Business group cites urgency of building more power plants

Business World Online

Posted on 10:06 PM, November 30, 2010

THE COUNTRY’S biggest business group yesterday warned that power supply will have to be increased if the economy is to sustain growth.

The Philippine Chamber of Commerce and Industry (PCCI), in a statement, urged the government to lure in more investors while also calling owners of privatized plants to upgrade the capacity of their facilities.

The call was made after the group met with energy industry players recently, it said, without elaborating.

"A percentage of gross domestic product growth (GDP) is accompanied by a 0.68% rise in power consumption," PCCI claimed.

"To meet projections of GDP growth, investments in power generation must be in lock-step with priorities to grow the economy and attract investments," the group said.

Official GDP growth targets have been pegged at 5%-6% for 2010 and 7%-8% for 2011.

While the business group noted the Energy department’s announcement that investors have committed 2,000 megawatts in additional capacity by 2013, it went on to urge power plant owners to upgrade their facilities too.

"PCCI is urgently advocating to the new owners of generation plants in Luzon, whose capacities now stand at an aggregate of 13,319 megawatts (MW), to devote special and aggressive focus on the rehabilitation, maintenance and upgrading of their power plants," the group added.

Both the Visayas and Mindanao had borne the brunt of hours-long daily power outages at the height of the prolonged dry spell that struck in the first half. Power deficiency had hit as much as 400 MW. And while the rainy season has replenished water in long-dried-up dams that run hydroelectric plants, both island groups face the specter of an imminent repeat of the crippling power shortage unless more plants are built.

The Web site of the National Grid Corporation of the Philippines (NGCP) showed yesterday that, while Luzon had an 843-MW reserve, the Visayas and Mindanao were short by 182 MW and 12 MW, respectively.

In Eastern Visayas, for instance, businessmen have continued to grapple with uncertain power supply.

"This is a very big problem. We are producing electricity but it is expensive. And we are experiencing brownouts," Go Tic Ching, president of the Tacloban Filipino-Chinese Chamber of Commerce and Industry, Inc., said in a recent phone interview following a series of power interruptions experienced last week in Tacloban City and the rest of Eastern Visayas.

"We should be given priority before the power generated here is exported to other areas," Mr. Ching said.

Leyte geothermal plants, which have a capacity of around 700 MW, send at least 200 MW to the Cebu-Negros-Panay grid and another 200 MW to the Luzon grid.

"We have aired this concern to various agencies in the province and in the region. We were just referred to the national government agencies concerned and, up to now, we are still waiting for favorable action regarding our demand," Mr. Ching said.

Mr. Ching also lamented that power companies, including electric cooperatives, have not been able to provide an updated picture of the electricity demand-supply situation. "We constantly hear announcements on rotating outages but we need clear information particularly its cause," he said.

NGCP Information Officer Edna P. Legaspina said only that the outages were caused by scheduled maintenance work, but did not elaborate.

"How could our local economy improve if we do not have enough power supply? Businessmen from other areas would be discouraged from putting up their business in our place because they do not want additional investment such as buying power generators," Mr. Ching said.

The Leyte Chamber of Commerce and Industry, Inc. (LCCI) expressed the same concern.

Joel M. Caminade, LCCI information officer, said it was ironic that Leyte hosts the biggest geothermal field in the country and, yet, is short of power supply. -- withReyan L. Arinto in Tacloban City

Studies find Philippines a disaster waiting to happen

By Winston A. Marbella
Philippine Daily Inquirer
First Posted 01:28:00 11/30/2010

(Alternative energy)

Most Read

MANILA, Philippines—As close to 200 countries began Monday a two-week meeting in Cancun, Mexico, to try to forge an agreement to curb climate change, several international agencies warned that the Philippines remained a disaster waiting to happen—with Metro Manila possibly going under water after just a heavy downpour.
As in earlier meetings in Copenhagen, Denmark, and Bali, Indonesia, a legally binding international agreement is not expected in Cancun to put a cap on carbon emissions scientists believe to be causing global warming and worsening natural disasters. But at least a preliminary road map is expected to be drawn up to replace the aging Kyoto agreement expiring in 2012.
As 15,000 government delegates, environmentalists, business leaders and journalists gathered in the Mexican resort, the Philippine government appeared to be moving heaven and earth to avert more catastrophes from impending natural disasters in a desperate race against time in a dangerously warming planet.
On the eve of the Cancun conference, President Benigno Aquino III declared a Global Warming and Climate Change Consciousness Week, calling on the people to adjust their lifestyles to prevent further degrading the environment as temperatures climb, ice melts, seas rise and the climate that nurtured man shifts in unpredictable ways.
Mr. Aquino also ordered the scrapping of the P18.7-billion Laguna Lake rehabilitation project in order to include additional features to remove centuries-old silt, save the watershed, install global positioning mapping, relocate illegal settlers, and provide livelihood programs for displaced fishermen.
The President’s order came not a day too soon: Some 70,000 fishermen live in 170 coastal villages around the lake area covering 90,000 hectares.
A triple-agency international study has found Metro Manila, together with three other Asian coastal megacities, in grave danger of killer floods that could devastate them anytime now unless steps are taken fast. An average of 20 typhoons strikes the country yearly.
The government-run Laguna Lake Development Authority (LLDA) issued a similar warning after Typhoon “Ondoy” (international name: Ketsana) unleashed killer floods a year ago that kept parts of Metro Manila underwater for many months.
The state-owned water regulatory agency, Metropolitan Waterworks and Sewerage System (MWSS), has reported that many more parts of Metro Manila have slid below sea level because of sinking water tables. It said massive siltation had also greatly reduced the Pasig River’s capacity to drain floodwaters into Manila Bay, threatening to swamp the capital after even just a heavy thunderstorm.
An Asian-focused US think tank, Pacific Strategies and Assessments, recently accused the Aquino administration of underestimating the threat of natural disasters on the “most vulnerable” part of the country—Metro Manila—and overestimating government preparedness to cope with natural disasters like typhoons, floods and earthquakes in many parts of the country.
A series of international conferences over the past two years—in Bali, Indonesia, in 2008, Copenhagen, Denmark, in 2009, and now in Cancun—is expected to produce scant progress in reaching an enforceable agreement to cut pollution by the world’s leading industrial economies, notably China, India, the European Community, and the United States.
Silver lining
Happily, the gathering storm clouds have produced a silver lining: Filipino scientists are close to finding a breakthrough solution to environmental problems caused by fossil fuel. They are growing a species of algae suitable to large-scale biofuel production, an alternative energy source discussed in a new documentary film.
The film, “Cool It,” is heating up the global warming controversy first raised by the documentary “An Inconvenient Truth” and a disturbing UN report warning of imminent environmental disasters caused by climate change.
The earlier documentary won an Academy Award that catapulted former US Vice President Al Gore to the world stage and a new career as environmentalist. For their work in raising global-warming awareness, Gore shared a Nobel Peace Prize with the UN Intergovernmental Panel on Climate Change.
Skeptical
“Cool It” is making enough waves to rock the boat carrying Gore’s brand of environmental activists. The film questions the scientific bases of the climate change effects predicted by Gore and some 2,500 scientists comprising the UN panel.
“Cool It” is based on lectures and a book of the same title by Bjorn Lomborg, controversial author of “The Skeptical Environmentalist.” Lomborg founded the Copenhagen Consensus Center, a think tank that puts forward the views of the world’s leading economists on major global problems.
The award-winning filmmaker, Ondi Timoner, traveled the warming globe together with Lomborg to document climate change and find the most practical solutions to environmental problems.
Scare tactics
Lomborg says that Gore “oversold the message” of climate change and that Gore’s film was designed to scare people “witless.” He says it “works very well as a scary way to get everyone’s attention” but is an “incredibly poor way to make good decisions” about climate solutions.
Lomborg does not deny climate change but questions the scientific bases of the UN panel’s predicted environmental consequences. He also contests the cost effectiveness of proposed ways to fight global warming.
“There’s a lot of amazing ideas,” says Lomborg. “Solar and wind, of course, but we also look at growing your own oil fields through algae in the ocean, making artificial photosynthesis …”
Lomborg says current efforts to cut carbon emissions would reduce global temperatures only minimally, while much lower amounts spent for research could radically cut the costs of improving existing alternative energysources and developing new ones.
Breakthrough
In one such effort, Philippine scientists have identified a species of algae capable of producing commercial quantities of oil for fuel.
Teresita Perez, chair of Ateneo de Manila University’s Department of Environmental Science, has isolated species of algae that can yield 40 to 50 percent oil when grown in a medium containing nutrients that increase production.
The Ateneo scientists are looking at growing algae without using chemical fertilizers. They are experimenting with chicken manure, hog waste, and even fresh water lakes as alternative growth media.
Zero emissions
To preserve the environment, the researchers are testing a closed carbon-loop method to grow the algae, meaning the carbon dioxide by-product of aerobic decomposition is fed back to enrich the growth medium, thus avoiding releasing CO2 into the atmosphere.
After the oil is extracted, the algae become a rich source of protein and carbohydrates for feeding fish and livestock, completing the cycle.
An advantage of producing fuel oil from algae is that the process does not displace croplands that are better used for growing food like corn, soybean and sugar cane, thus keeping prices stable. Algae are 150 times more efficient than soybean in using arable land.
Boeing, the airplane manufacturer, estimates that growing enough soybeans to supply the fuel needs of the aviation industry for a year would require fields as big as Europe, but algae would need only 30,500 square kilometers of ponds, the size of Belgium.
Disaster-prone
The World Bank joint study released recently found Metro Manila—together with Asia’s biggest megacities, Bangkok and Ho Chi Minh City—in grave danger of natural calamities triggered by climate change.
The country is already suffering the quadruple-whammy effects of global warming identified by UN climate scientists: rising sea levels, floods triggered by killer typhoons, dwindling drinking water supplies induced by drought, and shrinking food crops from parched agricultural lands.
A one-meter rise in sea level resulting from melting polar ice caps could put 64 of the country’s 81 provinces—a full 80 percent—in harm’s way, according to the environmental group Greenpeace.
That’s equivalent to 700 million square meters of coastal lands covering half of the country’s 1,610 municipalities, where half of the population depends on seafood as the main source of protein.
In 2006 alone, 3 million Filipinos were directly affected by natural disasters, according to the nongovernment Citizen Disaster Response Center. The number is expected to rise with rising temperatures and sea levels.
Waiting to happen
A World Bank study done after Typhoons “Ondoy” and “Pepeng” (Parma) struck last year, titled “Post Disaster Needs Assessment,” recommended “immediate changes in land-use planning, housing, water management, and environmental protection.”
Another World Bank study, done with the Asian Development Bank and the Japan International Cooperation Agency, titled “Climate Risks and Adaptation in Asian Coastal Megacities,” warned of climate-induced disasters in Metro Manila unless major steps were taken fast.
The study recommended constructing the Marikina Dam and embankments in the Pasig-Marikina river basin, and improving two major pumping stations serving Metro Manila, located beside the Manggahan River and in the Camanava area (Caloocan, Malabon, Navotas and Valenzuela).
Manila sinking
After Ondoy struck, the LLDA disclosed that the lake’s capacity to hold floodwaters had been cut drastically by silt dumped by 24 river tributaries from denuded watersheds.
The MWSS has disclosed that many more sections of Metro Manila have slid several feet below sea level because of sinking water tables being rapidly depleted by deep wells.
The agency also reported that massive siltation of the Pasig River has dangerously reduced its capacity to drain Metro Manila of floodwaters caused by even minor thunderstorms.
In the northern Luzon provinces devastated by Supertyphoon “Juan” (international code name: Megi) in October, the work of rebuilding broken lives and ravaged communities continues outside the peripheral vision of Manila—until the next environmental disaster strikes.
(Editor’s Note: The author is chief executive of a think tank specializing in transforming social, political, cultural and technological trends into business strategy. Comments are welcome at Marbella International Business Consultancy, e-mail mibc2006@gmail.com.

K-Water keen on other power projects in Phl

By Donnabelle L. Gatdula (The Philippine Star) Updated November 30, 2010 12:00 AM

MANILA, Philippines - Korea Water Resources Corp. (K-Water) is keen to invest in other power projects in the country despite the controversy on the Angat power project.
Gee-Hwan Park, K-Water vice president of land, energy and overseas services division, told reporters during the company’s international roadshow, that they are still eyeing to build the $300-million Kapangan hydropower generation project in Benguet.
He said they have finished the feasibility study on the proposed build-operate-transfer (BOT) project which started in 2008. He added K-Water also has other projects now in feasibility study stages such as the Pampanga province flooding control project. The feasibility study on this flood control project started in 2009.
“This project is to prevent flooding taking from the experience of Mt. Pinatubo where there were too much flooding in the province,” he said.
Another project the company is looking at is the Malinao Dam rehabilitation in Bohol.
While declining to comment on the Angat case, Park said K-Water is definitely not be closing down its business in the country.
“We are willing to wait for the proper judgment of the SC. We can extend the performance bond if necessary. We will wait and will not pull out,” he said.
Aside from existing projects, they are also looking at other renewable energy projects like wind, solar and tidal.

He said the company may also look at small hydro projects. There are no definite details yet on these RE projects.
“We do not have a specific plan yet but if opportunities arise on these areas, we will look into it. We are willing to partner with government or private entities on these RE projects,” he said. 
K-Water’s main focus is still on energy and water distribution as this is where its expertise is. 
K-Water conducted its 2nd international investment roadshow in the Philippines next to Thailand.
They are continuing with a series of roadshows in European countries in the coming months
“Conducting the international roadshow here is an indication that K-Water is still keen in continuing its business in the Philippines,” he said.
But he said up to now, the company is waiting for the decision of the Supreme Court on the Angat power plant. “We are now on the wait and see status,” he said.
K-Water won the bidding to operate the 218- MW Angat hydroelectric power facility last April 28 by submitting the highest offer of $440.8 million.
A number of civil society groups and lawmakers filed a petition with the High Court to stop PSALM from awarding the prime hydro facility of the country.
The petitioners argued that PSALM acted with grave abuse of discretion when it conducted the bidding of the Angat power plant in “secrecy and in disregard of the people’s right to information, right to water and in violation of its mandate and the Constitution.”
They sought SC’s intervention to permanently stop PSALM from disposing of the Angat plant, nullify the bidding process and issue a preliminary injunction and/or temporary restraining order.

Korean operator of Angat plant to invest more

Manila Times.net


KOREA Water Resources Corp. (K-Water) said it would pursue its investments in the Philippines despite the stalled takeover of the Angat hydroelectric power plant. 
Gee-Hwan Park, K-Water vice president for land, energy and overseas services division, said last Friday that the company is still keen on putting up its various water infrastructure projects in the Philippines.

“Conducting the international roadshow here is an indication that K-Water is still keen in continuing its business in the Philippines,” he said.

These projects include the proposed $300 million Kapangan hydropower generation project in Benguet; the flood control project in Pampanga; and the rehabilitation of the Malinao Dam in Bohol.

K-Water is engaged in the construction, operation and management of multi-purpose dams and multi-regional and local water supply systems in Korea. In particular, it oversees 15 multi-purpose dams whose functions include supplying water, controlling floods and generating electricity

In April, K-Water placed the highest bid for the 218-megawatt Angat hydroelectric power plant with an offer of $440.88 million in an auction held by state-owned Power Sector Assets and Liabilities Management Corp. (PSALM).

The Angat hydroelectric plant is a component of the Angat dam, which provides more than 90 percent of Metro Manila’s drinking water requirements.

Although the dam itself was excluded from the privatization, K-Water will be obligated to operate and maintain it at no cost to the government, which will continue to exercise regulatory powers over the release of water from the facility.

A number of civil society groups and lawmakers, however, filed a petition with the Supreme Court to stop PSALM from awarding the prime hydro facility of the country to a foreign firm.

The K-Water official said the company is willing to wait for the Supreme Court’s decision even as its performance bond with PSALM expires.

“We are willing to wait for the proper judgment of the [Supreme Court]. We can extend the performance bond if necessary. We will wait and will not pull out,” he said.

Euan Paulo C. Añonuevo

$.2-million grant to fund Oriental Mindoro hydropower study

(The Philippine Star) Updated November 30, 2010 12:00 AM

CALAPAN CITY, Philippines – The European Economic Council (EEC) is releasing a grant of $200,000 (about P8.6 million) to fund a study of the hydroelectric potentials of Oriental Mindoro.
Andy de Rossi, president of Construction Management and Consultancy (CMC)-Asia Inc., said the EEC has approved the grant for his company to explore the feasibility of putting up hydropower plants in Oriental Mindoro, in support of the “full energization” program of first district Rep. Rodolfo Valencia for the whole province.
De Rossi was here last Sunday as part of a group of Italian investors forging investment and development ties with the province prior to the construction of wind power facilities in two municipalities.
De Rossi relayed the approval of the EEC grant to Valencia and Gov. Alfonso Umali Jr. who welcomed the group, which included Jean Luigi Montossi, managing director of Italian firm Brulli Energia that will begin constructing wind power facilities in Puerto Galera and Bulalacao towns in the coming weeks.
Valencia has filed a House resolution urging the National Electrification Administration and other agencies to give priority to the full energization of the first district of Oriental Mindoro, comprising this capital city and the towns of Puerto Galera, Baco, San Teodoro, Naujan, Victoria, Socorro, and Pola.
The $200,000 grant will be handled and managed by a private sector-government team, composed of representatives of CMC-Asia, Brulli Energia, Valencia’s congressional district office and the provincial government.
De Rossi said CMC-Asia, a multinational engineering and construction company, is committed to finish structural works for the wind power project of Brulli Energia.  
The wind power project, which Valencia and Umali had planned when the latter was still a congressman of the province’s second district, will start as soon as all the required documents and permits are completed.

Montossi said the first phase of the wind power project is targeted to produce 16 to 46 megawatts, and the second phase, an additional 15 MW.
When fully operational, the wind power project, which the Italian investors said will be the “most modern and most efficient” in the Philippines, will generate up to 200 MW.

2 firms eye wind farms in Mindoro

Manila Times.net


TWO firms, including an Italian company, are keen on developing wind farms in Oriental Mindoro.

Rodolfo Valencia, representative of the first district of the province and member of the House Committee on Energy, told reporters that Brulli Energia is scouring Oriental Mindoro for potential wind projects. 
“There are Italian investors now looking at some wind power projects,” he said.

Oriental Mindoro, which is not connected to the main grid, is suffering from unstable electricity supply. The power requirements of the province is served by private producers through diesel-fired generating facilities.

Despite this, the province is awash with untapped renewable energy sources such as wind, hydro and geothermal power.
Valencia said Occidental Mindoro’s green power sources could easily provide over 200 megawatts of generating capacity.

Bruelli Energia is one of the companies seeking to take advantage of this potential. The company is conducting studies on the land foundation and soil analysis for its proposed wind projects.

Brulli Energia was a result of a merger between Energeo company, which specializes in power generation and transmission, and Brulli, a firm known for putting up civil and industrial plants.

Aside from the Italian firm, Valencia said that Philippine Hybrid Energy Systems Inc. (Phesi) is also looking at Oriental Mindoro’s potential power resources.

Phesi is a local company with pre-commercial contracts from the government to develop wind sites in Oriental Mindoro, Marinduque, Masbate and Romblon.

Euan Paulo C. Añonuevo

Italian firm eyes wind power projects in Mindoro

By Donnabelle L. Gatdula (The Philippine Star) Updated November 30, 2010 12:00 AM

MANILA, Philippines - Italian power firm Brulli Energia is planning to put up wind power projects in Oriental Mindoro, a local official said.
Rep. Rodolfo Valencia of Oriental Mindoro and a member of the house committee on energy, said Oriental Mindoro has the potential to develop more than 200 megawatts of power generated from wind, hydro, andgeothermal sources.
“The province is abundant with natural resources to explore and convert into power,” he said.
Valencia said a number of investors including Brulli are keen on exploring the potential sources of power in the province.
“There are Italian investors now looking at some wind power projects,” he said.
He said Brulli Energia is apparently in the process of conducting studies on the land foundation and soil analysis for its proposed power projects.
Valencia said the Italian power firm has informed him that they are nearing financial closure on its credit facility.
Brulli Energia was a result of a merger between Energeo company, specialized in production and transmission of electric energy, and 50-year experienced Brulli, present since 1956 in the building of civil and industrial plants.

Valencia said Philippine Hybrid Energy Systems Inc. (Phesi) is also looking at Oriental Mindoro’s potential power resources.
In 2004,the DOE also signed pre-commercial contracts with Phesi for four wind sites including Mindoro Oriental. The three other projects were in Marinduque; Baleno, Masbate; Abra de Ilog; and Tablas, Romblon.
A study made by the United States Department of Energy-National Renewable EnergyLaboratory (NREL) shows that the Philippines’ wind potential could power up to 76,000 MW.  The same study shows that 47 provinces out of 73 in the Philippines have at least 500 MW wind potential and another 25 provinces with at least 1,000 MW.
Another study conducted by the WWF shows that 1,038 wind sites in the country could generate about 7,404 MW of electricity. The WWF study identified 686 wind potential sites in 28 provinces in Luzon or equivalent to 4,900 MW. A total of 305 wind sites with a total potential of 2,168 MW can be found in Visayas. About 47 sites in Mindanao have a potential of generating 336 MW of electricity.
In 2006, Mindoro Oriental had intensified the participation of private sector for the development of the province’s energy resources.
Earlier estimates said the province would need more than P1.7 billion for power investment alone.