DAVAO CITY — Mindanao’s energy supply will soar in 2015 but this early, the government is warning consumers to “brace for an increase” in electric rates.
Romeo Montenegro, investments promotions director of the Mindanao Development Authority (MinDA), said Mindanao’s energy supply would enter into an “oversupply regime” as power producers exceed generation targets.
Montenegro in a text message to Davao Today said they “expect 300 megawatts (MW) from Aboitiz (Therma South), 105 MW Alcantara and Sons’ (Alsons) Sarangani Energy Corp and 150 MW from San Miguel Consolidated Power Corporation.”
“The supply excess would likely be from diesel because some cooperatives would be letting go of diesel (8-10 pesos per kilowatt hour) in favor of coal (5-6 pesos/kWh),” said Montenegro.
Sheena Duazo of militant group Bayan, however, said that “this is the problem with the government’s privatization of power.”
“They (private entities) invest in expansion but will surely make a profit of it,” said Duazo.
Duazo said that “majority of Mindanao’s people are still without electricity, especially in rural areas.”
“The oversupply is part of the government’s PPP (public-private partnership) projects in relation to attract or invite more investments in Mindanao like mining and plantations,” said Duazo.
Duazo said that this move “is not really meant to address the basic needs of the people to electricity but to meet the needs of businesses.”
With how much is the increase, Montenegro said it varies as electric cooperates (ECs) buy power supply from the grid “which is a mix of sources (hydroelectric, coal-fired power plants, geothermal, diesel), but they can contract more of coal than diesel. “
“The only part where they don’t tap from the grid is if they have their own embedded plant (diesel or hydroelectric or biomass),” he said.
He said that “every move to get from cheaper source is always expected” but “the hike in rates would be relative to each EC, depending on their portfolio mix.”
“The cheaper source they have, the lower rates are,” said Montenegro.
Mindanao’s main source of hydroelectric power is generated from government-owned Agus and Pulangi hydroelectric complexes in Central Mindanao.
According to the “UNBUNDLED RATES FOR MINDANAO GRID, P/kWh” table in the National Power Corporation (NPC) website, the “NPC Effective Rate” as of November 2014 is only 2.9633 pesos/kWh or at least half of the price of coal and a third of diesel.
President Benigno Aquino III has said during the Mindanao Power Summit in 2012 that because hydroelectric power supply is not “constant,” Mindanao residents have only “two choices: pay a little more for energy, or live with the lack of energy and the continuation of the rotating brownouts.”
MinDA has been targeting a 50-50 mix of renewable and fossil-fuel production in the island from the current 60-40 mix.
But MinDA also project that coal might actually get a 56% share in energy production.
The website of MinDA’s Mindanao Power Monitoring Committee shows that other coal-fired power plants such as the Sarangani Energy Corp. (200 MW, Sarangani), FDC Utilities, Inc. (20 MW, Maco, Davao del Norte) and Ramon Power Inc. (100 MW, Zamboanga City) are also targeted to run this year.
Mindanao’s power mix is still mainly sourced from renewable energy sources which is hydroelectric power (53.94%) and geothermal (10.12%), while fossil fuels sources are from coal (19.85%) and diesel (16.09%). (John Rizle Saligumba/davaotoday.com)