Friday, April 27, 2012

Aboitiz invests P35B to increase capacity

By Nelson C. Bagaforo
Friday, April 27, 2012
ABOITIZ Power Corp. is bent on increasing Mindanao's power capacity by 354 megawatts (MW) in the next three years to help address the criticial power shortage on the island.
The power company, according to its president and CEO Erramon Aboitiz, will pour in a total investment of P35 billion until 2015 to achieve this.
"More investments and a competitive environment will ultimately lead to adequate, reliable and reasonable power supply needed to power Mindanao's growth," Aboitiz said in a briefing Thursday.
He said the additional capacity, which is expected to fill Mindanao's large power deficit, will come from the proposed 300-MW clean coal facility of Therma South Inc., which will be set up at the boundary of Binugao in Davao City and Inawayan in Sta. Cruz, Davao del Sure, and 54-MW of run-of-river hydro plants of Hedcor Inc.
Therma South and Hedcor are wholly-owned AboitizPower subsidiaries.
"There is an urgent need to implement a viable power strategy for Mindanao that will attract long-term investments in power, diversify the power sources and create a competitive supply market. Let us learn from the past and not provide band-aid solutions or even worst, solve the problem with expensive solutions that will hound us in the future," Aboitiz said.
Mindanao currently needs around 1,597 MW daily, but existing capacities produced by power sources on the island can only produce 1,261 MW as of April.
More than half of the power plants in Mindanao source their energy from the Agus and Pulangi hydro stations, which are no longer capable of generating power based on their original installed capacity.
Aboitiz said the biggest challenge for Mindanao is its heavy dependence on hydro sources of energy. He said there is a need to diversify Mindanao's power sources and lessen its dependence on hydro power.
"We think what needs to be put in place is a competitive and transparent environment where new capacity will complement the existing hydro plants of the NPC (National Power Corporation)," he said.
To cushion the effects of the current crisis, Aboitiz Power subsidiary, Therma Marine Inc. (TMI), is running its 200-MW oil-fired power barges moored in Nasipit, Agusan del Norte and Maco, Compostela Valley in Davao. It provides 192 MW to 23 electric cooperatives, distribution utilities and industrials on the island.
According to Aboitiz, TMI is the cheapest and the most efficient oil-fired power facility in Mindanao today with an average rate charged to its customers at P8.29 per kilowatt-hour.
He said 90 percent of TMI's rates are for fuel and other consumables, which are not retained by the company.
The remaining 10 percent of its revenue is used to pay for fixed costs, such as salaries, insurance, repairs and maintenance, and debt service, with any residual amount representing the company's return on its investment.
"Our long-term investments in both power generation and distribution in Mindanao are a testament to our commitment to be part of the economic development of the region. We have been in Mindanao since the 1930s and want to continue to be part of its future growth," Aboitiz said.
"Aboitiz Power is committed to support this growth by providing reliable, reasonable and responsible power supply," he added.
Published in the Sun.Star Davao newspaper on April 27, 2012.  source

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