PCCI proposes solutions to power crisis in Mindanao

MANILA, Philippines - The growth potential and continued operation of enterprises in Mindanao should be supported by short- and long-term strategies of the government, the Philippine Chamber of Commerce and Industry (PCCI) said.

Specifically, the implementation of more hydropower projects, a formal blackout program, more investor participation in repair works, and the construction of coal-fired power plants are needed in Mindanao, the business group pointed out.

“It is critical that the situation be immediately addressed with a blend of strategies uniquely crafted for the island in order to draw and move larger economic activities in that part of the country,” PCCI said in a statement yesterday.

PCCI said the solution to the current crisis should not be focused only on the supply side but also on sustaining lower power cost.

“As strategically and correctly planned years before, lower power cost was the key driver in making businesses locate and thrive in Mindanao and would be the strong platform in achieving peace in the area,” said PCCI president Miguel Varela.

For instance, hydroelectric power plants should be Mindanao’s core energy source, PCCI said. The Agus hydropower plant can produce power at P3 per kilowatt-hour (kwh).

With dredging, rehabilitation and expansion, the Agus power plant can produce up to 800 megawatts (MW) of power for about nine months instead of six months only, said Jose Alejandro, PCCI vice-president for energy.

The Mindanao grid, which needs an average of 1,300 MW daily, lacks an average of 50 MW to 300 MW, resulting in two to four hours of rotating brownouts since January, data from the National Grid Corp. of the Philippines showed.

“As part of the hydro strategy, diesel plants and barges should remain to be in government hands as dispatchable reserve or standby power,” Alejandro said.

The hydro-diesel strategy will bring an incremental cost of about P1 per kwh in spread-out fixed costs, or total cost of P4 per kwh, PCCI said.

After hydropower projects, PCCI said coal base-load generation plants should be developed in Mindanao.

PCCI is supporting the development and construction of Alson’s 200-MW coal-fired plant in Gen. Santos, which should be in operations in two to three years.

It is also pushing the construction of a 300-MW coal-fired plant by a consortium of 21 cooperatives that will increase available electricity in three to four years.

The PCCI also proposed several medium-term programs.

For one, there should be a formal rolling blackout program with a special concern for areas with industries and major economic activities.

PCCI said the government should also negotiate with Aboitiz Power Corp. to bring in the power output of Therma Marine Inc. as baseload capacity for 24 months, which will demand lower costs compared with its “peaking” rate of P14 per kwh.

Lastly, an international bidding should be conducted for the repair-operate-maintain-transfer of the Agus-Pulangui hydroelectric power plants in Lanao, which should release some additional 150 MW in less than 15 months; the relocate-repair-operate-maintain-transfer for four diesel-fired power barges that will add 120 MW supply in less than 15 months; and the repair-operate-maintain-transfer of the 100-MW diesel plant in Iligan.