http://www.sunstar.com.ph/davao/local-news/2011/03/31/exec-admits-negligence-energy-sector-privatization-147983

Sunstar Davao

By Jhun Gatmaitan

THE government had committed some negligence in its decision to allow the private sector to handle energy management in the country, an Energy official admitted Thursday.

"The government made some wrong decisions on giving the private electric cooperatives and power plants handle the energy management... where the government did not anticipate the negative outcome of such decision," Department of Energy (DOE) Undersecretary Josefina Patricia M. Asirit said.

Asirit graced Thursday’s Information and Education Campaign of the DOE at the Marco Polo Hotel in Davao City.

Over a hundred representatives from power companies in Davao Region, Central Mindanao and the Caraga Region attended the energy forum.

"I don't want to put the burden on electric cooperatives, we need to educate the people on renewable energy and the needed power supply in the future," she said.

Asirit said the agency has embarked on "energy reform agenda" in a bid to mainstream access of the greater majority to reliable energy services and fuel efficiency thru bio-ethanol utilization.

She said local production of renewable energy and countryside development is among the thrusts of Energy department.

Published in the Sun.Star Davao newspaper on April 01, 2011.

Aquino to open Iloilo’s first coal energy plant

Sunstar Iloilo

By Lydia C. Pendon

PRESIDENT Benigno Aquino III will formally open on April 1 Iloilo City’s first coal-fired power plant that will augment the power requirement of the whole Panay island.

The P17.8 billion facility owned by Metrobank Group, Global Business Power Corp. (GBPC) and Panay Energy Development Corp. (PEDC) is the biggest private sector investment in Western Visayas.

Aquino will lead in unveiling the marker and switching on ceremony to be assisted by Metrobank chairman George Ty.

The President will be joined by city and provincial officials during the reception party to be held at the power plant facility.

The power plant located at Barangay Ingore in La Paz district started its commercial operations last March 26. It will energize the whole Panay island, including Boracay island in Aklan, and some parts of Negros Occidental province.

The twin plants, which can generate 82 megawatts each, use the latest circulating fluidized bed (CFB) boiler technology to ensure negligible levels of emission and at the same time, attain 99.9 percent efficiency level with 164 megawatts.

Provinces in Panay island, particularly Iloilo City, are now assured of additional 164 megawatts on top of the existing 109.5 megawatts generated from a diesel plant of GBPC, a sister company of PEDC.

Power supply agreements were already drafted with key power distributors such as the Iloilo Electric Cooperatives (Ileco 1, 2 and 3), Guimaras Electric Cooperative (Guimelco), Capiz Electric Cooperative (Capelco), Antique Electric Cooperative (Anteco) and Aklan Electric Cooperative (Akelco).

Davao Sur town gives green light on coal-fired power plant

By Mindanews | Thursday| March 31, 2011

DAVAO CITY (MindaNews/30 March) – As Davao City is still in a quandary whether to approve or not the construction of a giant coal-fired power plant within its boundaries, neighboring Sta. Cruz town in Davao del Sur have no second thoughts in allowing Aboitiz Power Corp. to construct a small part of the plant.

Of the 51 hectares needed for the proposed P25-billion 300-megawatt power plant, the main generating unit will be in the Davao City-side, while only the warehouse and storage facilities will be built in Barangay Inawayan of Sta. Cruz, occupying 17 hectares.

Municipal Councilor Alan B. Angub said they approved the project because it would not pose risks to Sta. Cruz residents as the emissions will be in Barangay Binugao of Davao City.

“After conducting public consultations and committee hearings, the council decided to favorably endorse the project,” the councilor added.

The committees on health, trade and industry, energy, transportation and communication and environment and natural resources of Davao City, meantime, are busy mulling over the proposal.

Angub said the endorsement was contained in a resolution passed by the majority of the members of the municipal council.

The municipality of Sta. Cruz, he said, also welcomes the project since it would mean more employment for local residents and more income for the town courtesy of taxes from the power firm.

Aboitiz Power explained that the area in Sta. Cruz is intended for the port and storage facilities that would house the unused coal. The approval from the local government unit was among the requirements by the national regulatory agencies to pursue the project.

Manuel M. Orig, Aboitiz Power’s first vice president in Mindanao, said the firm is honored to receive Sta. Cruz’s endorsement.

“We shall continue to fulfill other requirements of national and local government units while explaining to the public the benefits of our clean coal power plant project,” he said.

In Davao City, the proposed project was met with opposition by anti-coal advocates as they claimed it might pose risks to the public’s health and the environment.

Dr. Romeo F. Quijano, a pharmacology and toxicology professor at the University of the Philippines college of medicine in Manila, said earlier the planned coal plant even has radioactive elements that could pose danger to residents near the project.

But the power firm assured that “no chemical will come in contact with the water. The power plant will not affect our water supply because it is located near the sea and therefore downstream from Davao’s water sources.” (MindaNews)

Spanish businessmen keen on energy, PPP

Manila Times.net

By Ben Arnold O. De Vera, Reporter

SPANISH businessmen have committed to invest in the Philippines’ energy, food manufacturing, and infrastructure sectors, according to the Board of Investments (BOI).

Trade Undersecretary and BOI Managing Head Cristino Panlilio told reporters that investors from Spain are looking at possible participation in the government’s public-private partnership (PPP) initiative.

A group of about 20 construction firms will arrive in the Philippines by the middle of this year to look at the PPP projects to be rolled out, Panlilio said.

Twenty-nine Spanish companies are now in Manila to meet with potential local partners and explore opportunities.

Alfredo Bonet Baiget, secretary of state for external trade of Spain’s Ministry of Industry, Tourism and Trade, said businessmen for a long time were confined to the domestic market as well as the European Union and Latin American markets.

Recently, the Spanish government encouraged companies to internationalize “so that the external sector can stimulate our economy and become a stable source of growth,” Bonet Baiget said.

“In this internationalization process, we would like the Philippines to be a key partner in Southeast Asia,” he said.

“The Philippines is a country with which we believe our companies can collaborate and exploit business ventures of mutual interest,” he added.

Panlilio said several Spanish firms already committed to invest in the Philippines, including power producers such as Unión Fenosa, Gamesa and Endesa.

Also, Grupo Leche Pascual, one of Spain’s largest dairy product manufacturers, will infuse about $10 million for a canned yogurt production facility in the Philippines, Panlilio said.

The BOI official said Grupo Leche Pascual is in talks with San Miguel Corp. for the domestic distribution of its canned yogurt. The Spanish company also plans to export to other Southeast Asian countries through its Philippine facility, he said.

NGCP given more time to finish feed-in tariff rules

By Donnabelle L. Gatdula (The Philippine Star) Updated March 31, 2011 12:00 AM

MANILA, Philippines - The National Grid Corporation of the Philippines (NGCP) has secured the approval of the National Renewable Energy Board (NREB) to extend the deadline for the release of the feed-in tariff (FIT) rules to May 16 this year.
NREB chairman Pedro Maniego said NGCP, the operator of the country’s power transmission grid, has requested an extension to enable it to “submit absorptive capacity study for RE (renewable energy) sources.”
He said they deem the study as necessary for the proper implementation of the FIT.
“The DOE (Department of Energy) needs this study to determine installation targets which must be included in the FIT petition. NREB approved the NGCP request and wrote ERC (Energy Regulatory Commission) to extend the FIT petition submission deadline to May 16, 2011,” he said.
According to Maniego, there is a need for the NGCP and the DOE to determine the RE capacity in the first three-year initial implementation of the FIT.
The NREB official said there is also a request from several RE alliances to defer submission of the FIT petition to give them time to evaluate the preliminary FIT rates proposed by the NREB technical committee. “The extension also addressed their concerns,” he said.
Energy Secretary Jose Rene Almendras echoed the need to extend the deadline for the FIT rules implementation.
“It will be difficult to carry it out on the earlier approved deadline (March 31). There is this grid-impact study question. I think the determination of the feed-in tariff will not be a problem as far as finding the right price. The problem will be the target, the cap. That will now be directly influenced by the study we asked the grid corporation to do,” he said.
Almendras said he is confident that they would still meet the deadline of the middle of this year for the FIT implementation.
“Maybe a one or two-week delay in the submission can be accommodated for the promises we made for the mid-year decision for the ERC.”
FIT is a structured rate to be charged by RE developers that would guarantee their returns over a 15-year period. The FIT will be paid by electricity consumers connected to the transmission or distribution networks through a uniform pesos/kWh charge to be known as the FIT Allowance (FIT-All), the implementation of which is similar to that of the present universal charge.
Starting with the effectiveness of RA 9513 or the Renewable Energy ACT, the total additional power capacity from new RE projects envisioned to be installed within the next five years now runs at 1,636 MW.
Proceeds from the FIT, through a so-called renewable energy charge (REC) will be administered by a fund manager, most likely the NGCP.

Grid impact study stalls feed-in tariff level setting

business mirror
WEDNESDAY, 30 MARCH 2011 21:58

THE determination of the feed-in tariff (FIT) levels will not be a problem as far as finding the right price is concerned, but even so, Energy Secretary Jose Rene Almendras said on Wednesday, “It seems it will be difficult to meet the deadline [to submit the proposed FIT levels this month’s end] owing to the grid impact study being conducted by the National Grid Corp. of the Philippines [NGCP].”

He pointed out the problem will be the target cap, which will be directly influenced by the NGCP grid impact study. “We are actually pushing for a March 31 deadline, but the Chinese consultants of NGCP said it was impossible for the grid impact study to be done by month’s end and that it will be feasible for it to be done by mid or end-April,” he added.

The grid impact study, according to the energy chief, will tell them how much of each technology can be absorbed into the grid without disrupting the existing system.

Almendras cited China’s experience where they had a few thousand megawatts of wind power that could not be put into the grid because of the problems it naturally entails.

In the Philippines there is a need to thrash out how much renewable energy can be absorbed into the grid in its present state, or in the next two-to-three year period, because that’s the framing of the feed-in tariff.

Almendras said some technologies are less intermittent. “The fluctuations or intermittencies in the supply of renewable-energy sources could create havoc on the grid in terms of pricing. Some technologies will be very grid-sensitive, while the others will not be.

Another issue to be addressed, Almendras said, is the location where the renewable-energy power plants can be built. The grid impact study could indicate which areas prefer certain renewable-energy technologies.

“What we’re going to do, we’re going to try to move as fast as we can. We’re not saying we’re going to move to the end of April. Maybe a week or two-week delay in the submission can be accommodated for the promises we made for the midyear decision for the ERC,” he said.

Pete Maniego, NREB chairman, confirmed that NGCP requested for an extension up to end-April to submit the grid impact study. He said the DOE needs this study to determine installation targets which must be included in the FIT petition.

Maniego said his agency approved NGCP’s request and wrote the ERC to extend the FIT petition submission deadline to May 16. --P.A. Isla

National Grid assures no technical glitches

Manila Standard Today

by Alena Mae S. Flores

THE National Grid Corp. of the Philippines assured electricity users of the integrity of the country’s transmission networks in the coming summer months as it ruled out a technical error in the tripping of the San Jose-San Manuel line.

National Grid said it is addressing isolated cases of disturbances to the country’s transmission network even as it ruled out technical constraints as the cause of the power outage that hit certain parts of Metro Manila and nearby provinces last Saturday.

“It was an isolated incident and not a portent of any major power outage or running brownouts this summer,” NGCP spokesperson Cynthia Perez Alabanza said.

“The accident happened because of human error. Our transmission grid has no technical constraints to speak of and remains fully capable of delivering power to its customers. But accidents like grassfires happen and these are beyond our control,” Alabanza added.

The grassfire in Barangay Sumacab in Cabanatuan City, Nueva Ecija that led to the tripping of the 500-kilovolt San Jose-San Manuel line last Saturday necessitated the shutdown of three of NGCP’s four transformer units at the San Jose Substation in Bulacan, which then led to the power outage on Saturday.

Alabanza said NGCP president and CEO Henry Sy is appealing to communities hosting transmission facilities across the country to be more vigilant in guarding and protecting high-voltage transmission lines against grassfires, especially during the summer season..

“The cause is clearly not a transmission problem or technical constraint on the part of the NGCP but a physical fault which is beyond our control,” Alabanza said. “This is an isolated incident that could have been avoided if we can all work together in helping safeguard ourtransmission lines.”

Alabanza said the expansion of the San Jose Substation’s capacity last year already effectively addressed the transmission congestion in the Luzon grid inherited from its predecessor, the National Transmission Corp.

First Gen says 2010 profit rose to $121m

Manila Standard Today

by Alena Mae S. Flores

First Gen Corp., owned by the Lopez group, said Monday it registered a consolidated net income of $121 million in 2010, up 27 percent from $95 million in 2009, due to higher revenues.

The company reported to the Philippine Stock Exchange that net income attributable to the parent company rose $70.2 million, up 319 percent from $16.7 million a year ago.

First Gen’s consolidated revenues also jumped to $1.2 billion, up 33 percent or $222.1 million, from $1 billion in 2010.

“The substantial increase in earnings was driven by the strong operating performance of the First Gas group, First Gen Hydro Power Corp. and Energy Development Corp. These developments were complemented by the positive effects of the company’s deleveraging program,” First Gen president Giles Puno said.

The company said the reliable dispatch of First Gas’ 1,000-megawatt Santa Rita and 500-MW San Lorenzo natural gas-fired power plants were the main contributors to the increase in revenues from the sale of electricity.

The higher revenues, however, were offset by corresponding increases in the pass-through fuel charges to electricity buyers and higher operations and maintenance fees paid to Siemens Power Operations Inc.

The First Gas plants delivered stable earnings of $130.1 million in 2010.

First Gen said there was a notable increase in equity in net earnings from associates, namely Energy Development and FG Hydro in 2010.

Energy Development, the country’s largest operator of geothermal-fired power plants, provided higher earnings to First Gen of $52.5 million in 2010, up by $21.5 million, from $31 million in the previous year.

The improvement resulted from the full-year effect of the operation of the 192.5-MW Palinpinon and 112-MW Tongonan geothermal power plants, Energy Development’s receipt of VAT tax credit certificates and lower deferred taxes.

The improvement in earnings was partially offset by the impairment booked for Energy Development’s 49-MW Northern Negros geothermal power plant and lower revenues from Energy Development’s Unified Leyte geothermal power plant complex.

Coal not a wise long-term power option – expert

By Mindanews | Wednesday| March 30, 2011

DAVAO CITY (MindaNews/29 March) – Local governments have been cautioned against entering into contracts for coal-processing and coal-fired power plants as mounting global fears on operating nuclear power plants may prop up the price of coal soon and using it may end up more costly.

Catherine P. Maceda, adviser to the Senate committee on climate change, told a climate change conference at the Marco Polo Hotel here Saturday that the coal’s promise of cheap power may have been negated by the mounting preference for sources other than nuclear energy in the aftermath of the nuclear meltdown in Japan.

“Eventually, the price of coal may increase. This may even become too expensive for local governments to pay or operate in the long run, aside from being dirty to the environment,” Maceda said.

The conference served as a prelude to the worldwide Earth Hour activity on Saturday which was highlighted by a simultaneous switching off of electric lights for 60 minutes.

Maceda said coal was a “bad” preference for a source of power despite its cheap price.  “We should rather develop more renewable sources of energy, because these are ours, and sooner, because of the law on renewable energy, prices would go down.”

She told local chief executives to look at the terms of the contracts with companies offering to build coal-fired power plants. “I hope that they would not enter into long term contracts, because we would expect more interests in developing renewable energy sources because of the law.”

“And we would expect prices to become affordable in the long run,” she said.

“They (local governments) should demand for clean coal if ever they would enter into contracts,” she added.

Arturo Milan, executive vice president and chief operating officer of the Aboitiz-owned Davao Light and Power Co., said that Aboitiz Power’s proposal to put up a coal-fired power plant in Davao City was indeed the cheapest alternative that would enable the Davao Light to meet the power requirement of its franchise area and the annual 6.1-percent increase in power demand of this city.

Aboitiz Power has assured Davao residents of developing clean coal energy, aside from bringing the city councilors to the Steag coal-fired power plant in Misamis Oriental for an ocular visit at the five-year-old facility.

“What we are interested in is to have a baseload that is dependable and cheap,” Milan said.

The Davao Light’s 306-megawatt requirement for the household and industries was supplied by the National Power Corp. (260 mw) and the remaining 46 mw by the Hedcor (42 mw by Hedcor Sibulan and the 4 mw from Hedcor Talomo). The Hedcor is a sister company engaged in power generation.

The Davao Light is the distribution company of the Aboitiz group covering the cities of Davao and Panabo of Davao del Norte, and the municipalities of Braullio Dujali and Santo Tomas.

Milan told the conference that the successive episodes of the debilitating impact of the El Nin͂o occurrences in 1992, 1996, 2004 and 2008, have ruled out hydropower as undependable power sources.

The El Nin͂o occurrences forced severe power blackouts and power rotations among factories or purchases of power generation sets. The Mindanao grid gets 53 percent of its supply from the hydroelectric power plants along the Agus River of the two Lanao provinces, and the Pulangi power plant in Maramag, Bukidnon.

“I am confused. When we raised our rate by eight centavos, everybody was complaining.  And when the El Nin͂o happened, the public has questioned us why we cannot supply them with power. And when a coal plant is being set up here to give us cheap power, there are those who oppose it,” Milan said.

He said a Belgian company has proposed to put up a 20-mw solar energy generation. “Aside from it is only 20 mw [sic], the feed-in tariff is also high at between P20-P26 per kilowatt hour,” he said.

“If we get this power source, and computing it with the other power sources that we have, we would expect an addition of P2.50 to the current P6.68 per kwh,” he said.

The new electric rate would be near the rate of P8.20 per kwh collected in the Visayas franchise and Cagayan de Oro City.  Luzon collects a higher rate of P11.40 per kwh.

“We have to get more sources of power so that the growth of Mindanao would not be stifled by the inability of the distribution companies to provide the power requirement,” Milan said.

Davao City’s power requirement grows by an average of 6.1 percent yearly, “and if not for the rotation brownouts last year, it could have been eight-percent growth,” he said.

Davao Light has a supply of 306 mw while its peak demand is 297 mw.

“This is the peak power consumption under normal conditions, without the El Nin͂o,” Milan said.

Citing industry sources, he said the company would need 10 mw for every one degree rise in temperature.

During the El Nin͂o, temperature rose by five degrees. “That would need at least 50 mw,” he noted. (MindaNews)

Governor lifts order, but sets conditions for plant operator

Sunstar  Cebu
By Bernadette A. Parco and Oscar C. Pineda

THE order that stopped the hauling and transporting of raw coal for the power plants of Kepco-Salcon Power Corp. (KSPC) in Barangay Colon, Naga City was lifted, but with conditions.

Engr. Antonio Corpuz, Salcon Power Corp. (SPC) senior vice president and chief operations officer, told Sun.Star Cebu that Gov. Gwendolyn Garcia took note that KSPC has taken measures to address the coal dust problem.

These are the governor’s conditions: that KSPC and its contractor Doosan Construction will follow all “mitigating measures and procedures”; that the company will immediately start working on its permanent mitigating structures, as earlier agreed upon; and that KSPC will keep coal dust from bothering residents again.

“If there are again complaints raised, I will ask you to stop delivery,” said the governor during a meeting last night. She gave the power company until April 30 to build a permanent structure to contain the coal stockpile.

The “mitigating measures and procedures” include continuous spraying of water during when coal is unloaded; a two- to three-meter drop height from the coal chute outlet to the top of the coal stockpile; and suspending the delivery and unloading of coal during strong winds.

Moon Jong Woo, KSPC vice president and construction site manager, told Governor Garcia before she lifted the cease-and-desist order that their power plant was running out of coal. It only had enough coal to last until noon today and would be forced to stop operations.

Unloading

Some 45,000 tons of coal kept in a barge since last Thursday have yet to be unloaded.
Woo said its two power plants consume 1,200 tons of coal and 600 to 800 tons of coal per day, respectively.

KSPC officials and Corpuz met with Capitol’s Engr. Eulogio Pelayre and Provincial Legal Officer Marino Martinquilla yesterday. They again met with the governor late yesterday afternoon.

But the power-producing company still has to face another concern, an alleged violation of the Clean Air Act.

The results of tests by the Environmental Management Bureau (EMB7) on ambient air near the firm’s compound exceeded government standards. The KSPC officials were again asked to present a proposal to address air pollution in Naga City.

With Governor Garcia’s order to lift the CDO, the company is focused on implementing the conditions she enumerated.

“There are conditions. During the unloading (of coal), the sprinklers should be working full-time. Another condition is that if the winds are strong, hauling should be stopped,” said Corpuz.

Corpuz said they still have not heard from City of Naga Mayor Val Chiong whether he, too, would lift his order

“We will have to meet with him, maybe before lunchtime,” said Corpuz.

Humanitarian

In a separate interview, Mayor Chiong told Sun.Star Cebu that he earlier conferred with Governor Garcia that they would review the schedule of plans KSPC will present.

“I told Governor Garcia that whatever she decides, if she lifts the CDO, I will also lift my CDO,” said Chiong.

“As much as we have the same objective, to protect the people from the dust emission, we are also doing this for humanitarian reasons. They (KSPC) also have the demurrage payments,” he added.

The demurrage is the payment given to ships for each day that goes beyond the contracted period for unloading shipments.

Garcia and Chiong issued their orders last Friday after a raw coal shipment docked at the KSPC compound, a few hours after KSPC officials pledged that a shipment was not expected until the end of the month and that this would be accommodated unless short-term dust mitigating measures are implemented.

Relieved

Chiong and Naga City residents earlier complained of black dust particles settling on rooftops, furniture and clotheslines, while KSPC was unloading raw coal from a barge.

In response to the complaint, KSPC installed dust suppression measures such as temporary plastic sheets, reduction of the height of the pile of coal in the stockyard and the unloading drop height.

In a press statement, KSPC general counsel Guillermo Dabbay Jr. said company officials “are relieved upon learning of the conditional lifting of the cease-and-desist order of Gov. Gwen Garcia, because the power company can continue fulfilling its commitment to provide electricity for Cebu without interruption.”

He took note the timing of the decision was crucial, as coal supply at the yard will be depleted today.

“We are thankful that the coal yard dust prevention plan finalized by a technical committee… satisfied Governor Garcia and we will religiously abide with the conditions she set, because these ensure prevention of another unfortunate incident that poses dangers to the environment and health of residents of our host community,” said Dabbay.

Contribution

The amount of energy produced by KSPC is significant, according to Department of Energy Visayas Director Antonio Labios.

The two units of coal-fired power plants owned and operated by KSPC are generating a total of 175 megawatts (mw), connected to the Cebu-Negros-Panay grid.

Corpuz added that the second unit is being tested at 75 percent capacity or at 75 mw, while the first unit is fully operational at 100 mw.

Labios pointed out that based on the daily report from the National Grid Corp. of the Philippines (NGCP) last Monday, KSPC contributed 175.6 mw in the afternoon and 79 mw around 1 a.m. the next day.

The NGCP forecast for March 25 to 31 is 1,082 mw for the Cebu-Negros-Panay grid with a reserve of 128 mw.

If KSPC fails to contribute power to the grid, the reserve would be reduced.

Lawyer Joel Bontuyan of the Energy Regulatory Commission said the power generated by KSPC is significant and could affect its customers, which include the Negros Island and Cebeco One.

Connected

“We are interconnected. The output of KSPC would affect the integrity of the grid. For example, if there is an area with excess power, there would be another area that would be experiencing a brownout,” he said.

“Even if Veco is not a client of KSPC, the NGCP, as system operator that oversees the integrity of the grid, could possibly demand Veco to shift loads,” he added.

In a separate interview, EMB 7 Director Alan Arranguez said the company has committed another infraction against the Clean Air Act.

EMB7 personnel took ambient air samples in Sitio Seaside, Barangay Poblacion in Naga last March 25 from 1:20 p.m. up 2:20 p.m.

The test for total suspended particulates showed 353 micrograms per cubic meter, which is higher than the government standard of 300 ug/cu.m.

Arranguez said a technical conference will be held today with KSPC officials as well as Naga City officials led by City Administrator Engr. Arthur Villamor.

“They will discuss immediate measures that have to be undertaken (to address the pollution),” Arranguez said.

“We have to re-visit the impact management plan of the company and the environmental monitoring.”

Published in the Sun.Star Cebu newspaper on March 30, 2011.