DOE more concerned about oversupply of power in Mindanao

Mindanaoans may be worried about having enough power supply now and in the future but the Department of Energy (DOE) seems to be more worried about the oversupply rather than shortage of power in Mindanao once all the power plants are completed and operating by 2015.

“The companies, when they see an oversupply of power and lesser demand then they will delay the implementation of the projects,” Energy Secretary Carlos Jericho Petilla said in a press conference at SM Convention Center in the city Friday.

Even President Benigno S. Aquino III was confident when he announced Thursday during the opening of the 22^nd Mindanao Business Conference that “Right now, we are on track to end the energy deficit by 2015—during which we foresee Mindanao to already have a surplus.”

The recurring power problem in Mindanao is one of the main concerns of the business sector which confirmed that this is one of the issues that has always been included in the annual business conference. Minbizcon conference director John Gaisano said that “unless the national government addresses this concern this will be a recurring theme in the next business conferences.”

Petilla said unless the power investors delay their projects when they see an oversupply, Mindanao will definitely have a power supply surplus by 2015.  Most of the power projects eyed by the government to solve Mindanao’s power woes are reliant on coal.

Among the major projects being eyed by the government to provide surplus power supply in Mindanao is the 300-megawatt Aboitiz (Therma South) owned coal-power plant in Davao City. First phase of the project, with a 150-MW output, is expected to be completed by third quarter of 2014.

Coal power plant

Petilla also mentioned the 200-MW power plant being built by the Sarangani Energy Corps (Alsons Group of Companies) in Maasim, Sarangani Province which can supply the power demands General Santos City, South Cotabato, Sarangani and other Mindanao areas.

“Filinvest is also set to come up with a 270-MW plant but we are not counting them yet until they submit their papers,” he said. Filinvest Development Corporation (FDC) is set to construct a P30-billion coal power plant at the Phividec Industrial Estate in Misamis Oriental which is expected to initially general 270 MW of power by 2016. The second phase of the project eyes the production of 135 MW by 2018.

The government owned and controlled corporation Phividec Industrial Authority has signed a 28-year contract with the FDC in April this year for the lease of 84.4 hectares of land where the coal power plant will be located.

Petilla said SMC Global Power Holdings Corporation (San Miguel Corp) is also set to build a 600-MW coal power plant in Malita, Davao del Sur but will start with an initial output of 150MW by 2015. SMC president Ramon S. Ang informed the Philippine Stock Exchange last month (July) that SMC Global project just broke ground in time for the completion of the plant by 2015. Petilla however said SMC has not really started out full-blast.

He suggested the setting up of a smart and effective forecasting system taking into consideration the behavior of the people and their electricity consumption considering that power plants are big investments and they take some time to build.

Coal production in the Philippines

When asked about the possibility of the ban on open pit mining affecting the coal power plant projects, Petilla said that the ban is more of a local government unit policy than a DOE policy.

“We are not banning open pit coal mining,” Mindanao Development Authority (MinDA) Chairperson Lualhati R. Antonino said. She added that Semirara (Semirara Mining Corporation) is an open pit mine and supplies a huge percentage the total coal production in the country.

The country has scattered coal deposits in Cebu, Surigao and Zamboanga but the largest is in Semirara Island in Antique. As such, Semirara has been identified by the DOE as the largest coal producer contributing up to 92 percent of the local coal production. The Philippine Energy Plan (PEP) reported in 2006 that coal production has increased by 34 percent the 2003 level of 2.0 MMMT (million metric tons) to 2003 level of 2.7 MMMT.

The DOE website pegged the country’s coal consumption at 9.5 MMT in 2006, 73 percent went to power generation, 22.5 percent used in cement production and 3.75 percent for other industries.

While the coal power plants are facing opposition not only from environmentalists but also even from the LGUs with local legislations banning open pit mining, Mr. Petilla said that “if there is a national significance then the national government can step in.”