THE Central Negros Electric Cooperative (Ceneco) is optimistic that the Visayas-Mindanao connection project of the National Grid Corporation of the Philippines (NGCP) will spur positive competition among power producers and benefit consumers in the province, its top official said.
Ceneco president Roy Cordova Monday, August 21, said interconnecting Visayas and Mindanao is a welcome development for the local distribution utility as it provides them more options where to source out power.
He said that having access to the Mindanao grid could mean better power sharing, and that more industry players means more competitive price in the market.
“It is really our thrust not to just rely on negotiated contracts but through competitive selection process to source out power at a lesser cost,” Cordova said, adding that since Mindanao is rich in renewable energy (RE), mainly hydro, “it would mean cheaper electricity for consumers.”
The NGCP earlier said it has already started working on its Visayas-Mindanao connection project with an “indicative” cost of US$1 billion.
Its spokesperson Leonor Felipa Cynthia Alabanza said the transmission utility is committed to finish the project by 2020, two years earlier than its initial target of completion.
In April this year, the NGCP applied for approval to proceed with the Energy Regulatory Commission (ERC) after concluding the feasibility study in December 2016.
“The Visayas-Mindanao connection will be good for all consumers, including those in Negros Occidental, because it will widen the choice of local cooperatives for power suppliers,” Alabanza said, adding that they can find cheaper power as far as north of Luzon, and General Santos and Davao in Mindanao.
The project is a 72-kilometer submarine cable, which extends by at least 100-kilometer each in Zamboanga and Cebu sides.
This is on top of the Cebu-Negros-Panay 230 kilovolts Backbone Project, targeted to be completed also in 2020. It will translate to an additional transmission capacity of 800 megawatts between Negros and Cebu positioned to fully address line congestion problems in the Visayas.
“We want to make sure that the highways are wide enough to accommodate the ‘traffic’ to ensure that all available power will be transmitted to those who need it,” Alabanza had said.
For Ceneco, the Visayas-Mindanao connection is timely as one of its power supply agreements (PSAs) will expire by 2021. This is the 64-megawatt base load from Kepco-Salcon Power Corp. (KSPC), a coal-fired power plant in Naga, Cebu.
Cordova reiterated that the cooperative will prioritize RE sources for its future power requirement.
“Through the project, we can now consider exploring power supply contracts with hydro power plants in Mindanao,” he said, adding that “green” energy sources are cheaper because of value-added tax exemption and lesser fuel cost.
Ceneco had earlier said that preparatory measures are now being conducted, including a study on the need not only for replacement but also additional power requirements even amid existing power contracts.
“If there is a need for additional load for Ceneco prior to the expiration of its PSA with Kepco, we might resort to entering additional agreement with another firm, preferably renewable one,” Cordova added.