Monday, September 22, 2014

A power plant on every roof

By Doris C. Dumlao 
Philippine Daily Inquirer
5:03 am | Monday, September 22nd, 2014

MANILA, Philippines–This 21-year-old entrepreneur dreams of converting every roof deck in the Philippines into a power plant, banking on improvements in solar technology to help deal with the country’s looming power supply shortfall.
Leandro Leviste, founder and president of Solar Philippines— the country’s first all-in-one solar financing, design, construction and maintenance company—took one big step forward last Saturday with the launch of the 700-kilowatt Central Mall Biñan rooftop solar system, Southeast Asia’s largest own-use power project so far.
The project is pioneering in many ways. It is the first solar installation financed by a local bank, Bank of the Philippine Islands (BPI), the first offered at a rate competitive with fossil fuel and the first solar-powered shopping mall in the country.
Furthermore, Solar Philippines has also bagged deals to construct solar systems in other shopping malls, including SM North Edsa, Robinsons Palawan and CityMall Roxas.
Leviste’s company expects to complete at least seven more solar projects for shopping malls by end-2014.
“I come from a family of environmentalists but for me, this is more about addressing one of the country’s greatest economic challenges—the high cost of electricity,” said Leviste, a son of Sen. Loren Legarda, a known advocate of climate change awareness.
“I also believe that only by making a solution commercially viable can it reach meaningful scale in mitigating climate change. Solar is a technology that’s long been tried and tested, but which has not reached wide adoption because no company had packaged this in a way marketable to consumers—zero up-front, as an operating and not a capital expense,” Levite said in reply to an Inquirer query.
Below Meralco rates
Leviste’s Solar Philippines financed, designed and constructed the entire system at no up-front cost to Central Mall Biñan. Under a power purchase agreement, solar electricity is supplied directly to the mall at below rates charged by Manila Electric Co. (Meralco), which guarantees savings from Day One—a first for renewable energy in the country.
Spanning over 7,000 square meters, Central Mall Biñan’s rooftop solar-power system is made up of 2,514 solar panels and equipment from premium German brands. It can cover 30 percent of the mall’s energy needs, in turn reducing the electricity bill by millions of pesos a year.
The roof-deck system can produce enough energy to power 1,000 homes and its expected operation in more than three decades will offset over 20,000 tons (18,143.7 metric tons) of carbon dioxide, equivalent to the planting of 100,000 trees.
“The days of having to choose between business and the environment are over,” Leviste said. “Solar has gained the reputation of being expensive, not because of the technology but because previous applications were too small to benefit economies of scale. By building the country’s largest solar rooftop projects, we have become the first local company to make solar cost-competitive with fossil fuel.”
“Solar technology is already tried and tested. The problem has been the business model and this is the first company to get it right,” said Energy Secretary Jericho Petilla, who graced Saturday’s roof-deck inauguration in Biñan City, Laguna province. “I commend Solar Philippines for bravely pioneering this zero up-front scheme, which is an obvious choice for customers.”
By next summer, the Department of Energy (DOE) plans to cap air-conditioning temperature in shopping malls to 25 degrees Celsius to conserve peak power. However, Petilla noted that “solar-powered malls would be exempt from this policy.”
Power supply shortfall
Warning of a supply shortfall of 500 megawatts in 2015, the DOE has increased its solar installation target from 50 MW to 500 MW, noting that a solar plant’s fast construction time makes it a natural solution to the looming power crisis.
This is a plan that doesn’t sit well with some economists, who fear that Filipino electricity consumers will be burdened with additional power charges under the feed-in-tariff subsidy.
For his part, Leviste believes that everyone can be part of the solution. “All commercial and industrial building owners can help curb the power shortage by converting their rooftops into solar power plants.”
Road to entrepreneurship
It all started a year and a half ago, when Leviste read about how a US company called
SolarCity pioneered the model of fully financing solar rooftop installations at zero up-front cost, supplying electricity at below utility rates.
“Despite the Philippines having the highest electricity rates in Asia and the decreasing cost of solar panels, no company had been able to replicate that model in the Philippines. So I dropped everything to pursue the opportunity. Once I started, I realized other things that made this the perfect niche for a start-up: huge potential, a low barrier to entry and entirely untapped because the model was very different from what traditional power companies were used to,” said Leviste.
Yale study on hold
Leviste was about to finish his senior year at Yale University, where he was majoring in political science with the hope of becoming a lawyer, when he heeded the call of entrepreneurship.
“I tried to juggle this and my studies for a semester but then realized the importance of focus. So school is now on indefinite hold,” he said.
The young businessman has since then assembled a 35-person team with over 100 years of combined experience in the solar energy, construction and power industries.
Solar Philippines is now completing over 50 MW of solar power projects by the first quarter of 2015. “In the range of experiences of our solar engineers, I’d like to think we’ve built a monopoly over solar expertise in the Philippines,” he said.
In the first few months, Leviste ran Solar Philippines from his bedroom, learning as much as he could from people in the industry here and abroad while sinking his teeth on a pilot project.
“Building a company has definitely been more difficult than building a project. It was a series of tiny victories, with lots of embarrassing moments and lots of firsts, but [it] ultimately came together in the end,” he said.
“I think that in this generation, the power to make a difference really is in the hands of entrepreneurs, not policymakers, and that the pace of innovation from Silicon Valley will open many opportunities for those who seek it. I grew up expecting to enter politics but realized that in the 21st century, it’s entrepreneurs who are changing the world,” he said.

Zero up-front cost model
Solar Philippines’ mission is to make solar energy cheaper than coal and affordable for every home and business in the country.
“The reason we’ve been able to build the largest projects in the country is that we’re the first and only company to get prices low enough to produce a compelling return on investment; and in a self-reinforcing cycle, those large projects allow us to reach ever lower costs. Moreover, we’re the only local company that both finances and installs solar plants, meaning we pass on the savings of full-integration to the end-user,” Leviste said.
He noted that Solar Philippines was a long-term oriented company that believed in building partnerships with key customers and, as a result, would happily accept slim margins for large volume.
Leviste does not see solar power in competition with any other energy source because of its potential for distributed generation.
“Even if others might be able to reach a lower generation cost, on top of that would be the transmission, distribution, other charges, resulting in an end-user cost nearly twice as high. This is in comparison to solar, which can bypass that entire value-chain by generating power on-site. You can’t build a coal, gas or hydro plant, or even a windmill on the roof of any mall. But you can mount solar panels!” he said.
Break-even point
For enterprises using solar power to augment electricity needs, the estimated break-even point depends on the franchise area. Meralco has a high electricity cost and a “demand-based” component. Thus, the bill for commercial and industrial customers is based on their highest kilowatt-demand at any point in the month.
“Given that most customers still have peak load in the late afternoon or evening, the distribution and transmission portion of your bill—nearly 20 percent—remains intact. But, bottom line, you should expect six- to seven-year payback, or a 15-percent annual return, for a system that’s warrantied for 25 years. So the numbers look great! The challenge remains in surmounting the high initial capital investment and this is why we’ve introduced zero up-front financing to the local market,” he said.
Huge market
Edgar Sia II, cofounder and chair of DoubleDragon Properties Corp., which plans to build a large chain of community malls across the country under the “CityMall” brand, has affirmed the use of solar power as part of his group’s road map.
“We are working with a few solar power groups because all the upcoming 100 CityMalls around the country [by 2020] will have both solar power and rainwater collection systems as part of our long-term planning and outlook,” Sia said in a text message.
“Solar power makes sense for mall developments because malls have underutilized big-roof footprint and also because malls consume daytime power simultaneously with the sunshine.”
CityMall in Roxas City will have 650 KW of solar power generation capacity, covering about half its requirements. The SM North Edsa roof-deck project is estimated to generate 1.5 MW, covering less than 10 percent of its requirements, while Robinsons Palawan is estimated to generate 1.2 MW.
More SM malls are expected to resort to solar power. The SM group, led by the family of tycoon Henry Sy, is not a stranger to solar power generation. In mid-2013, SM City Xiamen launched a 1.1-MW rooftop solar power project, the first of its kind in Xiamen, involving the installation of 3,740 solar panels.
JoAnn Eala, BPI vice president and head of sustainable energy finance and specialized lending, shares optimism on solar power projects, especially among commercial and industrial users.
“More and more mall and large-rooftop owners realize that they need not fall victim to the power crisis and impact of climate change that have been disrupting business operations. In six to eight months, solar rooftops can provide or augment the power they need. Funding is not a problem, as banks, like BPI, have financing programs that also provide free technical advice.”
For Leviste, the potential for solar power is as big as the entire Philippine electricity market. “There’s more than enough rooftop space to meet the entire country’s energy requirements and it makes financial sense to go solar in nearly every electricity franchise in the country,” he said.
Consumer education
“Provided that the numbers now work, the remaining bottlenecks are the willingness of banks and consumer education. No doubt this is a long process that will take several decades to transition to renewable energy and distributed generation, but our company is here for the long haul,” he added.
Given the market’s potential, Leviste said it was not a question of gaining market share but of coping with demand. Apart from Central Mall Biñan, SM North Edsa, Robinsons Palawan and CityMall Roxas, his company is in talks with a number of other large industrial and commercial chains.
Residential customers
In the long run, Leviste sees solar power becoming affordable, even to ordinary households. “Electricity rates are 50-percent higher for residential than commercial consumers and while there’s a high initial investment, you’ll be generating a return on investment of over 20 percent a year, he said.
“The challenge remains in achieving economies of scale and the advantage of our doing the largest projects in the country is that we can pass our cost-savings from economies of scale onto residential consumers,” he added.
His vision is for Solar Philippines to become the first distributed generation utility in Asia by making solar energy accessible and affordable to every home and business.
His is the same vision as that of SolarCity, founded by Elon Musk—also the founder of Tesla Motors, the world’s first successful electric car company— who believes in a future where every building will be powered by solar energy on its rooftop, replacing the electricity grid we know today.
“It’s an exciting vision and something I see happening in my lifetime. To put things in perspective, in the early ’90s, cell phones displaced fixed-line telephones a lot faster than people had expected,” Leviste said.
“One thing for sure is that by the number of massive projects completed by next summer, consumers will never look at solar the same way again.” source

Campaign on to save ‘cleanest’ river in PH

By Maricar Cinco |Inquirer Southern Luzon
5:30 am | Monday, September 22nd, 2014

MANILA, Philippines–The Cantingas River, which meanders to its headwaters on Mt. Guiting-guiting, supplies 90 percent of Sibuyan Island’s electricity, showing the rest of the world how a small island-community benefits from renewable energy.
The natural hydroelectric power source, found on the remote island of Romblon, was featured in the fourth “24 Hours of Reality,”an annual multimedia show about the global climate crisis live-streamed from New York City.
This year, the show ran from 12 noon on Sept. 16 (Eastern Daylight Time, or 12 a.m. on Sept. 17 in Manila), with the segment showing the Philippines’ Cantingas River on the 11th hour, or 10 a.m. on Sept. 17 in Manila.
It is an initiative under The Climate Reality Project, a global campaign founded by Nobel Laureate and former US Vice President Al Gore in 2006.
The segment on Cantingas River, titled “Field report: at the river camp in the Philippines,”is a 10-minute video about Sibuyan’s clean energy “success story.”
Environmentalist and Climate Reality Leadership Corps district manager Rodne Galicha was seen scooping a cup of water directly from the river to show that it was not only a source of energy but of clean, potable water as well.
The video was live-streamed simultaneously at Colegio de San Juan de Letran and De La Salle College-St. Benilde, both in Manila, garnering 10 million online live views.
Clean energy
In the Philippines, 67 percent of rivers are “too polluted [to be used] for domestic use” while 10 percent are considered “biology dead,” Galicha said in the video.
The Cantingas River, on the other hand, has been deemed the “cleanest inland body” by the Philippine government since 2007.
Since 2010, the entire Sibuyan Island (composed of Cajidiocan, San Fernando and Magdiwang towns) draws power from the river through a hydropower plant that generates 900 kilowatts for 57,000 users.
“We used to be with Napocor (National Power Corp.) but whenever there are strong typhoons and the barge supposedly carrying fuel cannot dock, the whole island would lose electricity,” Galicha said.
“We want to send a message that if we, a small island, can do it, why not the rest of the country?” Galicha said in a phone interview.
On Thursday, students, village leaders and religious groups headed to the river outflow in the City of San Fernando for the launch of an island-wide campaign to preserve the Cantingas River.
They planted 25 ironwood trees, lit 25 candles and shared 25 kagabkab (a kind of fried cassava crackers) along the riverbanks. This happened days before the International Mining Conference was held, when Sibuyan renewed its stand against mining.
“The ironwood symbolizes our resiliency while the kagabkab, food security,” Galicha said.
Twenty-five symbolizes the usual length of years a mining permit issued to companies lasts.
In 2011, the provincial government issued a moratorium against all forms of mining. The local government also suspended existing mining permits, including that of Canadian Altai Mining, for the exploration of 1,580 hectares in Sibuyan.
“Our stand is for a total revocation of the mining permit,” Galicha said. source

Congress, DOE set talks on emergency powers

By Iris Gonzales (The Philippine Star) | Updated September 22, 2014 - 12:00am

MANILA, Philippines - The Department of Energy (DOE) and Congress are set to discuss President Aquino’s request for emergency powers to deal with a projected electricity shortage in Luzon in the summer of 2015.

Sen. Sergio Osmeña, who chairs the Senate committee on energy, has asked for a special meeting with Energy Secretary Carlos Jericho Petilla and Power Sector Assets and Liabilities Management (PSALM) president Emmanuel Ledesma Jr. to thresh out details on the grant of special powers.

Congressmen, meanwhile, want more details about Aquino’s proposed special powers.

“We will be meeting with Sen. Serge Osmeña. He agreed to it,” Ledesma said. “We will provide him with additional information and updates.”

Other lawmakers, however, urged Malacañang and DOE to submit the details of Aquino’s request for emergency powers to deal with the projected electricity shortage.

Isabela Rep. Rodolfo Albano III said no details have been submitted yet nine days after Malacañang sent Aquino’s request to the House of Representatives and the Senate on Sept. 12.

“We want to help the President, but we have nothing to act on. His letter-request is just a communication. It’s not a proposed law, it’s not a draft bill or a joint Senate-House of Representatives resolution containing the details of the proposed emergency powers,” he said.

Albano said if a bill or resolution were sent with the request, one or more members could have authored it and the two chambers could have referred it to the appropriate committees for hearings.

He pointed out that senators and congressmen cannot draft their own proposed law on emergency powers because they do not know the details of the special authority Aquino is seeking.

Malacañang, on the other hand, said it would just wait for the discussions between Congress and the DOE on President Aquino’s request for emergency powers, noting some lawmakers were questioning it.

Despite the reservations expressed by some lawmakers on the request, presidential spokesman Edwin Lacierda believes the legislature is also concerned about the looming power crisis.

“I think our government officials, both in the executive and legislature, are fully aware that there is possible power shortage. The position taken by the DOE is that we need to exercise or invoke Section 71 of EPIRA (Electric Power Industry Reform Act),” Lacierda said.

“The legislature may have a different view but we are certain that they are just as concerned in making sure that we address the possible power shortage in 2015. As to what the final proposal will be, let’s wait for the discussion between the House and Senate and the energy secretary,” he added.

The special powers, possible through Section 71 of the EPIRA of 2001, or Republic Act 9136, will enable PSALM to tap additional capacity for the summer of 2015.

Lacierda said the different views on averting a power crisis need to be discussed and threshed out as provided by law.

‘Time is of the essence’

Ledesma, on the other hand, revealed that PSALM, the government corporation tasked to privatize state-owned power assets, is already in talks with four to five suppliers of generator sets, which can provide the additional capacity, so that it can be ready if and when Congress approves the declaration of a state of emergency in the power sector.

“Time is of the essence,” Ledesma said.

“We are at the stage of accepting and evaluating proposals sent to PSALM and DOE in case Congress grants the request for emergency powers. There are around four foreign companies. We would need to secure 300 megawatts of gas and/or diesel generator sets. Factors to consider include comparative cost, delivery time, minimum O&M contract period required as well as availability of fuel,” he said.

Petilla proposed to invoke Section 71 of the EPIRA to allow PSALM to tap additional capacity next year.

Under Petilla’s plan, PSALM would rent bunker-fueled power facilities to fill the projected shortfall of 300 to 500 MW.

He said the Philippines would need 9,011 megawatts of power next year, higher than this year’s demand of 8,717 MW on the back of the projected growth in the economy.

Energy officials assured critics that Section 71 would be used only to tap additional power capacity and not for the government to take over power plants.

Last week, President Aquino asked Congress for emergency powers to allow him to solve a power shortage next year.

In a letter dated Sept. 12, Aquino called for the immediate enactment of a joint resolution allowing him to establish additional generating capacity.

He informed lawmakers that the DOE is predicting a “critical electricity situation” in the summer of 2015 due to, among other factors, the expected effects of the El Niño phenomenon and delays in the start of operation of “committed power projects.”

“There is no gainsaying that the imminent electric power shortage during these months is a real threat to the country’s growing economy and the general welfare of the people.

“The speedy enactment of the joint resolution will ensure the energy requirements of the country for this critical period – through a specific, focused and targeted acquisition of additional generating capacities for use during the limited periods of time of very tight energy supply,” the President said.

“This authority is needed in order to address the imminent shortage of electric power for the summer of 2015 in Luzon. I look forward to a favorable response from both houses (of Congress),” he said.

‘Not too fast’

Lawmakers, however, said they could not rush discussions on the request because the issue is complicated.

Senate President Franklin Drilon said the President’s letter was too “broad.”

Sen. Francis Escudero, for his part, is asking for information on the costs that the government and taxpayers will incur. Speaker Feliciano Belmonte Jr. has given assurance that Congress would not grant blanket emergency powers to the President, noting that the letter submitted by Malacañang did not contain enough details.

House Majority Leader Neptali Gonzales II said the request would be subjected to “a fine-tooth-comb scrutiny” to make sure that there is a credible basis for the grant of emergency powers.

He said the DOE should also look into other options instead of making taxpayers shoulder billions for additional power.

According to Gonzales, the proposed emergency powers may face rough sailing in the House.

He said many of his colleagues want the DOE to explore other options of dealing with the electricity shortage projected to last for only three months next year, instead of making people pay billions for additional power.

Gonzales said he and Speaker Belmonte have been informed that requiring malls and other big business establishments to use their generators in exchange for some incentives would free up about 1,000 megawatts (MW) that would be available to household users during next year’s summer months.

“Aside from this, we were told that there is an additional 125 MW that Petron Corp. can provide, plus 100 MW more from a natural gas plant that is scheduled to start operating before yearend. We can also resort to energy conservation measures,” he said.

“Clearly, there are alternatives other than making consumers pay billions,” he said.

However, Gonzales lamented that Secretary Petilla appears fixated on contracting additional power from foreign suppliers.

Albano, who belongs to the minority bloc and is a former executive director of the Joint Congressional Power Commission (JCPC), frowned upon DOE’s proposal to rent modular power plants from foreign contractors for P6 billion for two years to deal with a shortage forecast to last only for three months.

“Why should we make people pay P6 billion for three months, or P2 billion a month? Secretary Petilla will have a hard time justifying that proposition. I agree that we should explore other alternatives,” he said.

He said the DOE proposal is similar to the take-or-pay feature of supply contracts entered into by the Ramos administration and which resulted in higher electricity rates.

For his part, Cagayan de Oro City Rep. Rufus Rodriguez, who sits in the JCPC, faulted Petilla for recommending emergency powers only now that Luzon is projected to have a shortage in mid-2015.

“Mindanao has been experiencing real lack of electricity for the past two years as evidenced by continuous four to 10 hours of rotating brownouts all over Mindanao, which stunt its economic growth. Yet he did not recommend emergency powers to solve the energy crisis in Mindanao. Are we in Mindanao second class citizens?” he asked –Jess Diaz, Alexis Romero source

What gives? Chiz asks Palace on extra power

Manila Standard Today
By Macon Ramos-Araneta | Sep. 22, 2014 at 12:01am

SENATOR Francis Escudero on Sunday asked the Palace to attach a price tag to the emergency powers that it is seeking for President Benigno Aquino III to cope with a looming shortage of electricity in 2015.

“What’s the cost to taxpayers of this measure?” Escudero, chairman of the Senate finance committee, asked.

Escudero said the power the government is seeking is “basically the authority to enter into purchase agreements with private power producers.”

“Even if power contracted by the government will eventually be sold to distributors, and thus the acquisition cost will be recouped, we still would like to know the costs involved” Escudero said.

“How will it be financed? Even if it’s an off-budget transaction, the government has the duty to publicly disclose the details,” he said.

Escudero said full disclosure was required, particularly if contracted power must still be paid for, even if it is not used.

“What is the burden of this to the consumers? Will it entail additional costs to us? If it’s through the electric bill of consumers then government should tell them in advance,” he said.

If the National Grid will loan or advance it or if it will be taken from the Malampaya royalty, it should be revealed,” he said

Escudero was referring to the government share of the Malampaya natural gas field, which next year will reach P34.5 billion, according to 2015 national budget.

If government will tap Malampaya as the “fuel for emergency powers, then it should tell us how it will be done and the amount involved,” Escudero said.

He said a “powerful light” must shine on these contracts “in the interest of transparency and to prevent a repeat of the country’s experience during the energy crunch of 1990s when power contracted later burdened consumers.”

He noted that the stranded costs” in the billions of pesos were still being collected from consumers through their monthly electric bills.

President Aquino has sought a joint congressional resolution which would authorize the government to order additional generating capacity of about 600 megawatts.

This would go to meeting the projected baseload deficit of 300 megawatts and act as a 300-megawatt buffer that is equivalent to 4 percent of peak demand.

In a report to Congress, Energy officials forecast an energy shortage in Luzon at 400 MW to 1,000 MW during the first half of next year.

To plug this gap, Energy Secretary Jericho Petilla convinced the President to invoke Section 71 of the Electric Power Industry Reform Act (Epira) of 2001which allows the government to contract additional generating capacity under terms and conditions Congress may approve.

Escudero said he favors the grant of such power given the “bleak power outlook” for next year.

The Energy Department warned there will be some days of April and May 2015 when the power deficit will reach 300 megawatts.

This will be exacerbated by scheduled maintenance shutdown of the Malampaya natural gas facility in offshore Palawan from March 15 to April 14 next year.

The senator said even without maintenance issues, the country needs to commission more plants because any growth in the economy triggers a corresponding hike in the demand for electricity. source

Sunday, September 21, 2014

NGCP restores power; Benguet suffers from power outage

Sunstar Pangasinan
Sunday, September 21, 2014

THE Pangasinan area has been re-energized by the National Grid Corporation of the Philippines (NGCP) early Saturday afternoon.

In a statement posted on Twitter on Saturday, the NGCP said the Pangasinan Electric Cooperatives Inc. and the Cenpelco Inc. had its power back due to the restoration of the Labrador-Bani-Bolinao 69 kilovolts (kVs) line.

The identified line has been non-operational Friday due to the devastation caused by Typhoon Mario (Fung-Wong).

Specifically, the customers that have been re-energized are the residents of Labrador, Sual, Alaminos, Mabini, Burgos, Dasol, Infanta, Agno, Bani, and Bolinao.

On the other hand, the NGCP reported that the Benguet Electric Cooperatives Inc. (Beneco) has been powerless Saturday, which was the effect of the line tripping of the La Trinidad-Bulalacao 69 kVs line.

Consequently, the entire Mountain Province has been on a power outage, along with Beneco's Atok and Mankayan Substations.

The 69 kV line is the smallest transmission line that powers the households. (PNA) source

4 foreign firms bid to supply generators

Manila Standard Today
By Alena Mae S. Flores | Sep. 21, 2014 at 11:20pm

Power Sector Assets and Liabilities Management Corp. said over the weekend it is evaluating proposals from at least four foreign companies to supply the generator sets needed to cover the projected shortfall of 300 megawatts during the dry months of 2015.

“PSALM is not yet negotiating. We are at the stage of accepting and evaluating proposals sent to PSALM/DoE in case Congress grants the request [to invoke Section 71 of the Electric Power Industry Reform Act]. These are around four foreign companies,” PSALM president Emmanuel Ledesma Jr. said. He did not identify the interested suppliers.

Ledesma said PSALM must secure 300 MW of gas or diesel generator sets to meet the requirement for the peak period of March to May next year.

“Factors to consider include comparative cost [rental/purchase], delivery time, minimum operations and maintenance contract period required, as well as availability of fuel,” Ledesma said.

“We will be meeting with [Senator] Serge Osmeña. He agreed to it [emergency powers]. When we’re ready with additional info and updates, we will meet with him. We are talking to about four or five suppliers. Time is of the essence,” he said.

The move came after the Energy Department warned of longer power outages next year. Energy Secretary Carlos Jericho Petilla said the anticipated power shortage could reach up to 800 MW from the projected 600 MW due to the El Niño weather phenomenom.

Petilla earlier asked PSALM to initiate talks with power generators with available capacity for contracting to prevent power outages.

“PSALM should have offers as we are redirecting these offers to them,” Petilla said. source

New 82-MW Cebu coal plant boosts Visayas power supply

Manila Times
September 21, 2014 10:59 pm

THE Visayas region may yet be spared from a looming power crisis expected to hit the country in 2015 after a new 82-megawatt (MW) coal-fired power plant went on stream in Toledo City, Cebu.
Global Business Power Corp. (GBP) switched on last Friday the P10.2-billion expansion project of subsidiary Toledo Power Corp. (TPC) to augment supply from the firm’s existing 60-MW coal-fired and 40-MW diesel-fired plants serving the region.
Other power firms like Aboitiz Power and Vivant Energy Corp. also have power projects in Cebu.
TPC’s 82-MW expansion project will help ease the power situation in the Visayas grid and will serve the requirements of major industries in Western Cebu, including the power needs of Balamban Enerzone and Cebu Electric Cooperative (CEBECO) III.
GBP chairman Francisco Sebastian said the expansion project was completed three months ahead of schedule as a reaffirmation of GBP’s commitment to the growth and development of the Visayas and in response to the government’s call for more power supply to avert the looming energy crisis in 2015.
“The immediate completion of the expansion project is a validation of effective private-public partnerships, working for the common goal of building a progressive nation,” added Sebastian.
“GBP had originally intended for the new 82-MW plant to replace its existing coal facility with the latest clean coal technology,” said Jaime Azurin, GBP executive vice president.
“Out of the need for more power supply, however, we are refurbishing TPC’s existing coal-fired plant to increase its capacity to 62 MW to serve as additional bridging power source for the projected energy requirements for next year’s summer season and in time for the APEC [Asia Pacific Economic Cooperation] meeting,” Azurin said.
The new plant will also supply the power requirements of Carmen Copper Corp.’s mining expansion projects, beginning December 26, 2014. Carmen Copper is a subsidiary of Atlas Consolidated Mining and Development Corp.
Five decades after the establishment of TPC, it will once again supply the power requirements of Atlas through Carmen Copper. TPC was initially built to power the Atlas mines in the 1960s until the mines closed in the 1990s.
At the ceremonial switching, GBP and TPC officials were joined by Cebu Vice Governor Agnes Magpale, Toledo City Mayor John Henry Osmeña, and Department of Energy (DOE) Undersecretary Raul B. Aguilos.
Aguilos, who represented Secretary Jericho Petilla who could not make it due to a DOE budget hearing, welcomed the synchronization of Toledo Power’s 1A Expansion Project to the grid in Toledo City.
The additional capacity will augment the energy supply in the southern portion of the province and the rest of the Visayas, and will directly benefit industrial power consumers in Cebu.
He mentioned the looming power crisis in Luzon and Mindanao in 2015 that needs to be urgently addressed and emphasized the importance of energy in sustaining the region’s economic growth.
GBP is one of the leading independent power producers in the Visayas. Its power plants are strategically built where high growth is expected. These power facilities are located in Cebu, Iloilo, Aklan, and Mindoro.
The company has an ongoing 150-MW expansion project in Iloilo City through subsidiary, Panay Energy Development Corp. The project broke ground last March 2014 and will be operational by June 2016.
Panay Energy’s 150-MW expansion project can serve the power requirements of the entire Visayas region, including Panay, Boracay, Negros, Cebu, and Leyte, at a rate of P5.05 per kwH for long-term supply agreements.
GBP is a member of the GT Capital Group of Companies of which Metrobank is the flagship company.   source

EPI’s $185-M geothermal plant goes on stream in 2016

Manila Times
September 21, 2014 10:58 pm

THE $185-million geothermal power plant project of Emerging Power Inc. (EPI) in Naujan, Oriental Mindoro is scheduled to be operational in the third quarter of 2016.
EPI chairperson Martin Antonio Zamora said the plant will supply an additional 40 megawatts (MW) of power to the whole island of Mindoro.
“EPI is committed to support the government’s effort to fast-track the construction and completion of more power plants— especially renewable power plants—to address the anticipated power crisis in the coming years,” Zamora said in a statement.
The Mindoro geothermal project is being built on a multi-use zone that straddles the barangays of Montelago, Montemayor and Melgar-B in the municipality of Naujan.
Within four years, the geothermal project is expected to result in as much as P2.1 billion in savings (or by 40 percent from P11 per kilowatt-hour to P6.58 per kWh) in electricity bills for the people of Mindoro.
Zamora said the geothermal project will help stabilize power supply and bring down electricity costs in the island-province, which is currently dependent on bunker fuel for its power generation.
He said that the high costs of diesel and bunker fuel have been jacking up the cost of electricity in Mindoro and all over the Philippines’ main power grids, and this will likely go on for many years.
Similarly, the Small Power Utilities Group in off-grid islands, which is 95 percent dependent on diesel and bunker-generated electricity, has seen relatively high power generation costs.
The Mindoro project will also help spawn downstream industries like aquaculture and eco-tourism. Thus, it will boost local employment.
As a renewable energy developer, EPI has received a package of tax incentives from the Board of Investments (BOI).
The BOI’s grant of incentives to EPI is seen as an indication of the Aquino administration’s resolve to speed up the establishment of more renewable energy facilities to head off an anticipated nationwide power crisis in the summer of 2015.
“We thank the BOI for granting EPI the tax incentives without undue delay,” said Zamora.
With strong support from the BOI and the Department of Environment and Natural Resources, which already gave EPI the green light to proceed with the project, Zamora expressed confidence that the company would also be able to secure the go signal from the Energy Regulatory Commission and from other government agencies.
The BOI incentives include income tax holiday for seven years, duty-free importation of renewable energy machinery, materials and equipment; cash incentive of renewable energy developers for missionary electrification; and tax credit on domestic capital equipment and services, among others.
The BOI perks are given to encourage local and foreign companies to put up renewable power facilities under Republic Act 9513 or the Renewable Energy Act of 2008.
Energy Secretary Carlos Jericho Petilla earlier welcomed the entry of EPI’s geothermal project in Mindoro’s energy mix, saying that “geothermal is a big step towards realizing our dream of sustained and affordable electricity.”
House energy committee chair Rep. Rey Umali also commended EPI, saying, “The Mindoro geothermal project is the embodiment of the promise of Epira for the Philippines to have reliable, sustainable, renewable, and affordable energy.”
EPI, which is responsible for the exploration and development of the geothermal project, has tapped the expertise of Geo-Survey Institute of Iceland and the geothermal department of the Institut Teknologi Bandung of Indonesia to carry out the renewable energy project. source

Securing additional 180-MW supply buffer

Manila Bulletin
September 21, 2014

Meanwhile, Reyes said the power utility giant is securing additional 180 megawatts into its supply portfolio as it takes proactive measures to spare its customers from rolling brownouts during the critical summer months next year.

Reyes said they are currently in discussion with three prospective power suppliers to beef up their contracted capacity.

The additional power sources are expected come from Millenium Holdings for the 100-MW capacity of its Navotas land-based gas turbine power facility; a 20MW prospective capacity addition from the interconnection of the Botocan facility; and additional 60MW being offered by JG Summit Holdings of the Gokongwei group.

“We are in talks with Millenium for the rehab of their Navotas plant. We are also looking at the interconnection of Botocan plant and that should add 20MW…we are also discussing with JG Summit that could potentially give 60MW,” said the Meralco chief executive, who stressed these sources should provide additional 180MW buffer supply.

Reyes said that shoring up their supply for the brownout-ridden summer months next year is manageable given all the potential capacity they can secure to meet growth in demand.

“Everyone which has the potential to provide additional capacity, we are in discussion with them,” he stressed.

Other parties they have been negotiating with are the potential providers via the government-sanctioned interruptible load program or ILP.

Meralco has cornered the participation of some ILP participants for roughly 140MW capacity, but in previous incidence of power outages, it was noted that the capacity extraction had just been normally half of it, thus, the need for heftier supply buffer.

The company has also been extending the interim power supply agreements (IPSAs) it earlier entered into with various power generators. The availability of some capacities had been previously constrained by lag in regulatory approvals though.

Meralco has been working on these supply reinforcement measures outside the purview of the Section 71 or the so-called government intervention on solutions via the declaration of power crisis as enshrined under the Electric Power Industry Reform Act.

Further, Reyes noted that Meralco will “similarly step up its communication advocacy to encourage people into energy conservation and efficiency in demand management, because every 1.0-percent reduction in power use with energy efficiency could translate to about 60MW reduction in demand.” (MMV) source

Meralco sees sales turnaround in 2015

Manila Bulletin
by Myrna Velasco
September 21, 2014

Amid threats of rotating power outages, mammoth power utility firm Manila Electric Company (Meralco) is optimistic of boosting its energy sales to 4.0-4.5 percent in 2015, a turnaround from this year’s slower 3.0 percent growth, on corresponding growth in demand.

“We are looking at a growth in demand of 4.0 to 4.5-percent next year,” Meralco president and chief executive officer Oscar S.Reyes has noted. Reyes said the growth forecast corresponds to its projected growth in demand.

He added that it will be some sort of turnaround from this year’s tamed sales growth of just 3.0-percent due to convergence of factors that had slowed down demand.

“Because this year, there have been events that had tempered demand … in addition we had comparatively cold summer and then we had the effects of Typhoon Glenda,” Reyes stressed.

From the setbacks it encountered in year 2013 on the pricing front as well as on social perception, Meralco has been reinforcing its contingency measures so it can keep pace with customer expectations for better service delivery and more acceptable cost impacts.

The major challenge to its load network and onward to meeting customers’ needs, according to the utility firm, had been anticipated generation deficiency due to the increasing frequency of outages in power plants.

These factors, the company added, have been “exerting pressure both on the availability of supply as well as on price.”

Reyes has reiterated that “the insufficient generating capacity and reserves required to serve a growing electricity market in the Luzon grid have been exacerbated by the reduced availability of the existing power plants and relatively higher frequency of forced outages of power plant units of varying durations.”

The utility firm itself has logged 21 incidences of power plant forced outages in November-December last year, a monumental period for the energy sector because that was also the time when the Malampaya platform, the country’s major source of gas supply for its power plants, had been on maintenance shutdown.

The behemoth power distribution firm has long been programming investments for it to become part of the country’s power supply solution. However, challenges up to judicial interventions, have snagged implementation timelines on its proposed power projects.

Meralco chairman Manuel V. Pangilinan similarly asserted previously that “the lack of reliable generating capacity to meet growing demand, which has become more evident since November 2013, remains to be the major challenge to power supply and pricing stability.” source

Saturday, September 20, 2014

Global Power switches on P10.2-B Toledo power plant

By Iris C. Gonzales and Ted P. Torres 
(The Philippine Star) | Updated September 20, 2014 - 12:00am

MANILA, Philippines - Global Business Power Corp., the power generation unit of Ty-led conglomerate GT Capital Holdings, switched on yesterday the 82-megawatt coal-fired power plant of its subsidiary Toledo Power Corp. (TPC) in Toledo City, Cebu.

Global Power chairman Francisco Sebastian said the project is a reaffirmation of the company’s commitment to support the growth and development of the Visayas region and a response to government’s call for more power supply to avert a looming energy crisis next year.

“Immediate completion of the expansion project is a validation of effective private-public partnerships, working for a common goal of building a progressive nation,” he said.

The project, which broke ground in 2012, is a P10.2-billion investment that will also supply the power requirements of Carmen Copper Corp.’s mining projects starting December 2014.

Carmen Copper is a subsidiary of Atlas Consolidated Mining and Development Corp.

“Five decades after the establishment of TPC, it will once again supply the power requirement of the Atlas mines through Carmen Copper Corp. TPC was initially built to power the Atlas mines in the 1960s until its closure in 1990s,” the company said.

The plant is also eyeing to provide the power requirements of major industries in Western Cebu like those in the Balamban Enerzone.

The 82-MW expansion project is an addition to TPC’s existing 60-MW coal-fired and 40-MW diesel-fired plants.

“Global Power had originally intended the new 82-MW plant to replace its existing coal facility with the latest clean coal technology,” said Global Power executive vice president Jaime Azurin.

Furthermore, he said TPC is refurbishing its existing coal-fired plant to increase its capacity to 62 MW to serve as additionalbridging power source for the projected energy requirements for next year’s summer season and the Asia Pacific Economic Cooperation (APEC) meeting.

Global Power is one of the leading independent power producers in the Visayas. Its power plants are strategically located where high growth is expected, with power facilities located in Cebu, Iloilo, Aklan and Mindoro.

The company is a power conglomerate composed of Cebu Energy Development Corp., Panay Power Corp., Panay Energy Development Corp., GBH Power Resources and TPC.

It is a major unit of holding firm GT Capital, along with Metropolitan Bank & Trust Co. (Metrobank), Toyota Motor Philippines, Federal Land Inc., First Metro Investment Co., AXA Philippine Life Insurance Corp. and Charter Ping An Insurance Corp. source

ERC lays groundwork for permanent price cap at WESM

By Iris C. Gonzales (The Philippine Star) | Updated September 20, 2014 - 12:00am

MANILA, Philippines - The Energy Regulatory Commission (ERC) is laying the groundwork to put in place a permanent mitigating measure at the Wholesale Electricity Spot Market (WESM), the country’s trading floor for electricity.

In an interview, ERC executive director Saturnino Juan said the power regulator has already scheduled public consultations for a permanent mitigating measure, which could be a permanent price cap at the spot market.

“We will have the consultations on Sep. 29,” Juan said.

“All parties who have filed their proposal and comments would be given an opportunity to discuss and elaborate on their proposed measures during the above-scheduled public consultation,” the ERC said in a separate notice.

Juan also said that if there is a need for more consultations, the ERC can schedule additional meetings.

The consultations would help determine whether or not the secondary price ceiling in the electricity spot market implemented by the ERC would become permanent or another permanent measure would be put in place.

The interim price cap has helped cushion consumers from possible power rate hikes.

The price cap is the highest offer that sellers can give when they sell their electricity to the market. Power suppliers with the lowest price get to supply the requirements of distribution utilities but the last offer is the one that sets the price for which they will be paid.

In an Aug. 5 resolution, the ERC extended the measure for 120 days starting Aug. 10 or until a more permanent solution is put in place.

The ERC first imposed the price cap of P6.245 per kilowatt-hour (kwh) in May effective until June 26 but extended this to August 9.

In its Aug. 5 resolution, the ERC said it had to extend the secondary price cap because it still needs to evaluate the alternative mechanisms proposed by generation companies.

“The alternative mechanisms submitted by the stakeholders necessitate further study to complete the process of finally establishing a permanent measure which could be applied in the WESM and thus the ERC found the need to extend the implementation of the current secondary cap mechanism,” it said.

The interim measure was put in place to mitigate sustained high prices in the WESM during the May and June 2014 supply months.

The Philippine Independent Power Producers Association (PIPPA) has said the ERC resolution should be struck down as unconstitutional, invalid and illegal.

However, Manila Electric Co. (Meralco), the country’s biggest power distributor, said the adoption of the WESM secondary cap mechanism was instrumental in shielding customers from high market prices due to multiple and sustained power plant outages.

“As can be observed, the outages of power plants have been increasing in frequency and duration and there is no clear indication of their reduction. It is during such periods of persistent tight supply that the secondary cap mechanism is activated and consumers are benefited by shielding them from high WESM prices due to prolonged periods of capacity on outage,” it said.

It added that a permanent secondary cap would continue to shield the consumers from sustained high market prices due to the expected tight supply situation and frequent plant outages. source

DOE still exploring ‘procurement options’ for emergency powers

Manila Bulletin
by Myrna Velasco
September 20, 2014

Malacañang will likely secure the “emergency powers” it has been seeking from Congress, but as to how it will be employed to solve next year’s power supply crisis remains the “biggest puzzle” to the power industry and even to the Department of Energy.

When asked on the sidelines of the switch-on ceremony of the expanded Toledo power plant in Cebu, Energy Undersecretary Raul B. Aguilos admitted that “the procurement plans are still under study.”

He added “we are evaluating all possible options,” noting that even the proposal of bringing in the generating sets used during the Beijing Olympics is something that is not concrete at this point.

Aguilos explained that while President Aquino’s letter to Congress did not categorically state a “power crisis situation,” the energy department banked more on a condition of “imminent power supply shortage.”

The power supply situation in the Luzon grid is seen worst during the summer months – March to May – and this is the period that Energy Secretary Carlos Jericho Petilla has been batting for to be covered by the Section 71 mandate of the Electric Power Industry Reform Act.

However, the variations in pronouncements of the energy chief have been raising some doubts as to “how the emergency powers will be exercised.”

Primarily, Petilla indicated that he will need additional capacity procurement of 300MW under the purview of Section 71, but later on, he wanted that buffered with additional 300MW – or for a total of 600MW.

The energy department is similarly raising mild El Niño phenomenon next year, hence, the supply required under the emergency powers may go up even higher to 800MW.

There are still no clear declarations also how the funding will be sourced or how much impact it will eventually have on the Filipino consumers.

Preliminary proposals will be to use the Malampaya fund – and the two-year coverage of the emergency powers as propounded may require subsidy of up to P6.0 billion. source

Friday, September 19, 2014

82-MW Cebu power plant switched on

By MST Business | Sep. 19, 2014 at 11:20pm

Global Business Power Corp. switched on Friday the newly-built 82-megawatt coal-fired power plant of subsidiary Toledo Power Corp. in Barangay Daanlungsod in Toledo City, Cebu.

“Toledo Power wasted no time in completing the expansion project three months ahead of schedule,” said GBP chairman Francisco Sebastian.

“Immediate completion of the expansion project is a validation of effective private-public partnerships, working for a common goal of building a progressive nation,” he said.

The expansion project, worth P10.2 billion and using circulating fluidized bed technology, broke ground in November 2012.

The new plant will supply the power requirements of Carmen Copper Corp.’s mining expansion projects, beginning Dec. 26, 2014. Carmen Copper is a subsidiary of Atlas Consolidated Mining and Development Corp.

Five decades after the establishment of TPC, it will once again supply the power requirement of the Atlas mines through Carmen Copper Corp. TPC was initially built to power the Atlas mines in the 1960s until its closure in the 1990s.

Aside from Carmen Copper, the expansion project can also help ease the power situation in the Visayas grid and serve power requirements of major industries in Western Cebu such as Balamban Enerzone and CEBECO III.

The 82-MW expansion project is an addition to Toledo Power’s existing 60-MW coal-fired and 40-MW diesel-fired plants.

“GBP had originally intended the new 82-MW plant to replace its existing coal facility with the latest clean coal technology,” said GBP executive vice president Jaime Azurin.

“Out of the need for more power supply, however, we are even refurbishing TPC’s existing coal-fired plant to increase its capacity to 62-MW to serve as additional bridging power source for the projected energy requirements for next year’s summer season and APEC meeting,” Azurin said.

GBP, a member of the Metrobank Group of Companies, is one of the leading independent power producers in the Visayas. Its power plants are strategically located where high growth is expected, with power facilities located in Cebu, Iloilo, Aklan, and Mindoro.

The company has an ongoing 150-MW expansion project in Iloilo City through subsidiary, Panay Energy Development Corp. A groundbreaking ceremony was held on March 2014 and operation is targeted by June 2016.

Panay Energy’s 150-MW expansion project can serve power requirements in the entire Visayas region, including Panay, Boracay, Negros, Cebu, and Leyte, at a rate of P5.05 per kwH for long-term supply agreements. source

Power shortage no bar to ore-export ban—solon

Manila Standard Today
By Bloomberg, Norman P. Aquino | Sep. 19, 2014 at 11:15pm

The Philippines can build the electricity capacity needed to process minerals domestically if a ban on ore exports by 2021 is enforced, according to a lawmaker proposing the bill to congress.

The country, the world’s third-biggest producer of nickel in 2013 according to Morgan Stanley, can proceed with the plan without first establishing the infrastructure needed to build and operate local refineries, Congressman Ping Amante said.

“It’s a chicken-and-egg situation,” Amante said in an interview at his office in Manila on Sept. 17.

“Who in his right mind will build an expensive power plant if no one will use it? New metals facilities will create demand for more electricity generation,” he said.

Amante’s bill, aimed at getting more value from natural resources by promoting domestic processing, mirrors a similar move by Indonesia that went into effect this year and sent nickel prices to the highest since 2012.

The Philippines overtook its neighbor as the biggest supplier of the ore to China this year, accounting for 61 percent of shipments, according to customs data. Support for the bill is growing and more than 20 congressmen have expressed interest in being co- authors, Amante said.

The country must build power-generation capacity and infrastructure as well as other incentives before banning exports, Environment Secretary Ramon Paje said Sept. 10 in comments echoed by Mines and Geosciences Bureau director Leo Jasareno. source

New plant opens in Toledo

Manila Times
By Jeandie O. Galolo
Friday, September 19, 2014

METROBANK’S power generating arm, Global Business Power Corp., switched on yesterday the extension of the 60-megawatt coal plant of its subsidiary Toledo Power Corp. in Toledo City.

GBP Chairman Francisco Sebastian said the P10.2-billion new plant, TPC1-A, will supply the power requirements of Carmen Copper Corp.’s mining expansion projects starting on Dec. 26 this year.

The 82-mw coal-fired power plant was completed three months ahead of schedule.

Executive Vice President Jaime Azurin said that the company has entered into a 15-to-20-year supply contract with Carmen Copper.

Carmen Copper is a subsidiary of Atlas Consolidated Mining and Development Corp., which used to run the Toledo Power Corp. (TPC). Five decades after the establishment of TPC, the plant will once again supply the power requirements of Atlas, through Carmen Copper.

In addition, power distribution company Cebu Electric Cooperative III will get 17 mw out of the 72 mw saleable supply.

“GBP had originally intended the new 82-mw plant to replace its existing coal facility with the latest clean technology. Out of the need for more power supply, however, we are refurbishing TPC’s existing coal-fired plant to increase to 62 mw and serve as additional bridging power source,” Azurin said.

The existing 60-mw plant or TPC 1 has been running for 35 years already. GBP will spend P400 million for its rehabilitation.

Azurin said it will take four months to rehabilitate the existing plant, a process they hope to complete before next year’s summer months.

With GBP’s TPC1-A and the coming of the 300-mw Therma Visayas Inc. of Aboitiz Power, Toledo City Mayor John Henry R. Osmena said Toledo will be generating a thousand mw in the next three years.

“Toledo is the power capital of Central Visayas…We are experiencing a unique luxury here with the power and mining (businesses) that we have,” he said.

The Cebu Energy Development Corp. in Toledo City, a consortium of GBP, Aboitiz Power and Vivant Energy Corp., operates a 246-mw coal-fired power plant.

GBP is also operating a 40-mw diesel-fired power plant in Carmen, Toledo.

GBP’s other power facilities are located in Iloilo, Aklan and Mindoro. At present, the company has an ongoing 150-mw expansion project in Iloilo City through its subsidiary Panay Energy Development Corp., which is expected to go online in 2016.

That expansion project can serve power requirements in the entire Visayas, including Panay, Boracay, Negros, Cebu and Leyte, at a rate of P5.05 per kwH for long-term supply agreements.

Sebastian noted that the Visayas has a better power situation compared to Luzon and Mindanao due to the number of new power plants scheduled to operate in the next few years.

President Benigno Aquino III has asked the House of Representatives to grant him emergency powers to deal with the looming power crisis in 2015, invoking the Electric Power Industry Reform Act. Section 71 states that the President, “upon determination of an imminent shortage of supply of electricity, may ask Conress for authority through a joint resolution, to establish additional generating capacity.” source