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Thursday, August 04, 2005
Santos Sr.: Averting Mindanao's dark days ahead
By Antonio R. Santos Sr.
MBC Updates
(First of two parts)
THE state of Mindanao's power situation has reached critical levels worthy of hoisting alarm signals.
There is a big issue with regards to the disparity of supply and demand in the region. Southern Mindanao, for instance, consumes 47% of Mindanao's generated supply yet much of the generation capacity (74%) is in the North.
Transmission problems remain to be the biggest hurdle in achieving a reliable power supply in the region.
With the onset of the Department of Finance's (DOF) reduction of National Transmission Commission's (Transco) capital expense, there are increasing concerns that current infrastructure cannot meet the quality or quantity of power.
Currently, the total dependable capacity of the region is 1,454 megawatts (mw). This demand, however, is seen to reach up to 1,371 mw--a figure that will grow
further to 1,615 mw by 2008, and 2,256 mw by the year 2014, representing an average annual growth rate of 5.9%.
The increasing power demand in Mindanao should be met immediately to prevent a power crisis that will further derail economic growth.
Transmission augmentation
According to the projections of the Department of Energy (DOE), the power supplied by our generating facilities may not meet the demand of the Mindanao economy by as early as 2006. The existing generation in Mindanao totals 7,087 gigawatt hour (gwh), as supplied by hydropower plants (60% share), oil powered facilities (27%), and geothermal plants (13%).
The business community has been persistent in the fast tracking of the completion of the Abaga-Kirahon 230 kv transmission project and the Kirahon-Bunawan 230 kv backbone project, which will address the power generation problems in the South.
The Transmission Commission (Transco) has pledged to provide two power barges (each generating 32 mw), which will be located in General Santos City and in the Davao Union Cement plant in Davao City to augment the power shortfalls in the mean time.
However, Southern Mindanao cannot solely rely on the transfer of these power barges and this should not be made an excuse to postpone the Transco project.
Considering the facilities' limited capacity and expensive cost, there will be concerns raised on its self-sufficiency and the likelihood of an increase in power rates.
Another batch of power generating projects will be launched by the start of 2007 that will generate an added capacity of 376 MW, however, these will not be operational once the power shortfalls hit the island.
The completion of the project should not be deferred further and its implementation should not be affected even by the downscaling of its project components as the project benefits far outweigh the costs.
The realization of these crucial projects will give the boost to investors' confidence in the region.
Armm's power situation
If there is one area in Mindanao that experiences the crisis on energy, perhaps the Autonomous Region of Muslim Mindanao (Armm) feels it the worst. Businesses in the Armm (especially in the Sulu Archipelago) are losing huge sums in their operations because of power outages, even preventing investors from coming to the region.
The power outages have been attributed to the non-payment of debts by the cooperatives in the area to Transco. Aside from increasing the collection efficiency of all electric cooperatives, the self-sufficiency of small power plants (mostly powered by oil), should also be ensured to increase their dependable capacity to address the Armm's power shortfalls.
Proposals to import oil from the Brunei-Indonesia-Malaysia (BIM) countries where prices are lower must also be explored (Jolo Governor Benjamin Loong, the 2006 Philippine Energy Plan (PEP) Orientation).
According to the DOE it is possible for the island provinces in the Armm to arrange purchases from say Balikpapan or Kula Lumpur.
Rural electrification
Along with the issue on lack of power generation facilities is the inequitable power distribution system. The Mindanao rural electrification situation shows that of the 3,109 barangays in the Philippines that are unelectrified, Mindanao has a share of 1,593 barangays, while Visayas has only 832 unelectrified barangays and Luzon has a much lower 684.
This brings the share of Mindanao to a staggering 51.24%, or more than half, of the entire unelectrified barangays in the country. Despite the cheap power rates and relatively abundant supply of energy in Mindanao, it is still a conundrum that communities in far-flung areas do not enjoy all these resources.
Certainly what these figures are saying is that there is a pressing need to increase the reach of electricity among Mindanao barangays. This involves increasing connectivity infrastructures and expanding the reach of viable alternative power sources.
For example, the Alliance of Mindanao Off-Grid Renewable Energy (Amore) Program has successfully installed power-generating facilities, through solar energy, in remote areas such as Tawi-Tawi.
MBC Updates is the official column of the Mindanao Business Council. For any comments and suggestions, please write us at MBC, 2/F DCCCII bldg., JP Laurel Avenue, Bajada, Davao City, or email us at mbcoffice@mindanaobiz.org
(August 4, 2005 issue)
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