VECO, CEMEX ink power supply deal

CEBU, Philippines - To cushion the expected power supply shortage in Cebu this month, the Visayas Electric Company (VECO) and CEMEX Philippines recently signed a Power Supply Agreement recently aimed at minimizing power interruption.

The one-year interim power supply agreement allows CEMEX to supply VECO and the CNP grid excess electricity of 10-MW of power during peak hours from CEMEX’s own generating units.

VECO vice president for administration and customer service group Sebastian Lacson said the company is looking at a shortfall of between 10 to 20 MG this month.

Two 50-MW IPPs in Naga, Cebu have announced about a year ago that they will temporarily shut down operations due to regular maintenance.”

However, Lacson added that “these two IPPS will not shut down their operations simultaneously.”

Cebu’s power sector industry players like VECO are expecting a shortage of 10 to 20-megawatts (MW) of power supply this month as independent power plants (IPP) undergo a temporary shutdown of their facilities to begin their scheduled maintenance.

VECO and CEMEX’s agreement will immediately be submitted to the Energy Regulatory Commission (ERC) for approval.

“Although power generation is not the core business of CEMEX, we offer to supply VECO with excess generation capacity in order to help address the power shortage in the province,” said CEMEX Philippines President Sergio Menendez.

Menendez credits CEMEX’s power surplus from the company’s efforts to making its plants more energy efficient.

CEMEX, which is a global building material firm, is the third largest cement manufacturing firm in the Philippines.

The additional 10-MW of power from CEMEX, will help in view of the tight power supply situation in the Cebu-Negros-Panay (CNP) grid.

“The agreement will help address the power shortfall experienced by VECO’s customers in the past weeks. This will ensure the continued growth of Cebu by making reliable and efficient electricity available to commercial, industrial and residential users at all times,” Lacson said.

Based on estimates, the CNP grid has an average of 90-MW power deficit daily during peak hours, VECOs contribution is abut 15-20 MW, Lacson said.

Reportedly, the grid is now at a 30-percent deficit and this level is expected to worsen come December.

Earlier, VECO’s mother company Aboitiz Power Corporation (AP) announced that it is working on importing power supply from Luzon to Cebu.

As soon as AP completes the legality processes with National Grid Corp. of the Philippines (NGCP), and Energy Regulatory Commission (ERC), it will soon implement the planned power importation.

Initially, the company is planning to import least 10 megawatts during off-peak hours through the existing submarine cables connecting Luzon to Leyte and Leyte to Cebu to its sister-company Balamban Enerzone, but it is also looking at augmenting power supply in Cebu in offering this to different power distribution companies in the province, especially VECO, which is also partly-owned by the Aboitizes.