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The economy is growing at a higher rate than
expected. This means increased consumption of fuel and electricity.
Some concerned representatives of the electric power industry in
Cebu are already sounding the alarm.
Last 2003, Cebu and the entire
Cebu-Negros-Panay (CNP) grid faced a power shortage. The supply
deficit then was a result of the delayed construction of the
Leyte-Cebu Interconnection Uprating Project.
Today, another crisis is being
predicted to hit the region unless additional capacity is added. The
total demand in the Visayas (including Leyte and Bohol) is 1,423
megawatts, while total capability is 1,133. Cebu doesn’t generate
enough electricity to meet its own demand. The province relies on
power supply from Leyte ’s geothermal plants. Cebu ’s demand for
electric power as of August 2007 is 495 mw while Cebu-based
production is 373 only. Bohol, like Cebu, depends on Leyte.
Korean KEPCO has yet to start
construction of a 200 mw coal-fired power plant. The company was
reportedly waiting for Cebu ’s biggest power distributor, the
Aboitiz-owned Visayan Electric Company, to sign up for a long-term
supply contract, but this didn’t materialize. VECO was and is not
contented with the terms offered by the Koreans.
Negros Island, which has
traditionally produced more electricity than it consumes, has a mere
five megawatt reserve, one reason being Northern Negros Geothermal
Production Field is producing 10 mw only instead of the projected
49. The well or drill tunnel collapsed as a result of sideways
rather than vertical drilling from the surface to the hot rock in
the underground, due to problems with surface landowners, some
industry insiders claim.
Panay Island is enjoying a small
reserve: 28 mw compared to a 230 MW demand, but much of its power
supply comes from expensive diesel power plants. In addition, three
power barges supply almost 25% of the island’s power. The national
government also promised Cebu some power barges, but the power
barges that would have been deployed to Cebu are reportedly locked
up in litigation.
Leyte is generating electricity
for Luzon and the Visayas. The island’s total generating capacity
is 595 mw, with the CNP grid getting 330, Bohol 25 and Luzon 225
megawatts. However, even if Luzon wouldn’t need its share of
Leyte’s power production, it would take another expensive
submarine cable to divert the electricity to Cebu. The combined
capacity of the two existing cables is only 330 mw. It would take
years before another submarine cable could be in place. Existing
cable capacity to Luzon, Bohol and CNP exceeds the net production of
Leyte ’s geothermal fields (total production less Leyte-Samar
demand).
When the national government in
2002 ordered Napocor to put a cap on its power purchase adjustment,
consumers rejoiced—but some power producers were on the verge of
bankruptcy as their selling price was pegged at a percentage of the
Napocor rate. The Cebu Private Power Corp. threatened to shut down
amidst heavy losses incurred when it was forced to sell the
electricity that its diesel-powered plant produced, at a lower rate
than the cost of production. The company was literally running out
of cash.
A solution was found to CPPC’s
problem, but industry players see the national government’s policy
of subsidizing the cost of electricity—at the expense of Napocor
and thus the taxpayers—as a path to future power shortage. For as
long as power rates are not reflecting the true cost of generation,
no new investors will come in. Setting up power generating plants is
costly and takes years.
Nuclear-power sector players
would face the same problem of an unattractive rate setting. In
addition, nuclear power is definitely not the solution to meeting
future electric power demand—the Philippines being located on the
Ring of Fire should be enough reason to shelve such plan. Last year
an earthquake in Leyte shut down the geothermal plants. The safety
systems worked and the automatic shutdown of operations, while
resulting in a blackout in Cebu, prevented damage to the plants.
Last July the residents of Kashiwazaki, Japan, got a big scare when
a strong earthquake caused a fire at the nearby nuclear power plant.
Though no immediate danger (radiation) was reported, do we know
enough about long-term or compounded impact on nuclear power plants
of many earthquakes, big and small, over the years? Meeting
tomorrow’s electric power demand calls for immediate but sober
plans and action.
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