Mindanao to rely more on coal and diesel as El Niño threatens hydro plants

DAVAO CITY (MindaNews / 25 Nov) – A new power utilization scheme that will be more dependent on coal and diesel instead of the usual hydroelectric plants for Mindanao is now in the final stage of study before the Department of Energy (DOE) that is seen to counter the possible impact of long dry spell on the island’s energy supply.

This scheme called the Economic Reverse Dispatch Protocol will switch Mindanao’s baseload to coal and diesel from hydropower sources.

During the Information Drive on the Mindanao Energy Plan and the Impacts of El Niño to the Mindanao Power Sector at the Pinnacle Hotel and Suites on Monday, Romeo Montenegro, director for Investment Promotions and Public Affairs of Mindanao Development Authority (MinDA), told reporters that Mindanao’s current dispatch protocol is highly vulnerable to the impact of El Niño since the hydropower plants are heavily dependent on the amount of rain and water level.

The Agus-Pulangui Hydropower Complexes comprise 55 percent of the total energy mix of Mindanao.

The baseload plants are being run to supply power 24 hours while the peaking plants are there for backup when the demand for electricity is at its highest, he said.

During El Niño, he said that the water levels in Lake Lanao and Pulangui River go down, which will result in the lower generating capacity of the Agus-Pulangui Hydro Power Complexes, with an installed capacity of 800 MW.

Under this new dispatch protocol, the diesel and coal plants will be utilized more than the hydroplants.

“When hydro is precarious because of El Niño, baseload are there to provide necessary amount requirement by the consumers. The hydro is fluctuating depending on the peak requirements,” he said.

Before its implementation, he said they are coming out with a price simulation before the year ends to see how much would be its impact in the electricity bills, although a spike in the electricity rates are already expected because diesel and coal are expensive sources of power.

“If you use hydro for longer periods of time, the cheaper your electricity rates will become,” he said.

Hydro only costs less than P1 per kilowatt hour while that of coal ranges from P5.50 to P6 a kWh, but the current rate for Mindanao’s energy mix is P3 per kWh.

By 2017 though, he said the renewable energy’s share in the Mindanao mix will be 30 percent while 70 percent will be coal and diesel.

Although its implementation might address power supply shortfall, he said there are considerations that have to be taken whether this reverse dispatch protocol will still be beneficial after the entry of new power plants in the next few years and the extent of El Niño’s impact.

“We will opt to it as a possible recourse when the situation gets worse,” he said.

Noriel Christopher Reyes, science research specialist II at the Department of Energy’s Electric Power Industry Management Bureau, also said four units of coal-fired power plants with a combined power capacity of 550 megawatts will be connected to the Mindanao grid in the first half of 2016.

Two units will start in the first quarter: the 150-MW unit of the Therma South Inc., a subsidiary of Aboitiz Power, in Binugao, Toril in Davao City; and the 100-MW unit of the Sarangani Energy Corporation in Maasim, Sarangani Province.

The San Miguel Power Corporation will start commercial operation of its two power plants, each having a capacity of 150 MW, in the second quarter, according to Reyes.

From November 2015 to February 2016, he said, the impact of El Niño will be more evident with a projected power deficiency placed at 100-200MW.

But Mindanao’s power situation will normalize with the entry of the new power capacities on the grid, he added.