Monday, October 4, 2010

DOE helps Aboitiz unit forge supply contracts

By Amy R. Remo
Philippine Daily Inquirer
First Posted 01:12:00 10/04/2010

Filed Under: Energy & Resources, Contracts, Government

MANILA, Philippines—To put an end to the power outages in Mindanao, the Department of Energy has committed to help Aboitiz-owned Therma Marine Inc. (TMI) secure power supply contracts with the distribution utilities in the island for Power Barges 117 and 118.
These two barges have a combined capacity of 200 megawatts (MW) and can fill the supply gap in Mindanao, which has been suffering from rotating power interruptions lasting up to five hours in certain provinces.
Data from National Grid Corporation of the Philippines showed that in September, Mindanao’s system lacked 137 megawatts (MW), which can be covered by the two diesel-fed barges.
TMI, however, does not have a supply contract with the electric cooperatives and distribution utilities in Mindanao.
It has only managed to sign a contract with NGCP for 50 MW per barge.
According to NGCP, it has not been making full use of the power barges because of the high electricity cost.
“The high cost charged by TMI for these diesel-run power barges may be a reason why TMI is unable to secure a power supply contract with distribution utilities,” NGCP added.
Energy Secretary Jose Rene D. Almendras, meanwhile, has tasked the National Electrification Administration to help the electric cooperatives negotiate a power supply deal with TMI and other generating companies.
Aside from helping TMI secure power contracts, the DOE has also directed PNOC Exploration Corp. to study the feasibility of acquiring and rehabilitating power generation assets that have either been placed under preservation or were decommissioned, as part of the solutions being studied to increase power supply in Mindanao.
According to Almendras, these power facilities will be used in Mindanao in the short-term to help boost the generation capacity in the island, which has long been heavily dependent on cheaper, but weather dependent, hydropower sources.
Last Friday, NGCP said that the power shortage in Mindanao may last up to the end of the year.
Rex F. Corpuz, senior adviser to the president at NGCP, said the power outages were due to the fact that the actual power supply cannot meet the 4-5 percent growth in demand for energy in the island.

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