Power crisis, port congestion still main concerns of businessmen

MANILA, Philippines - Businessmen are still pressing President Aquino to come up with more concrete solutions to the impending energy crisis, port congestion and even lower foreign direct investment compared with neighbors in the region.

During the Semiconductor and Electronics Industries in the Philippines Inc.’s 13th CEO (Chief Executive Officers) Forum and 118th General Membership meeting in Makati City yesterday, Aquino revealed time had run out for the administration to rent generating plants as Congress and the private sector were insisting on the use of the interruptible load program (ILP), which might not be enough to address a possible power shortage.

Aquino said he asked Congress to allow the government to rent two or three generating plants but this could not be an option anymore due to time constraints.

He said the diesel generators would provide about 300 megawatts but “unfortunately, there is a need of six months to install these facilities to include all of the civil works attendant to it – fuel tanks, the ports that will service, etcetera.”

“Congress has not given us that power as of yet; and of course, the emergency period or the critical period is from March, April, May, June and July next year. So that doesn’t seem to be an option at this point in time. We are running both Malaya 1 and 2 as an addition but as you know, these are very old plants. I am told, for instance, that spare parts for these plants are fabricated as opposed to off-the-shelf items,” Aquino said, referring to the thermal power plant in Pililia, Rizal.

Aquino said the government was cautioned against utilizing the thermal plants to their full-rated capacity because doing so will only create more problems.

He said the thermal plants need about two million liters of fuel per day, and the capacity to re-supply these fuel farms runs at 600,000 liters a day.

“Now, if you run them at full capacity of about, again, about 300 or so megawatts each, there is a 90 percent probability that they will conk out. Running them at about 230 (MWs) will give us, again, a 50-50 chance for them conking out. So, we will have about 120 megawatts for each one,” Aquino said.

The President said there were other re-conditioned or workable plants that were being operated, such as the Millennium Energy Inc. power plant in Navotas.

“We are told that this will be online by the critical period. I think they’re starting by March. It will provide about 210 megawatts,” he said.

Aquino said Congress and some members of the private sector were “very inclined to just utilize the so-called interruptible load program.”

“My caution was these backup generators are precisely that – backup generators, not base load plants. And there is no assurance that – I’m just trying to give you the picture as I see it so as not to raise false hopes. The reason we wanted the plants, the base load plants, was precisely because they have demonstrated capability to produce the attendant power,” Aquino said.

“Unfortunately, the cost is also high; between P6 to P12 billion of something that we hope we will not utilize. But it is better to have and not need than to need and not have.”

Aquino noted more sectors are urging the government to give the ILP a try.

“The main issue is really the occurrence of forced outages and the graphs presented by the Department of Energy point out that there is really a substantial danger and that there are too many of these; some of the newer plants were not producing the rated capacity they have been de-rated. And we would not want to be able to say that we prepared for the worst and we hoped for the best,” he said.

Aquino expressed hopes that all these steps that were being taken would suffice and that there would be a “mild or nonexistent El Niño situation next year so that “we will not produce the emergency situation and that we will all have the necessary power.”

In terms of bringing down prices, there are already three companies that are embarking on what is termed “merchant” as opposed to lock-in power contracts, Aquino said. – With Delon Porcalla