Mindanao needs additional 3,000 MW from 2021 to 2030

DAVAO CITY (MindaNews / 7 Apr) – The high growth in real estate industry in Mindanao will require additional capacities of 3,000 megawatts between 2021 and 2030 to prevent shortage that may occur if no new power plants will be established within this period, Mindanao Development Authority (MinDA) executive deputy director Romeo Montenegro said.

GN Power Kauswagan’s coal plant in Lanao del Norte as of March 2018. MindaNews photo by BOBBY TIMONERA

In an interview during the “Mindanao Today, Mindanao Tomorrow” forum at Marco Polo Davao on Friday, Montenegro said the island needs a additional huge supply of power as a result of the sprouting of malls, hotels, and condominiums.

“Condominium towers alone will require huge capacity, not including expansions of real estate projects and several other projects,” he said.

The Mindanao reserves would thin out starting 2023 at the rate the real estate industry’s growth is going as well as the island’s annual consumption growth between 6 and 8 percent, he said.

As of April 6, 2018, Mindanao has a reserve of 505 MW based on the report of the National Grid Corporation of the Philippines.

Montenegro said the island would have an excess of 800 to 1,000 by 2019 as the three-unit GN Power Kauswagan Ltd. Co., a coal power plant situated in Lanao del Norte, would start delivering 540 MW next year. GNPower is a joint venture company between Ayala Corp.’s AC Energy Holdings, Inc. and Power Partners Ltd. Co.

New power plants must be constructed starting 2020 to make them running and have them deliver electricity to the Mindanao grid, he added.

He said there are interested investors to build new power plants but they are just waiting for proper timing “because you do not want to invest in a period with so much excess” and power generation is capital-intensive business.

The Department of Energy (DOE) eyed full market operation of the Wholesale Electricity Spot Market (WESM) in Mindanao by second quarter of 2018 to address excess in power supply and enable distribution of power to areas that suffer from outages.

Mindanao has an installed capacity of 3,141 MW, with 2,097 MW available capacity and average demand of 1,707 MW.

The WESM-Mindanao’s predecessor, Interim Mindanao Electricity Market (IMEM) dubbed as the “baby WESM”, was implemented under the Aquino administration in 2013 but was suspended in February 2014 due to a “system collapse” and the need to “resolve operational and commercial issues and concerns.”

Energy Undersecretary Felix William B. Fuentebella said Mindanao grid needs the WESM Mindanao in place soon where the distribution utilities and electric cooperatives and power generators can participate in the market in accordance to the power need.

He said that this is a much faster way to trade power because there is a bidding every five minutes that allows for the buying and selling of electricity, which prioritizes the cheapest energy mix of renewable and non-renewable.

He said the WESM is more efficient than forging of bilateral contracts between the power generators and distribution utilities because those who cannot be served with power based on the contracted capacity will have easy access to the market to immediately fill the power gap. (Antonio L. Colina IV / MindaNews)