NGCP forms special working group for Leyte-Mindanao project

MANILA, Philippines – Amid criticisms on the system reliability of the National Grid Corporation of the Philippines (NGCP), the company has formed a special working group to study the proposed Leyte-Mindanao Interconnection Project (LMIP),   a ranking NGCP official said.

NGCP senior technical adviser Guillermo Redoblado said the creation of the technical working group is part of the company’s commitment to complete the interconnection loop to ease the power supply problem in Mindanao and the Visayas.

“A team is working on it. The project still needs approval of the Energy Department and the Energy Regulatory Commission although it’s still in the pipeline,” Redoblado said.

But he said the team is ready to submit its recommendation to the NGCP board soon.

To show strong commitment to pursue the project, Redablado said they intend to include the LMIP in the latest Transmission Development Plan (TDP).

He did not give an estimate of the project cost but indicated this may be higher than initial P18 billion assessment.

On Jan. 15, 2009, state-owned National Transmission Corp. (TransCo) officially turned over the management and operation of its nationwide power transmission system to NGCP. The concession period is for 25 years, renewable for another 25 years.

One of the crucial TransCo projects before the takeover of NGCP last year is the LMIP, which will complete the country’s grid loop.

This project is also envisioned to facilitate the start of the wholesale electricity spot market for Mindanao.

In 2006, TransCo’s board had approved to include the LMIP in the list of ongoing projects from its status as an indicative project.

TransCo was eyeing to tap various traditional financing sources like the Japan Bank for International Cooperation (JBIC), Export-Import Bank and Calyon to fund the LMIP.

The TransCo board had decided to bring down the cost of LMIP to $275 million to get the project going.

The LMIP was supposed to be included in the list of projects the Asian Development Bank (ADB) finance in 2003. But the multilateral financial institution had cancelled the project from its list after the government raised its intention to defer it.

Since the privatization of TransCo is already in the offing, the government had opted to defer the LMIP to allow the winning concessionaire to carry out the project.

The interconnection project was originally designed for a 250-kilovolt high-voltage density cable bipolar link with a total transfer capacity of 500 megawatts.

The project was supposed to include 455-kilometer long overhead line and 23 km submarine cable with a maximum depth of around 1,000 meters below sea level. It emanates from the existing Ormoc converter station in Leyte and terminates at Kirahon converter station in Northcentral Mindanao via Southern Leyte and Northeastern Mindanao.

TransCo had also earlier proposed the speeding up of the implementation of the LMIP to 2008 from the earlier scheduled 2011 to help resolve the imminent power shortage in the Mindanao region.