0 22.0% Philippines 22.8 33.6 56.6 82.6 46.0% Bangladesh 5.0 12.1 26.4 60.5 128.9% Singapore 9.9 22.1 38.2 50.3 31.6% New Zealand 27.7 36.1 42.9 44.3 3.2% Hong Kong 19.2 27.9 38.4 38.0 -1.2% Other Asia-Pac 64.0 48.2 65.5 105.1 60.3% Source: BP, Statistical Review of World Energy, June 2016 1. Electricity Generation, terawatt-hours (TWH) * From 2005-2015, developed countries’ output hardly growing if not shrinking; output of Jap, UK in 2015 almost same as in 1995 * Mainly due to their climate and energy regulations * Developing countries esp China, India, Indon., Vietnam, Bangladesh growing fast.
  4. 4. Economy 1985 1995 2005 2015 2005-2015 US 4,346.8 7,664.1 13,093.7 18,036.7 38% Japan 1,585.1 2,855.7 3,858.6 4,843.3 26% Germany 1,184.2 2,033.7 2,804.6 3,860.1 38% UK 722.9 1,224.1 2,008.5 2,702.0 35% Australia 231.8 413.5 729.3 1,140.6 56% China 655.0 2,254.6 6,617.3 19,695.7 198% India 633.6 1,426.3 3,238.2 7,998.3 147% Indonesia 304.8 849.7 1,356.4 2,848.0 110% Korea 167.9 544.7 1,094.8 1,853.2 69% Thailand 125.5 406.9 671.4 1,110.4 65% Taiwan 112.7 331.8 658.4 1,100.2 67% Pakistan 127.7 279.4 534.4 931.6 74% Malaysia 76.0 219.1 424.0 817.4 93% Philippines 109.2 201.6 367.1 743.9 103% Bangladesh 65.3 128.2 265.5 580.1 119% Vietnam 42.7 105.0 255.7 553.4 116% Singapore 38.3 115.3 235.1 472.6 101% Hong Kong 58.7 145.2 248.3 415.9 68% Myanmar n/a n/a 114.4 284.1 148% Sri Lanka 24.9 51.0 102.0 223.5 119% Nepal 9.9 20.9 38.5 70.2 83% Cambodia n/a 8.6 23.3 54.4 134% GDP size, PPP values, $ Billion (represents energy demand) * Expansion in GDP size is generally consistent with expansion in electricity output , 2005-2015 % ch. * Developed countries’ growth 20%+ to 50%+ * Developing countries’ growth 60%+ to 200% in one decade. Source: IMF, World Economic Outlook database, October 2016
  5. 5. Markets Jan. 2012 Jan. 2016 % change Japan (Kansai) 24.48 23.32 -5% Germany 22.20 19.78 -11% California (PG&E) 15.42 19.54 +27% UK 16.62 18.60 +12% Australia (WA) 19.93 16.14 -19% US average 9.67 9.31 -4% Hong Kong 12.88 15.10 +17% PHIL. (Meralco) 20.26 14.65 -28% New Zealand 16.18 13.08 -19% Sri Lanka 19.49 11.13 -43% Singapore 20.06 10.89 -46% Thailand 10.45 9.93 -5% S. Korea 8.91 9.47 +6% Malaysia 11.11 8.83 -20% Taiwan 8.71 8.73 0% Indonesia 8.51 7.03 -17% Source: Intl. Energy Consultants (IEC), Regional/Global Comparison of Retail Electricity Tariffs, Executive Summary, May, 2016. Report commissioned by Meralco. * Subsidized markets: Australia (WA), Indonesia, Malaysia, Thailand, South Korea, Sri Lanka, Taiwan. * Unsubsidized and deregulated: Japan (Kansai), Philippines, Singapore, NZ, US. Hong Kong is unsubsidized but unsure if deregulated. * All deregulated markets experienced price decline. * Mix result for subsidized markets: decline in MY, ID, SL and WA but incr. in SK, flat in TW. 2. Electricity Prices/Tariffs ave. excl. VAT, US cents/kWh
  6. 6. BWorld, DoE’s new circular will raise, not lower, electricity prices, Oct. 21, 2015 Other previous studies, PH has 2nd highest electricity price in Asia, next to Japan
  7. 7. (3) Regulations and bureaucracies: both national and local  Among the nearly 160 permits required to put up a base-load plant, taking up to 5 years  DOE streamlining to bring it down to below 100 permits
  8. 8. 2012 2013 2014 2015 2016 Jan 5.46 5.79 6.12 4.72 3.92 Feb 5.58 5.24 5.54 5.24 4.17 Mar 5.33 5.19 5.21 5.21 4.00 Apr 5.66 5.39 5.90 5.41 4.10 May 5.60 5.47 5.97 4.81 3.88 Jun 6.14 5.66 5.31 4.46 3.72 Jul 6.45 5.33 5.41 4.74 4.06 Aug 6.74 5.05 5.64 4.55 3.86 Sep 5.40 5.17 5.19 4.13 3.94 Oct 5.50 4.68 5.35 4.00 3.89 Nov 5.63 5.67 5.11 4.08 3.84 Dec 5.48 5.94 4.94 4.13 3.94 Ave. 5.75 5.33 5.41 4.62 3.94 PH power generation charge, Meralco area  WESM, spot market competition works.  But there are abt 8 other charges other than generation charge that raise overall price  Especially feed in tariff (FIT) for renewables, rising fast Deregulations via EPIRA of 2001: 1. Expanded competition among more generating companies (gencos). From a state monopoly (Napocor) to oligopoly to dozens of players. 2. Privatized Power Sector Assets and Liabilities Management Corp. (PSALM) assets. Privatized transmission, now under a regulated private company. 3. Established Wholesale Electricity Spot Market (WESM). 4. Introduced Performance Based Rate setting and replaced the backward return on rate base (RORB). 5. Introduced Retail Competition and Open A ccess (RCOA). 6. Removed public debt burden.
  9. 9. 4. Re-regulations via “renewables to save the planet”  PH’s RE law has more favoritism than RE laws of other Asian countries?
  10. 10. But the planet does not need any “saviour” * Climate change (CC) is cyclical (warming-cooling…), not “unprecedented”. * CC is natural (nature-made), not man-made. Temperature reconstruction* for N. Hemisphere, 1-2000 AD Modern warm period not exceptional or scary. Source: Dr. Roy Spencer, Senate EPW Hearing: “Climate Change: It’s Happened Before”, July 19th 2013.
  11. 11. “Man-made” CC means less rain, no rain and more rain; less flood, no flood and more flood…
  12. 12. 1970
  13. 13. 30 Jun 1953 – Kyushu floods A million Japanese homeless
  14. 14. Cannibalism in Shensi. – ENTIRE CITY RAZED BY FLOOD IN CHINA
  15. 15. 30 Nov 1912 – DEADLY TYPHOON. HOLOCAUST IN PHILIPPINES WASHING… http://trove. nla.gov.au/ 1912 reports on Tacloban storm ‘killing’ 15,000 resurface | Headlines, News, The Philippine Star | philstar.com
  16. 16. All news clippings above lifted from this site: https://stevengoddard.wordpress.com/ below350-org/
  17. 17. That is why where there are wind farms, there are NO houses, resorts, shops, hotels,… (aside from flattening mountain ridges, cutting thousands of trees there)
  18. 18. • Climate scare and alarmism, “renewables to save the planet” is all about more and bigger governments, more UN • About huge climate money, $100B/year or $500B/year • It is about more global ecological and energy central planning.
  19. 19. 1. Government regulations in electricity and energy consist of 3 levels: (a) outright state monopolization of power generation, transmission, distribution; (b) multiple taxes, permits and bureaucracies before one can put up power plants… 2. The worst is (c) energy rationing, ecological central planning “to save the planet.” But the planet does not need any saviour because CC is natural (nature-made, not “man-made”) and cyclical (warming-cooling). 3. Extreme weather, severe flooding and drought have precedents. It is dishonest to say they are only “recent due to more use of fossil fuels.” 4. Climate scare and alarmism is all about more governments, more UN, more climate money (target of $500B/year of financial central planning). 5. The UN and its hundreds of attached agencies including foreign aid, are non-friends of freedom and liberty. 6. To assert freedom and liberty, do not support UN and governments’ various moves at energy rationing and more regulations. 5. Summary and recommendations

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