Mindanao coal-fired power plant to go on full operation this month

Villanueva, Misamis Oriental - Finished in record time of 35.5 months, the Mindanao Coal Fired Power Plant based here will formally go on full operation beginning this month to better serve the country's second largest island and home to a quarter of the country's populace and the various industries.

The timely completion and operation of the plant, which is owned by Germany's STEAG State Power Inc.(SPI), came at the right time when the island needs additional capacity to meet its growing power requirement. The plant secures for the island an additional capacity of up to 210 megawatts (MW) 0r about percent of the total Mindanao power supply.

President Gloria Macapagal Arroyo who was supposed to lead local and foreign dignitaries in the inauguration of the plant was not able make it to the ceremony because of the bad weather prevailing yesterday. But the plant's inauguration pushed through with Energy Sec.Raphael P.M. Lotilla who delivered the message of the President.

Arroyo invited STEAG to consider expanding the capacity of the plant to meet future demand in Mindanao or build entirely new capacity in Southern Mindanao.

"The entry of this Mindanao Coal-fired Power Plant is one of the crucial means in addressing the challenge of attaining stability in the supply of electricity in Mindanao." Arroyo said in a prepared statement.

Mindanao Power Plant's 25-year commercial operation is on a Build-Operate-Transfer (BOT) arrangement with the National Power Corporation.

Constructed at a cost of US$305 million, the Mindanao Power Plant is considered as one of Germany's big ticket investments in the Philippines and is providing a highly positive business outlook not only for Mindanao but the entire country as well.

For decades, the mix power generation in Mindanao consisted of the base load hydro-electric plants which are highly susceptible to the changing water level, the expensive peaking diesel and the geothermal power plants are the main sources of electricity in the island. With its capability to supply about 15 per cent of the island's power requirements, the Mindanao Power Plant, the first of its kind in the region, will provide the much needed additional reliability and stability to the Mindanao power grid.

Eugene Bicar, Assistant Vice President for Mindanao Systems Operations of the National Transmission Corporation, said that despite the entry of the coal fired powered plant, Mindanao would is still in dire need of more players in the power industry as the island sees an increase in its power demand due to the projected entry of mining firms, steel manufacturing, and other industries that would require heavy loads of electricity.

STEAG is Germany's 5th largest power producer with a combined installed capacity of about 9,000 megawatts including the foreign power plants located in Turkey, Columbia and now, the Philippines.

Established at a cost of US$305 million, the Mindanao Power Plant is considered as one of Germany's big ticket investments in the Philippines and is providing a highly positive business outlook not only for Mindanao but the entire country as well.

It is the first project in STEAG's history to utilize global sourcing, with materials and equipment supply coming from at least 14 countries all over the globe, including Canada, Finland, France, the Netherlands, Singapore, South Korea, Taiwan, the United Kingdom, the United States, Germany, Japan and the Philippines.

The operation of the 210 MW Mindanao Coal Power Plant has tremendously increased Mindanao's grid's system reserve margin from a critical 13.2 percent to 24.6 percent. The required energy reserve margin in Mindanao is 21 percent. And it has resulted to less utilization of oil-based plants in the island from 26-32 percent to 13 percent.