COMMENTARY: Brownouts are back, hopefully not for good

GENERAL SANTOS CITY (MindaNews/18 Oct) – When the 210-megawatt coal-fired power plant of STEAG in Villanueva, Misamis Oriental began its annual preventive maintenance services, the Mindanao grid, already at least 140 megawatts (MW) short in supply, was again placed under rotational power interruptions.

Power outages of up to two hours in most parts of Mindanao reminded all residents that the temporary lull was – well – temporary.

On Wednesday, Geronimo Desesto of the South Cotabato II Electric Cooperative (Socoteco II) said these pesky and worrisome brownouts could last up to three hours a day following reports that water inflow into the Pulangi River has dropped to low levels.

Pulangi River is the main source of the underutilized, run-of-river 255MW Pulangi Hydroelectric Plant in Maramag, Bukidnon.

The combination of the STEAG shutdown and the critical water inflow of Pulangi brought the total power deficiency in Mindanao to 410MW as of Wednesday.

Mindanao has a total installed capacity of 1,870MW but actual capacity, before the shutdown of STEAG and reduced capacity of Pulangi, was just slightly over 1,150MW. The demand for capacity, then, was already down by 140MW, forcing the National Power Corporation to reduce power supply to electric cooperatives and private power distribution companies.

While the STEAG shutdown will last until November 4 only, power supply from hydroelectric plants in Mindanao are likely to go down as the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) is already forecasting a moderate El Niño occurrence beginning late in the last quarter this year up to the first quarter of 2013.

Mindanao gets 53 percent of its power supply from hydroelectric plants since the Agus Hydroelectric Power Plant complex began operating in the early 1950s, the first one being at the foot of Maria Cristina Falls in Iligan City.

The six hydro power plants along the Agus River have a combined capacity of a little more than 700MW. Some of these plants’ antiquated turbines however have reduced total combined actual capacity to slightly under 500MW.

In the 2009 Mindanao Business Conference in Koronadal City, the Philippine Chamber of Commerce and Industry (PCCI) said Mindanao has to add 100MW of new capacity every year if it is to cope up with projected increase in demand curve alone. This required new capacity does not include demands from big ticket investments such as Sagittarius Mines, Inc. (SMI). In effect, we are now already at least 300MW short of the ideal supply capacity.

PCCI also said Mindanao needs to maintain a reserve capacity equivalent to its single largest operating capacity. Industry sources pegged the reserve capacity to be at least equal to 13 percent of the total installed capacity in the island.

As it now stands, STEAG’s 210MW plant is the single biggest power plant running in full capacity. STEAG went on commercial stream in 2006.

Socoteco II manager Rodrigo Ocat said power interruptions in its franchise area will continue to be a major concern until 2015 when the coal-fired power plant of the Sarangani Electric Corporation (SEC) in Maasim, Sarangani starts operating. Socoteco II and SEC have entered into a power sales agreement for the base load supply of 70MW, roughly 70 percent of the capacity requirement of the electric cooperative. The PSA was already approved by the Energy Regulatory Commission in July. SEC is expected to begin construction next year.

Socoteco II has an existing annual contract with the Aboitiz-owned Therma Marine, Inc. for the supply of 30MW to make for the reduced supply from the National Power Corporation. The supply from Therma Marine however jacked up electricity rates in its franchise area by more than P1.50 per kilowatt hour.

The power supply problem however is not just confined to the franchise areas of Socoteco II as Zamboanga is now reportedly suffering from 2-3 hours of brownouts. So is Iligan City, which hosts the Mindanao regional offices of both the National Power Corporation and the National Grid Corporation of the Philippines.

During the height of the 2010 power crisis when prolonged dry season in Mindanao brought the total power supply down to less than 500MW, brownouts lasting up to 12 hours severely affected and interrupted business operations throughout the island.

The national government has yet to quantify the losses incurred by the economy in Mindanao caused by those brownouts but it is conservative to place them in the hundreds of millions of pesos as the power supply problem lasted for close to five months.

These power supply crisis is again staring at the faces of Mindanaoans although this did not really disappear after the 2010 debacle.

But the need to accelerate the addition of new capacities are now more pronounced if the island is to sustain its growth in spite of the ongoing and recurring power supply problem. More so now that the prospect of lasting peace in the troubled southern parts of the island is already at hand.

Even if the Agus and Pulangi hydroelectric power plants, which are still owned and operated by the Napocor, are fully rehabilitated to the tune of P30 billion, the Mindanao grid still needs to add at least another 300MW by 2016. That will bring the total requirement to 600MW based on the PCCI recommendation (figure includes the 300 new capacity that did not materialize between 2009 and 2012). The supply demand will even grow bigger beyond 2016 when a final peace agreement between the MILF and the government would have been signed.

The conflict areas in Mindanao are among the least developed regions in island. Ironically, these areas are also rich in natural as well as mineral resources. If peace reigns in these troubled regions, we need the infrastructure to propel growth in the island.

Stable and reliable power supply tops that list.

Without it, brownouts will be here for good.

(Edwin G. Espejo writes for www.asiancorrespondent.com.)

URL: http://www.mindanews.com/mindaviews/2012/10/18/commentary-brownouts-are-back-hopefully-not-for-good/

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