Power suppliers scramble to beat imminent shortage

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Sunday, May 25, 2014


CEBU -- Power companies are eyeing new generation plants in Cebu in preparation for a projected power shortage that could be critical in 2018.

First Gen, a power generation company, is looking for a site in Cebu, while Aboitiz Power has already laid the groundwork in Toledo City.

A Korean power company had inquired with the previous administration about the possibility of putting up a 400-megawatt (mw) power plant in the province.

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“All (power) companies have plans of putting up a new power plant,” said First Gen assistant vice president Ramon Corro.

Aboitiz Power Corp. is preparing to build a $750-million 300-mw coal-fired power plant in Toledo, which may be ready for commercial operation by the end of 2016 or early 2017, City Councilor James Yared Gaite recently said.

The present daily peak power demand in the Visayas is 1,580 mw, but the available supply temporarily dropped to 1,540 mw. That’s because three power generators underwent unscheduled shutdowns recently, said an official of the National Grid Corporation of the Philippines (NGCP). That situation compelled the energy department to declare a red alert in terms of power supply.

But the three power plants already resumed operations. Cebu alone needs 850 mw of power daily, more than half of power demand in the Visayas, said Energy Regulatory Commission (ERC) Regional Director Joel Bontuyan.

“The demand for power is increasing by five to 10 percent per annum, and that is 150 mw every year,” said Corro.

He said it takes three to five years to build a new power plant in the Philippines: three to four years for the actual construction and a year to comply with government requirements.

If one builds a power plant in an agricultural area, legislators would have to pass a measure converting the area from agricultural to industrial use.

The benefits of putting up a new power plant, however, are apparent. Corro pointed out that when the Cebu Energy and Development Corp. (CEDC) put up a power plant in Toledo, the demand for power suddenly increased. And when the Panay Energy and Development Corp. (PEDC) was built, economic activity in Western Visayas boomed.

“Once power supply becomes available, mosunod sab ang ilang business (investors follow suit),” said Corro.

DOE Visayas Field Office Director Antonio Labios earlier warned that all the new power plants should be in the power grid by 2015 or the region will experience a power shortage starting in 2016 and peaking in 2019.

Speaking before Regional Development Council, Labios said that more power plants are needed before 2019.  

The energy department’s Power Development Plan for 2009-2030 points out that based on their demand forecasts, the Visayas grid’s annual electricity requirement will increase by 4.6 percent until 2030.

“With this projection, the system needs a total of 2,150 mw additional capacities on top of the committed power projects, thereby assuming 2018 as the grid’s new critical period,” the plan said.

In April 2011, officials of the Korean Southern Power Co. Ltd. (Kospo) visited then governor Gwendolyn Garcia and asked about the requirements if they pursued a plan to build a 400-mw power plant. They showed up with their contractors from Halla Engineering and Construction Corp. and Jeong Sang Construction Co. Ltd.

They were told about the tax incentives, like a four-year income tax shelter, plus additional incentives for the use of renewable energy. But the Capitol so far has not received any update from the Korean firm. (OCP of Sun.Star Cebu)

Published in the Sun.Star Cebu newspaper on May 25, 2014.

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