Mindanao power situation nears critical stage

MANILA, Philippines – The power situation in Mindanao is nearing critical stage as supply can barely cope up with surging demand, according to the Department of Energy (DOE).

Data from the DOE showed that this year, the Mindanao grid will reach a peak demand of 1,525 megawatts excluding the additional capacity requirement of 100 MW.

Energy Secretary Angelo Reyes said despite a noted impact of the global crisis on the economy, investors planning to put up power facilities in the Philippines remain upbeat on their projects.

One power firm set to build a $450-million coal-fired power plant in Maasim, Sarangani said the project will proceed as planned.

Gregorio S. Gonzales, project manager of Conal Holdings Corp. (CHC), said the 200-MW project would have two phases during its construction period.

“Phase I will include the construction of the first 100-MW plant and the common facilities for the whole power station complex,” Gonzales said.

He said Phase II, representing the second 100-MW capacity, will start within 18 to 24 months after the commencement of construction of Phase I.

Gonzales added that the power plant is expected to go on-stream commercially by 2012, at the earliest.

Demand for additional power supply in Mindanao is expected to increase over the next three years.

Archimedes Flores, general manager of Aboitiz Energy Solutions, a sister company of Davao Light and Power Co.warned that reserve capacity in Mindanao will fall to 7.5 percent or 84 MW short of its 212 MW requirement in 2010.

By 2011, Mindanao will likely face a shortage of 174 MW, he added.

National Transmission Corp., now the National Grid Corp. of the Philippines (NGCP), said in 2008, the total dependable capacity in the island was only 1,510 MW.

Generating plants are, however, required to keep 13 percent of their capacity for reserve, straining the reliability of power supply in the island as experienced by long and frequent power interruptions during the last several months.

Flores said the power demand in the island is projected to increase by at least 5.76 percent annually starting next year.

NGCP Gen. Santos City manager Manuel Jamoy said based on the trend in demand growth, the company is projecting a 2,556-MW required capacity for the Mindanao grid by 2014.

Reyes warned that by this year, electricity demand will “outstrip supply in Mindanao.”

For its part, CHC pegged the growth in power demand at a conservative three percent in the preparation of their expansion plans using 2008 with a peak demand level of 1,288 MW as the base year.

At this rate, the actual reserves in the Mindanao grid will likely fall to 60 MW in 2014 and to 16 MW in 2015 before completely going into a deficit in 2016. When reserve capacity goes down to this level, any plant outage in the grid will lead to power outages.

 CHC vice president for business development Joseph C. Nocos said Mindanao would most likely experience prolonged power interruptions if no new power plants are commissioned by then.

“When forecasting power demand, the relevant period for anticipating power supply demand is five years because it will take at least that long to plan, build and operate a power plant,” Nocos said.  

He said that the 200-MW coal-fired power plant they are building will not totally solve the looming power shortage in the island especially since “none of these projections anticipate the entry of large new industrial loads such as the Hanjin ship building facilities in Tagoloan or the new shopping malls that are coming up in Gen. Santos City.”