Business Mirror
THURSDAY, 29 MARCH 2012 22:42 DENNIS D. ESTOPACE AND CAI U. ORDINARIO / REPORTERS
BUSINESSMEN said power assets in Mindanao should remain under government control as the energy crisis in the country’s second-largest region continues to unravel with politicians drumming up emergency-power option for President Aquino.
A statement released on Thursday by the Philippine Chamber of Commerce and Industry quoted Jose Alejandro, PCCI vice president for energy concerns, as saying, “Diesel plants and barges should remain to be in government hands as dispatchable reserve or standby power...as part of the hydro[-energy] strategy.”
The PCCI also recommended that the government hold an international bidding for the several power repair-operate-maintain-transfer projects and give “close support” to two power plants, including the 300-MW coal-fired plant of the consortium of 21 cooperatives.
“With the crisis now being felt island-wide, it is critical that the situation be immediately addressed with a blend of strategies uniquely crafted for the island in order to draw and move larger economic activities in that part of the country,” it said.
Alejandro also said PCCI believes that diesel-based reserve power facilities should complement and enhance hydro-based plants to sustain lower power costs in Mindanao.
The statement also quoted PCCI President Miguel Varela as saying, “As strategically and correctly planned years before, lower power cost was the key driver in making businesses locate and thrive in Mindanao and would be the a strong platform in achieving peace in the area.”
To sustain this strategy, PCCI said, hydro plants should be Mindanao’s core energy source and hydro-based plants should be enhanced and complemented with diesel-based reserve power facilities.
Alejandro cited as example the Agus hydro plant that he said can produce power at about P3 for every kilowatt-hour (kWh).
“With dredging, rehabilitation and expansion, Agus can produce up to 800 megawatt [MW] of power for about nine months instead of only six months of the year, and a potential year-round dependable capacity of up to 350 MW,” he said.
Alejandro added that Agus’s supply capacity could be complemented with 450 MW of slow speed diesel capacity.
“With 200-MW standby generation sets reported to be privately owned, only 250 MW diesel-based will be needed to complement Agus,” he said.
Alejandro added that such hydro-diesel strategy model could expect to bring an incremental cost of about P1 per kWh in spread-out fixed costs, or total cost of P4 per kWh.
According to him, Mindanao consumers will only pay for the diesel fuel during the summer.
PCCI said it believes high power cost will overwhelm Mindanao consumers if the generation mix is majority coal.
“While coal plays an important role in the generation mix...the development of other baseload generation plants with coal at the forefront must be done only after fully developing all the potential hydro-electric power sites on the island,” its statement said.
Pending such condition, the PCCI added, any measure addressing the power crisis should protect industries to avoid major lay-offs.
The group recommended that government negotiate with private firm AboitizPower to bring in Therma Marine as baseload and at baseload rate for 24 months or as needed, which should be substantially lower than its asking “peaking” rate of P14 kWh.
“Be sure, however, that the Bislig transmission line is reliable,” it said.
PCCI also said the “solution to the current crisis should not be focused only on the supply side, which would cause disastrous results to consumers in terms of power cost, as is now being experienced in Luzon and the off-grid areas.”
“A coherent solution must be complemented with sustaining lower power cost,” the group said.
In an apparent bid to address the Mindanao power problem, which had sent many areas into hours-long brownouts daily,
President Aquino has scheduled a visit to Mindanao after Holy Week to meet with power industry stakeholders and local government executives.
Luwalhati Antonino, chairman of Mindanao Development Authority (MinDA), the socioeconomic planning unit for the island, said the President wanted “to personally convey specific measures taken by the government and the steps needed to secure a reliable and sustainable Mindanao power generation”.
“The President’s objective is for everyone to be part of the effort to stabilize power supply situation in the short term with lesser impact possible on power rates, and ensure sustainable long-term energy security in Mindanao,” she added.
Among several objectives of the meeting was a measure to generate “an indicative aggregate capacity of 219 megawatts, which Antonino said would be enough in the short term “to address the current 150-MW to 170-MW power deficit.”
She added that MinDA has collaborated with the Department of Energy (DOE) to prepare the conduct of the “Dialogue with Mindanao Power Stakeholders” to be held in Davao City after the Holy Week.
“The President understands the full account of the Mindanao power situation and has taken quick steps to address the power shortage problem with great resolve,” Antonino said.
She added that MinDA has been consulting Mindanao power stakeholders, industry players, local chief executives and lawmakers to generate common understanding of the power issue and draw out collective recommendations.
Meanwhile, according to Antonino, the Association Mindanao Rural Electric Cooperatives (Amreco) said electric cooperatives and distribution utilities have responded positively to a recent circular from the DOE that ordered compliance with directives aimed at addressing the power situation in Mindanao.
Clint Pacana, Amreco executive director, said the group believes that the DOE circular restored confidence and trust in the power system and that voluntary adherence and compliance by those concerned could be expected.
Amreco last week publicly aired its suspicion that the National Grid Corp. of the Philippines has manipulated the “dispatching of power” to allow expensive power from coal and diesel-fired sources to be plowed into the Mindanao grid.
With reporting from Manuel T. Cayon
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