Saturday, June 5, 2010

FASTLANES: The Power Dilemma in Mindanao (1)

By BenCyrus G. Ellorin | Friday| June 4, 2010

1st of 2 parts

CAGAYAN DE ORO CITY (MindaNews/2 June) — The rotating brown out at the height of the El Niño drought has highlighted the very bad management of Mindanao’s power industry.

Such mismanagement can go as high as Malacañang. Despite all its pronouncement of putting Mindanao as priority development area, the nine-year Gloria Macapagal-Arroyo regime has failed in putting one of the most basic economic infrastructure — power generation.

Although she may be credited for closing the deal with financiers of the only power plant to augment Mindanao’s ageing hydro-electric power plants, the 200-megawatt dirty coal-fired power plant of Steag in Villanueva, Misamis Oriental in 2003, at best GMA’s role was ceremonial as the contract for the said Independent Power Producer was signed during the Ramos administration, with Mindanaoan Guido Delgado still president of the National Power Corporation.

I was at the helm of the opposition to the Steag coal-fired power plant and even brought our campaign right at the doorsteps of the international banks that financed the project, in the KFW headquarters in Bonn, Germany and the JBIC in Tokyo. Our argument then was that the construction of the coal-fired power plant entails a lot of social and environmental cost. We had batted then for cleaner sources of energy like hydro, wind, modern bio-mass and solar.

Of course, all is bridge over troubled water now and for development of the island to push, we need additional sources of energy. There are many offers, especially from the dirty coal and expensive petrol-based generators. Two clean options however are on the starting block and may have to be given the much needed go signal as soon as possible.

These are the 132-megawatt Bulanog-Batang hydroelectric plant in Besigan, Cagayan de Oro and Talakag, Bukidnon and the 300mw Pulangi 5 hydroelectric project in southern Bukidnon and North Cotabato. It was learned that the pre-development phase of the Bulanog-Batang project is already finished and the American Engineering Services, a Fortune 500 listed company, is getting ready to hit the ground running for the $300-million project.

The Pulangi 5 HEP, I was told, is almost done in its social preparations and pre-development stage and may start breaking ground in 2011.

With the power crises in Mindanao hitting a high note this summer with those 5-hour daily brownouts, many people are asking me what I thought of the power situation and whether our arguments 10 years ago about the power situation in Mindanao are still valid.

I would have to say that our critique before on the power demand forecast were right. Based on the Department of Energy’s forecast from 1995 to 2005, the power demand for Mindanao would increase by 9-11% per year. They based it on a Gross Domestic Product (GDP) + 1 formula, or to put it simply, if the GDP is 9%, the projected increase in power demand would be 10%. This of course is very faulty and inaccurate as the GDP rate was based on the medium term forecast which former NEDA head Dr. Cielito Habito said was almost always over-bullish as government economic planners want to project a robust economy to impress investors.

But real GDP for that period was 3-7%. Theoretically, there should be no power supply shortage even if no power plant goes online at that time.

Now, could it still be said of the present? I would say that the critique still stands, but we have to factor in the actual situation of existing power plants.

In the 1980s to the early ’90s, Mindanao was fed 95% by hydroelectric power from the Pulangi and Agus hydroelectric power complexes. It came down to 60% towards the close of the millennium and at present the hydroelectric plants can only supply a low of 20% to 30%. Although technically, the installed capacity of these plants can still be at 60% of the power demand. External factors like droughts and lowering water levels in the plants due to poor watershed management have resulted in drastic decrease of dependable capacity from these hydro plants.

The result of this power industry problem are twofold — brownouts and high power rates.

It is ironic that power rates have gone up despite brownouts which naturally redounds to lesser power consumption.

Mindanao’s power generation mix is hydro, geothermal, coal, bunker fuel and diesel.

While hydro is very cheap at below P4 per kilowatt of generated power, bunker and diesel are ranging from P14-20/kilowatt. Which means decrease in cheap hydro and increase in bunker and diesel equals high generation cost. Which is why when the electricity bill comes into our homes, despite the brownouts, we owe more to our utilities. (Part 2: The renewable solutions)

(The writer is a community organizer, environmentalist and peace advocate based in Cagayan de Oro City, Philippines. Comments can be sent to

*Published on Mindanews, Friday, June 4 2010

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