By Caroline J. Howard, ABS-CBN News Channel
Posted at 11/01/2010
MANILA, Philippines - The Energy Department said it has plugged the power shortage in Mindanao but the region could still see 2-hour brownouts in the summer months next year if water generation is deficient.
"For the past 2 weeks, Mindanao has not been having problems except those where there is a transmission problem or a line that goes of. I'm not saying that's the end of the problem," Energy Secretary Rene Almendras said on ANC's "The Rundown".
"Next year, during the summer months, if we don't have enough water to continue energy generation, then were going to be short again. There will be a critical month in March but we will be rehabilitating one of the hydro plants. But beyond that it should not be more than 2 hours during the summer months."
Almendras blamed the brownouts in Mindanao on strict compliance to rules that have restricted the use of reserve hydroelectric power for cases when power plants fail.
To plug the Mindanao power deficit, Almendras said, they sourced power from 2 barges where some 200 megawatts had not been dispatched as well as extra capacity in Polangui, Bukidnon that had been used as a spinning reserve.
"If I had my way I'd have 500 megawatts of non-hydro-based generation in Mindanao today."
The cost of power in Mindanao, P2.80 per kilowatt-hour for hydro power, is the cheapest in the country.
Additional power capacity
Almendras said Mindanao's power problem depends on shifting power dependence from hydro to other sources.
As such the Energy department is accelerating efforts to rehabilitate power plants including one based in Iligan which can generate 100 megawatts, as well as those in Polangui facility and the Agos Plant in Lake Lanao which can bring in 50 to 60 megawatts next year.
Almendras added they have commitments in the pipeline: 200 megawatts from the Aboitiz group, 200 megawatts for Davao, 100 megawatts in Saranggani and one more plant in General Santos which will be up and running in 3 years.
Visayas and Luzon
Almendras said similar efforts need to be pursued in the Visayas and Luzon, which are experiencing their own power woes.
"Visayas has been suffering for 3 years now. They're having regular 2- to 3-hour brownouts on a daily basis. The good news is because of all the suffering, they decided to allow and build power plants. 300 megawatts of additional power coming onstream between December, February and March next year. Another plant coming on in Panay, when these two plants are finished there will be excess power in the Visayas," he said.
"Some calculations say they should be okay until 2017, I think with the development we expect from Cebu, we're going to have some shortage as early as 2014 or 2015. As early as end of early next year, we better start planning for another power plant in another baseload plant in the Visayas."
The Energy Department had estimated a 300-megawatt shortage in Luzon next year, what Almendras said could partly be covered by the excess power in the Visayas.
"We're going to be short by 300 megawatts next year for Luzon. Prior to that, people were saying there's 1000 megawatts excess power in Luzon and yet when we took over and took an inventory of the generating assets, we saw we'd be short 300 megawatts. We're hoping we can move 150 megawatts of the excess power in Visayas come March or April next year and bring it to Luzon. The problem is if there's no reserve, if anything goes wrong we'll have one and a half to two-hour brownouts."
Rehabilitation efforts
"By 2012, we're hoping rehabilitation work on some plants come in because we think we'll be short another 300 megawatts by then."
Almendras admitted the country is losing out on production investments because of the high cost of power, putting it next to Japan as having the second most expensive cost of power.
"For the investors into generation were very attractive because our prices are high but for the users thats a disincentive."
Almendras noted they are currently asking companies that bought power plants to accelerate rehabilitation. He cited how Masinloc, which was producing 300 megawatts when it was bought from government, was back to original capacity of 600 megawatts after undergoing rehabilitation.
"During a trip to the US with the President we closed a new deal. AES is investing a billion dollars to build a 600 megawatt power plant. The first plant that's going to come onstream in 2013, is a GN power 600 megawatt. The AES plant we signed with the President committed to get off the ground by the middle of next year and that will be onstream in 2014. The challenge is in 2011 and 2012 because there's not much we can do. 2011 were talking about addressing some of the generating assets that are not being used. We have to decide: do we want power or not and are we willing to pay the price."
"We've tried to understand the whole energy situation. The incentives will come int he form of guarantees. We cannot even guarantee contracts anymore. We're supposed to be going into the open access market, where buyers and sellers can deal directly with each other. What were trying to do is to make that market as efficient as possible. We're trying to address technical issues of moving power where they are needed which will allow sellers to sell it to places that need to buy it."
Alternative sources
To help bring down the cost, Almendras said they are talking to new investors who can put in a gas-fired plant in 18 to 24 months.
He added the country should turn to alternative energy sources including natural gas (CNG or LNG), which is not only faster to deploy, but also comes with no take or pay arrangements and needs no guarantee from government, except that the infrastructure development involved is heavy and will take long.
While government wants to develop renewable energy sources, Almendras said it will have to pace investments relative to price. Solar energy alone costs twice as much as coal. He added when it comes to nuclear energy, there are also safety issues.
"We are a seismically-sensitive location, our standards are different from countries which don't have earthquakes."
"I don't think we can do it in 10 or 15 years but the energy mix is going to be very challenging if we are to accept the fact that petroleum as a source of energy is now finite and has limited economic life left."
Almendras said Indonesia has announced they will go into nuclear energy, following the lead of Thailand and Vietnam.
Oil producing countries such as the United Arab Emirates have ordered nuclear power plants while the Kingdom of Saudi Arabia will be bidding out a nuclear facility by the end of this year, he added.
Meantime, Almendras said he is not excited about the prospect of reviving the mothballed Bataan nuclear power plant.
Expanding the use of alternative fuels for transportation is part of government's 3-pronged goal to expand the sufficient and sustainable delivery of energy to Filipinos.
The DOE aims to ensure energy security, achieve optimal energy pricing, and develop a sustainable energy plan. To ensure energy security, it also plans to conduct an inventory of power plants and maintain a competitive investment climate.
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