Power group offers leasing of gensets

MANILA -- Malacañang may consider proposals of a Mindanao-based power producer consortium that seek to lease generator sets to ease the crippling power shortage in the country’s south.

Leasing generator sets was one of the measures considered by the National Government to mitigate power crisis in Mindanao, which was recently placed under state of calamity.

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The government earlier tapped the Mindanao Electric Power Alliance (Mepa) to create a plan on how to lease modular generator sets that would produce a total of 160 megawatts (MW) to solve Mindanao’s power crisis.

Mepa, composed of business chambers and power sector participants, presented Monday its proposals to several Cabinet members. Its proposals will be discussed at the weekly Cabinet meeting Tuesday, said Deputy Presidential spokesperson Gary Olivar.

“I assume we will be seeing a comprehensive proposal tomorrow (Tuesday),” Olivar said.

“Obviously, if there is a proposal and the government shows receptiveness, we are serious to include private sector in massive move based on the report of Energy Secretary Reyes,” he said, referring to the proposed measures set by Reyes that include shifting of business hours, supply augmentation program and transfer of a Luzon-based power barge to Mindanao to augment power credit.

However, former president of National Power Corporation (Napocor) Guido Delgado said in an interview that they have not yet decided about the quotation of leasing generator sets but projected that it will be more likely expensive.

“These (generator sets) would have to be diesel generator sets, much more expensive than power plants in Mindanao and Luzon,” Delgado said.

Delgado and other recognized experts in power sector, who were present during Mepa’s proposal presentation, will assist the government in its decision making process with regard the Mindanao power crisis.

“They are discussing what will have a fair return for them and the availability of credit support by the government, and in any case why should they use their power capacities in cases like this so if the government could provide support in that area, it could be helpful,” Olivar explained about the flow of the Mepa and Cabinet meeting.

The meeting was led by Executive Secretary Leandro Mendoza and attended by representatives from the Finance department and National Disaster Coordinating Council (NDCC).

The generator sets will be deployed in South Cotabato and Zamboanga, said Delgado.

He said they would take four to 45 days to carry out the measure if there will be no problems in financing.

“Twenty megawatts each (generator set). Right now, we’ve identified as much as 200 MW but that depends really whether the private sector can get financing from the banks,” Delgado said, adding that they are looking at US$200 million loan to be financed over a period of one year.

“That includes fuel. Not only the lease,” he explained.

The generator sets will be coming from Singapore, Australia and United States, the power expert said.

Delgado believed that this measure of the government will be worked out this week.

Mindanao has been impaired by rotational brownouts of eight to 10 hours due to serious dry spell caused by the El Niño phenomenon.

Earlier, the Manila Electric Company (Meralco) cancelled the rotational brownouts in Metro Manila and Luzon areas that were supposed to experience rotational brownouts between 10 a.m. to 4 p.m. and 6 p.m. to 8 p.m.

Visayas and Mindanao, meanwhile, will continue to suffer rotating brownouts, while Luzon power supply situation normalizes this afternoon, the National Grid Corp of the Philippines (NGCP) reported.

According to NGCP, Korea Electric Power Corp. (Kepco) reported to it that the Ilijan Power Plant is now generating 900 megawatt (MW) from the 450 MW capacity Monday morning, bringing Luzon grid enough reserve of 246 MW.

Another 300 MW is expected to be generated by the Ilijan Block A within the day and this is expected to further boost the power reserve from the Luzon grid.

Despite shutdowns of First Gas Power Corporation’s Sta. Rita units 10 and 30, which generate around 250 MW each; San Miguel Energy Corporation’s Limay unit 2 with a capacity of 90 MW, as well as Kepco Philippines Corporation’s Malaya unit 1 (300 MW) and unit 2 (350 MW), there will be no power supply interruptions in Metro Manila and other parts of Luzon.

The Luzon grid early Monday recorded a generation deficiency of 332 MW due to higher demand that hit 7,042 MW as compared to the available capacity of 6,710 MW.

As of 3 p.m. Monday, Luzon’s available capacity was placed at 6,980 MW as compared to peak demand of 6,734 MW.

In Visayas, power supply deficiency reached 163 MW due to the shutdown of Cebu Diesel Power Plant which used to supply a total of 25 MW in the island.

The Cebu Energy Development Corp. (CEDC) and Leyte Geothermal Power Plant (LGPP) unit 2, owned and operated by Green Core Power, are still on emergency shutdown.

Visayas registered a peak demand of 1,223 MW much higher than the available capacity of 1,060 MW.

Mindanao grid continued to experience generation deficiency of 632 MW Monday due to inadequate available capacities from the grid's main power sources -- National Power Corporation's hydro power plants where the reservoirs are all drying up due to El Nino.

Mindanao has recorded 1,437 MW peak load as against 805 MW available capacity. (Jill Beltran/MSN/Sunnex)