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MINDANAO

Mindanao Coal on Schedule, Online by December

by: Mike Baños

September 30, 2006

VILLANUEVA, Misamis Oriental – Here's the latest update on the coal-fired power plant in Misamis Oriental: Construction of the Mindanao coal-fired power plant is proceeding as scheduled and should be online by the end of the year, plant officials said. "We are on the final stage of the power plant's commissioning. The first unit has passed the guarantee and efficiency test while the second unit is gearing-up for a reliability test in preparation for full operation by yearend," said Jerome Soldevilla, communications officer of Steag State Power Inc, (SPI), the project company of the Mindanao Coal-Fired Power Plant.

"Commercial operations will begin as planned not later than 31 December 2006 and we will have our official inauguration in January 2007" he added. "As of 27 September 2006, the power plant project attained a weighted progress achievement of 99%. Based on this figure, vis-à-vis the timelines, we are on track and confident that it will commence commercial operations as committed."

Oliver Brock, head of Steag's commissioning team, has been working closely with his counterpart Y. Onishi, head of the Kawasaki Plant Construction, Inc. (a subsidiary of Kawasaki Heavy Industries) since the first quarter of the year for the commissioning of the first 105MW unit even as the second 105MW unit is being assembled nearby.

That may sound like good news for an island where demand is fast outstripping available power supply, but power supply in the island remains critical, as oil fired plants come down and repairs in its hydroelectric plants continue.

Emmanuel Abellanosa, Officer-in-Charge of the Office of the Assistant Vice President for Mindanao, said they have been constrained to implement voluntary power curtailment or "power shedding"   at various times last summer due to imbalances between the available power from National Power Corporation (NPC) and the demand from residential, commercial and industrial users.

"There's not enough spinning reserve in the Mindanao grid to address contingencies," Abellanosa said.

NPC figures show the system gross reserve in Mindanao from the latter half of 2005 to year end 2006 was already insufficient to meet the 11.9-percent load following/frequency and spinning reserve requirements.

NPC president Cyril C. del Callar, earlier warned that "recurring power shortages are expected especially during peak periods, when generators and or associated transmission lines are on forced outage."

Peak power demand in Mindanao last summer topped 1,100 megawatts but the NPC only managed to supply an average of 1,050 megawatts to the Mindanao Power Grid. As a result, whenever there's a glitch in the distribution system, power is cut in some areas as the grid seeks to balance the remaining available power throughout the delicately balanced system.

Abellanosa said NPC's total power generation was curtailed due to rehabilitation works in the 92MW Agus IV Hydro-Electric Power Plant at Iligan City, the 255-megawatt Pulangi IV Hydro Electric Plant in Bukidnon and the 25MW Iligan Diesel Power Plant in Ditucalan, Iligan City, turned over a few years back by independent power producer Northern Mindanao Power Corporation.

As a result, power supply to the Zamboanga Peninsula and nearby areas was curtailed by 50MW causing up to three hour power outages, although Cagayan de Oro City managed to get by thanks to the 18MW Mindanao Energy Systems (Minergy) power plant which augmented available power to the local utility (Cagayan de Oro Electric Power & Light Co. or CEPALCO).

Rufino T. Magbanua, communications officer for Transco NCMA, said at least 85 percent of Mindanao has already been tapping independent power producers (IPPs) and NPC power barges particularly in key areas.

That's for the short term. Over the medium and long term, even if only ongoing base load coal-fired power plant in Villanueva, Misamis Oriental comes online as scheduled by year end, it's merely going to patch things over but not fix it.

Although the grid is being weaned away from its traditional dependence on hydroelectric power plants, the bulk of generated power in the island is still being sourced from the Agus Hydroelectric Power Plants in Iligan City and Lanao del Sur and the Pulangi Hydroelectric Power Plants in Maramag, Bukidnon.

The Regional Development Council in Region 10 (RDC-10) has sounded the alarm over the deteriorating power situation in Mindanao.

Arsenio L. Sebastian III, RDC-10 vice-chairman and Dr. Modesto Babaylan, RDC 10 infrastructure committee co-chairman, disclosed recently that Pulangi is producing only 100-120MW of its 255MW rated capacity due to accumulated siltation in the Pulangi River feeding its catchment basin.

Besides the lack of available funds to dredge the Pulangi river, Sebastian said they also have no place to dump the dredged silt taken from it.

Sebastian is also concerned the Mindanao Coal –Fired Power Plant might not be sufficient to meet energy demand in the island, citing Department of Energy statistics show a rising demand for power that the present supply might be unable to meet even with the new base load plant online.

NPC President del Callar earlier said that from 2007 to 2008, power supply in Mindanao would be stable as the system gross reserve remains sufficient to meet the LFFR and spinning reserve with the scheduled commissioning of the 200 MW coal plant.

The average power supply reserve margin in the Mindanao grid from 2005 to 2008 is 7.26% with 2008 having the lowest projected power supply reserve margin of 3.93%.  By 2009, peak demand for power in Mindanao will start to exceed the existing power capacity, with additional new capacity of about 57 MW to be needed for the year and an average of 116 MW every year thereafter.

But the environmental advocacy group Task Force Macajalar (TFC) has called on the NPC to review its projections.

TFM spokesperson BenCyrus Ellorin said Mindanao can sustain its power needs without resorting to fossil fuels like oil or coal because its existing hydropower plants are sufficient to meet the island's needs if their full potential of 12,000MW is tapped.

Latest NPC figures only show an existing power band of 982 –1,500 MW with independent power producers (IPPs) capable of another 543 MW.

NPC expects power demand in Mindanao to grow 11.8 percent from 2005-2011 and would need an installed capacity of 2,830MW by the end of this period with the Mindanao Coal-Fired Power Plant filling the gap.

Ellorin believes Mindanao would be better off if it rehabilitates its present hydroelectric power plants and reforest the watersheds that support them or inter-connect with the rest of the Philippine grid with the Leyte-Mindanao Inter-connection project.

The Mindanao grid is divided into three sub-grids - North, West, and South Mindanao. Of these, only North Mindanao enjoys an excess capacity while the West and South Mindanao grids have to import from the North Mindanao sub-grid to sufficiently address peak power demand in their respective areas.

The country's Power Development Plan for 2005 to 2014 stresses the importance of putting up more power generating plants in order to avert a power shortfall in the major islands of the country, particularly in Mindanao since the previous surplus has been effectively erased with the reopening of the National Steel Corporation (NSC, now Global Steel International, Inc. or GSII) steel plant in Iligan City.

In a recent forum to determine just how real the Mindanao Power Crisis is, CEPALCO Sr. Vice President David Tauli said there's no large power plant  (e.g.., 100MW or larger) scheduled for construction in Mindanao from 2007-2011 after STEAG State Power Inc's 210MW coal-fired power plant goes online this year end.

By 2009, Tauli's projections show Mindanao's energy demand at 9,150 gigawatt hours while dependable power supply, SPI's coal-fired power plant included, would only be 9,200 GWh, way below the 11.9-percent load following/frequency and spinning reserve requirements of Transco and a generating system that's no longer "N-1" reliable. 

Tauli said this would result to widespread and lengthy brownouts when a section of the transmission system goes on the blink. A drought like the one expected to hit the island soon would worsen this situation.

In the same forum, former National Power Corp. President Guido Alfredo Delgado concurred with Tauli's observations, citing how energy prices in Mindanao are too low, hence the lack of an economic incentive to add new capacity to the island's power grid.

"There are no creditworthy off-takers and no long term market, hence no long term funds available in the local market for investments in power generation, which by its very nature calls for long-term funds," Delgado noted. "On top of that, there are the stranded costs of Napocor and distribution utilities Mindanao power consumers are mandated to pay under the EPIRA."

Tauli, Delgado and Ellorin all agree the passage of the Renewable Energy Bill which has been languishing in Congress to include a mandatory "renewable power supply portfolio" for distribution utilities should lead to investments in renewable sources of electricity, but chances of the bill's passage before Congress goes into recess next month look dim.

Mike Baños, Executive Editor: Z-Free Press, Zamboanga.com

Mike Baños

Executive Editor

Mike Baños has been a writer for most his life, a journalist for most of it, with occasional delusions of being a poet and songwriter. He grew up in Zamboanga City, learned the ropes of journalism under the late, great E. Rene R. Fernandez and writing from Linda Cababa-Espinosa. He writes a twice weekly column "Hammer & Anvil" for the Mindanao Gold Star Daily, which is also published online by American Chronicle. He is a member of the Cagayan de Oro Press Club, Inc. and its faculty pool for the training module "Responsible and Independent Journalism." It is being implemented in partnership with the South East Asia Rural Social Leadership Institute (Searsolin) of Xavier University (Ateneo de Cagayan).  Mike is the Executive Editor for all OP/ED articles in our Z-Free Press.  We invite your voice to be heard.

E-mail: Mike Baños

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