Cohesive roadmap needed to address Mindanao power situation — PCCI PDF Print E-mail
Saturday, 31 March 2012 15:15

The Philippine Chamber of Commerce and Industry (PCCI) is calling on government to come up with integrated short- and long-term strategies to address the power supply shortage problem in Mindanao.

In a statement, the PCCI said it needs to ensure the growth potential and continued operation of enterprises and industries in the island and avert serious unemployment and lay offs.

The business group said it is critical that the situation be immediately addressed with a blend of strategies uniquely crafted for the island in order to draw and move larger economic activities in that part of the country.

Noting that Mindanao is designed to be a lower-power cost area, PCCI stressed that solution to the current crisis should not be focused only on the supply side, which would cause disastrous results to consumers in terms of power cost, as is now being experienced in Luzon and the off-grid areas.
A coherent solution must be complemented with sustaining lower power cost.

PCCI President Miguel Varela pointed out “As strategically and correctly planned years before, lower power cost was the key driver in making businesses locate and thrive in Mindanao and would be the a strong platform in achieving peace in the area.”

PCCI noted that to sustain this strategy, hydro plants should be Mindanao’s core energy source; that hydro-based plants should be enhanced and complemented with diesel-based reserve power facilities.

Jose Alejandro, Energy Vice President, explained “As part of the hydro strategy, diesel plants and barges should remain to be in government hands as dispatchable reserve or standby power.”

He cited as example the Agus hydro-plant, which can produce power at about P3/kWh. With dredging, rehabilitation and expansion, Agus can produce up to 800 MW of power for about nine months instead of six months only, and a potential year-round dependable capacity of up to 350 MW.

Agus’ supply capacity can be complemented with 450 MW of slow speed diesel capacity.

With 200 MW standby generation sets reported to be privately-owned, only 250 MW diesel-based will be needed to complement Agus.

This example of hydro-diesel strategy will bring an incremental cost of about P1/kWh in spread-out fixed costs, or total cost of P4/kWh.

Alejandro added, “Mindanao consumers will only pay for the diesel fuel when they run during the summer.”

PCCI acknowledged that while coal plays an important role in the generation mix, the high power cost will overwhelm Mindanao consumers.
Hence, the development of other baseload generation plants with coal at the forefront, must be done only after fully developing all the potential hydro-electric power sites in the islands.

To shore up the situation, PCCI proposes the following immediate measures leading to a mid-term and forward-looking development:

—Implement formal rolling blackout/load shedding program with special and clear concern for areas where industries and major economic activities are located to avoid major lay-offs

—Negotiate with the Aboitiz Power to bring in Therma Marine as baseload and at baseload rate for 24 months or as needed, which should be substantially lower than its asking “peaking” rate of P14 kWh. Be sure, however, that the Bislig transmission line is reliable.

—Hold an international bidding for the repair-operate-maintain-transfer (ROMT) of the Agus-Pulangui Hydro Plants which should release some additional 150 MW in less than 15 months; relocate-repair-operate-maintain-transfer (RROMT) for power barges 101, 102, 103 and 104 which should result in 120 MW supply in less than 15 months at cost lower than current similar source; ROMT of the 100-MW diesel plant in Iligan.

—Closely support the development and construction of the 200 MW coal-fired plant of Alsons in General Santos, which should be on line in two to three years

—Closely support the 300 MW coal-fired plant of the consortium of 21 coops, which should be on line in 3 to 4 years… this should produce reasonably lower price power since it is co-owned by the coops.

Varela emphasized that PCCI supports a clear and predictable roadmap that would give immediate, short term and mid to long term response to the Mindanao power crisis effectively addressing the desired power supply and lower power cost.

This, he said, also supports the call of the President to alleviate the crisis.