Brownout worsens in Luzon, Mindanao

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Thursday, March 4, 2010

POWER supply situation in Luzon and Mindanao further slide down after more power plants went offline due to low water elevation as a result of the El Nino phenomenon.

As of 5 a.m. Thursday, the National Grid Corporation of the Philippines (NGCP) reported that Luzon posted a generation deficiency of 446 megawatt (MW) while Mindanao’s insufficiency hit 650 MW.

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This even as President Gloria Macapagal-Arroyo said she would adopt the proposal of Energy Secretary Angelo Reyes to declare an energy crisis in Mindanao.

According to power retailer Manila Electric Company (Meralco), the generation deficiency resulted in one hour rotating brownout in their franchise areas in Metro Manila and other parts of Luzon beginning 10 a.m. to 5 p.m.

Joe Zaldarriaga, external communications manager of Meralco, said other areas affected are Batangas, Bulacan, Cavite, Laguna, Pampanga, Quezon, and Rizal.

NGCP noted that the shortage was compounded further by the outage of the Magat hydroelectric plant owned by the Aboitiz Power Corporation.

Magat was running at 30 MW Wednesday but due to low water reservoir it totally went off line.

Contributory to the supply shortage situation is the CBK hydro plant where only one unit is running.

“Only one unit of CBK Power Company's Kalayaan hydro-electric plant is expected to run at 152 MW in the morning and afternoon. By evening, two units will already be operational. A third unit is still unavailable because of low elevation at Caliraya Lake,” the NGCP said.

Luzon’s peak demand hit 6,842 MW higher than the available capacity of 6,408 MW.

Mindanao grid situation however was even worse than Luzon after its generation deficiency was placed at 650 MW due to higher demand of 1,361 MW.

NGCP said capacities of hydro-electric power plants continue to be limited in Mindanao due to a very low water inflow to their reservoirs brought about by the dry spell.

It also reported that STEAG Power Inc.'s coal-fired power plant reduced its capability from 210 MW to 150 MW contributing further to generation insufficiency in Mindanao.

Mindanao is suffering from a minimum of five hours to 12 hours brownouts daily, according to the NGCP.

In some areas like in Mati in Davao Oriental, however, brownout had reached up to 24 hours.

Secretary Reyes on Wednesday said they are now closely monitoring the dams in the country especially in Mindanao due to indications of receding water levels in the reservoirs.

On contrary, NGCP said the situation in Visayas remains stable with the expected reconnecting to the grid of several plants namely Panay Diesel Power Plant 1 (13.5 MW), Panay Diesel Power Plant 3 (45 MW), Cebu Diesel Power Plant 1 (28 MW), Power Barge 101 (10 MW) and Power Barge 102 (15 MW).

Energy crisis

Arroyo announced her decision to adopt Reyes’s proposal to declare an energy crisis in Mindanao at the sidelines of Metrobank Foundation’s search for The Outstanding Philippine Soldiers (Tops) awarding ceremony in Malacanang.

This move would enable government to adopt measures that would generate more power for the Mindanao like the operation, leasing or putting up of new power generating plants.

Press Secretary Crispulo Icban Jr. earlier said the President is determined to solve the problem in Mindanao and is already awaiting the inputs from Congress on how to go about the implementation of the recommendations.

Reyes on February 27 submitted a recommendation to the President for her to place Mindanao under a power crisis, which is needed to secure an exemption from the privatization of the power generation business mandated by the Electric Power Industry Restructuring Act (Epira) of 2001.

“Upon the determination by the President of the Philippines of an imminent shortage of the supply of electricity, Congress may authorize, through a joint resolution, the establishment of additional generating capacity under such terms and conditions as it may approve” he said, citing Section 71 or the electric power crisis provision of Epira.

This means the government could also lease or purchase generator sets (gensets) and barges or negotiate of short-term power supply contracts to increase the generating capacity of Mindanao.

Reyes proposed the leasing or rental of 160 megawatt (MW) gensets; the operation and maintenance of the Alsons Corporation’s 30-MW Iligan Diesel Power Plant 1 (IDPP); entering into an operation and maintenance agreement with Alsons Corporation for the 70MW IDPP2; and entering into a contract on an additional five MW from Southern Philippines Power Corp. (MW) - which is jointly owned by Aboitiz Equity Ventures, Conal Holdings Corp., and Tomen Power Corp. of Singapore.

According to him, the cost of these measures was placed by the National Power Corporation (NPC) at P8 billion to P10 billion, wherein the leasing or rental would depend on the length of the dry spell or until the rainy season starts in July.

The Department of Energy had reported that the power situation in Mindanao has worsened following the reduced capability by hydroelectric power plants like the Agus and Pulangui plants due to low water inflows as a result of the El Nino. About 56 percent of Mindanao’s power is sourced from hydroelectric power plants.

Cost recovery petition

For his part, Deputy Presidential Spokesman Ricardo Saludo urged the Energy Regulatory Commission to immediately act on the cost recovery petition of some electric firms following the increasing need for coal and fuel to ensure continued electric services.

Saludo said the concern of some electric companies is that it would entail additional expenses for them if they import to purchase additional fuel and coal supply to meet the power demand of the consumers.

But a grant of their petition would mean additional expenses for the consumers who would shoulder the additional cost.

“There is an urgent need, among other measures, for the independent Energy Regulatory Commission to act on pending cost recovery petitions, so that affected generating companies can cover higher fuel expenditures and this ensure uninterrupted fuel deliveries,” Saludo said.

He stressed that the administration “hear and share” the grave concerns of many sectors about the power supply situation in the country especially in Mindanao.

He said this is the reason why the Arroyo government had been giving priority on attracting private capital on power generation.

Saludo however said that the current El Nino problem, aggravated by preventive maintenance in some power plants, “has led to recent power supply shortages.”

He assured that the supply of the electricity would eventually stabilize, believing that power in Luzon and Visayas may improve within the month, citing ongoing maintenance operations on the Malampaya Gas Plant and the setting up of modular generating sets in the Panay region among others.

As this developed, President Arroyo will switch on Friday the first of three units of the 246 MW, coal-fired power plant of the Cebu Energy Development Corp.'s (CEDC) in Toledo City.

The switch-on ceremony signals the full operations of the 82 MW first unit and comes at a time when Cebu and other provinces in the region are experiencing rotating brownouts lasting up to two hours a day, causing work stoppages and inadvertent loss of income for businesses and individuals

CEDC’s $450-million or roughly P3 billion coal-fired power plant is a joint venture among Global Business Power Corporation (GBPC), the power arm of the Metrobank group, Formosa Heavy Industries Corp., Aboitiz Power Corp., and Vivant Power Corp.

Units 2 and 3 are expected to go on line by end of May and the end of December, respectively.

Geothermal production expansion

In light of the recent energy crisis, the Liberal Party standard bearer Senator Noynoy Aquino has declared that he will look into the feasibility of expanding the use geothermal energy in the country.

Aquino prefers to develop the use of renewable energy such as solar and geothermal rather than nuclear energy because of technological constraints.

“I’d like to preserve an open mind to the BNPP (Bataan Nuclear Power Plant) but I’m heavily biased against opening it as a nuclear plant. We have sources of energy solar, geothermal and now we have good ecological program. I will look at the nuclear power industry I am not certain we are ready to embark on it,” Aquino said in a press conference in Dumaguete.

Bataan Power Plant was completed but never operated. Aquino's mother, the late former President Cory Aquino, hindered its operation.

In the last Congress, Pangasinan Representative Mark Cojuangco pushed for its revival.

Aquino's opposition on nuclear energy arises from his concern about the possible dangers of its by-products.

The presidential bet said the Philippines should be the world's largest producer of geothermal energy. It is now the second largest producer with 1,900 megawatts of installed geothermal energy.

At the moment, there are geothermal power plants in Sorsogon in Luzon, Negros Occidental and Leyte in the Visayas, and Cotabato in Mindanao.

The Philippines, as an archipelago, has hydro-electric plants as its main source of energy.

Emergency powers

The opposition presidentiable is open to the possibility of conducting a special session in Congress to grant President Arroyo with emergency powers but said that Malacañang must first answer questions on the current power crisis.

While he agreed to a special session, Aquino posed doubts on the proposal to buy two large-capacity generators to address the energy shortage in Mindanao.

“(Generators) are expensive to procure, expensive to operate. In the last 2 minutes, it's too much of a midnight deal that we can't be sure of the intent,” Aquino said.

The House of Representatives has passed on committee level the motion filed by Cagayan Representative Rufus Rodriguez to call the Congress in a special session with an aim to encourage the President to apply Section 71 of the Epira.

Aquino also blamed the Arroyo administration for not preparing enough contingency plans against energy crisis.

“This is criminal negligence. We know that El Nino was going to visit the country. They knew that Mindanao was going to have a power supply problem. They should have mapped out a plan earlier on,” he said.

House Speaker Prospero Nograles earlier said that the NPC has foreseen the energy crisis in Mindanao since 2006, allowing the Congress to allot P500 million in contingency funds for the event.

“She (President Arroyo) has been in power for almost nine years, and yet here we are facing brownouts during a crucial election season,” Aquino said. (MSN/JMR/Angela Casauay/Sunnex)

Brownout worsens luzon mindanao

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