Power crisis confirmed in Mindanao

TUESDAY, 27 MARCH 2012 20:17
THE BUSINESSMIRROR EDITORIAL


AMID the power shortage in Mindanao that has caused widespread rotating blackouts lasting up to eight hours, President Aquino has urged power distributors to “share the burden” of more expensive electricity from power barges.
What he left unsaid, however, was what consumers should do amid the debilitating power outages: Grin and bear it, because there’s really nothing we can do about it? Or perhaps, brace for the worst?


The President asked the power distributors to “share the burden” of higher electricity rates because apparently he did not want to antagonize ordinary Filipinos who will, in the end, pay higher rates for their power consumption. That is, if they can get it at all, because supply is very limited.


The government has already deployed two power barges in Mindanao, but it seems there’s only one contributing to the power grid.


The bad news comes from Energy Secretary Jose Rene Almendras himself, who said the power-supply deficit of up to 270 megawatts daily would run through 2012 and 2013. The earliest they could set up new coal-fired power plants in Mindanao would be 2014.


Almendras said two plants expected to be operational by 2014 are coal-fired ones, which could generate electricity cheaper than the diesel-fueled barges. Cleaner hydropower plants, he explained, may not be viable in the long term as the changing rainfall patterns in Mindanao due to climate change might affect their operations.


The energy department estimates that Mindanao will require some 2,500 MW in additional generating capacity over the next 20 years. It wants to install a total of 1,055 MW of additional generating capacity in Mindanao in the next six years. However, only about 25 percent of this is actually covered by projects that have already complied with the permits and clearances of various agencies, and have been assured of funding. The balance of 75 percent is still in the planning stage.


Mindanao’s power-supply deficiency appears to be due to a confluence of factors. There’s definitely lack of foresight on the part of government planners who failed to anticipate the increased power demand due to a growing population and increased economic activity. Then there’s the unstable security situation on the island because of armed rebellion and the presence of terrorist groups and criminal syndicates engaged in kidnapping for ransom. Given this, it’s not surprising that the private sector does not see power generation in Mindanao an attractive option.


As things now stand, it would take another two years to build new power plants. Meantime, Mindanaoans would have to pay higher electricity rates, or else curse the darkness. Which means they have to pay higher electricity rates than those from Luzon and Mindanao. And this is unfortunate because our rates are already the highest in Asia, which is a big disincentive to foreign investors.


Mindanao contributes more than a fifth of the country’s gross domestic product. But with the island’s severe power shortage, investors would definitely be wary of putting up new factories and businesses, and creating badly needed jobs there.


Band-aid solutions, such as the deployment of extra power barges, are simply not enough to cover Mindanao’s long-term supply requirements.


What’s going on in Mindanao could happen in other parts of the country unless the national government takes decisive steps now and builds new power plants to cope with expected population growth and accelerated trade and commerce. Most of the country’s power plants are old. And building clean and green power plants driven by renewable-energy sources and favored by environmentalists is an expensive proposition.


Today it’s Mindanao. And unless the government moves fast enough, Luzon, including Metro Manila, as well as the Visayas, could be plunged into debilitating darkness and economic inertia.