Mindanao power crisis may worsen in 2013

The power supply situation in Mindanao during the summer of 2013 remains highly critical and may possibly mirror the 10-hour power outages experienced in 2010, unless the government is able to successfully pull off all the measures needed to plug the shortfall.

It is also critical that the projected El Niño or drought next year will not be as worse as what happened in 2010, during which the capacities of the Agus and Pulangi hydropower plants—which provide half of Mindanao’s electricity requirements—were reduced to roughly 10 percent of their original capacities.

Joseph Nocos, vice president for business development of Conal Holdings Corp., said in a presentation Wednesday that it was crucial for the government to be able to implement the planned Interim Mindanao Electricity Market (IMEM) next year and for publicly listed Alsons Consolidated Resources Inc. to acquire and start the rehabilitation of the 100-megawatt Iligan diesel-fed plant.

Power Barges 118 and 119, which are owned and operated by the Aboitiz-led Therma Marine Inc., will also be instrumental in ensuring adequate power supply for Mindanao during the summer of next year.

Nocos said that should weather conditions become more favorable, the IMEM, the Iligan diesel facility and the two power barges would be enough to avert any potential shortfall, especially during the elections this May.

Through the IMEM, the Department of Energy is hoping to free up as much as 360 MW in embedded capacity in Mindanao starting March 2013. The additional capacity is expected to help stave off the perennial power supply crisis that has plagued Mindanao in the past years given the island’s huge dependence on power generated from hydropower complexes and due also to the lack of fresh investments in new generation facilities.

This scheme is similar to the existing wholesale electricity spot market (WESM) in Luzon and Visayas, except that it will involve the so-called “interruptible loads.” The IMEM is expected to provide both local and foreign investors an assured platform where they can trade their excess electricity in Mindanao.

It was only recently that the Commission on Audit gave its approval for the sale of the Iligan diesel power plant to Alsons Consolidated, given certain conditions that should be met to effect the acquisition of the facility from the Iligan city government.

According to Nocos, Alsons was hoping to complete by November this year the negotiations with the city government of Iligan regarding the final acquisition price. Should everything be completed by November, the company expects to deliver the first 20 MW by December this year and ramp up the capacity to a full 100 MW within six months.

Alsons is spending P1.2 billion to rehabilitate the Iligan plant.—Amy R. Remo