The Mindanao Development Authority (MinDA) and Japan’s Ministry of Economy, Trade and Industry (METI) have identified priority areas of collaboration in renewable energy in the southern Philippines.
Among these projects are the rehabilitation of the Agus-Pulangi Hydropower Complexes, improvement of the disaster resiliency of power distribution networks, the promotion of geothermal and wind power, enhancement of electricity distribution in areas with low electrification rates, such as in the Basilan-Sulu-Tawi-Tawi (BASULTA) area.
Japan is prepared to offer two-step loans for such projects while feasibility studies will be offered as grants. A two-step loan is one where funds pass through a commercial bank or other financial institution before being released to the end-beneficiaries. Technical experts will also be made available through the Japan International Cooperation Agency (JICA).
“While it is truly worth noting that we are now entering an era of excess power supply in the island-region, it is then crucial to shift our focus from supply deficiency to the cost of generating electricity,” MinDA Chairman and Secretary Datu Abul Khayr Alonto said during the recent Mindanao Power and Energy Seminar held in Davao City.
He added that recent investments in Mindanao’s power sector has assured the island-region of an excess of 1,000 megawatts (MW) as of December 2016, easing fears of a lack of supply to meet the projected growth in demand and required reserves.
The rapid growth of the manufacturing, real estate, services, and agri-business sectors however, resulted to a surge in demand for electricity. Projected demand for 2016 was at least 500 MW. By 2020, there would be a need for another 500MW, and by 2030 an additional 1,600MW.
The entry of more fossil-fuel based power plants, particularly coal, is projected to raise the cost of electricity in the island-region. Power generated From this source now accounts for 69 percent in Mindanao, with coal accounting for 40 percent. Shares of hydro, geothermal, solar and biomass accounted for just 31 percent of the total power generated.
“We have been pushing for investments in renewable energy by fast-tracking the application process from three to five years down to two to three years through our One-Stop Facilitation and Monitoring Center (OSFMC),” Alonto said.
To promote the use of renewable energy and lower electricity rates, METI proposed the introduction of wind power plants in viable areas in North-Eastern Mindanao, particularly in the province of Surigao including the islands of Dinagat and Siargao.
MinDA Deputy Executive Director Assistant Secretary Romeo Montenegro emphasized during his presentation on the state of Mindanao’s power sector that “the entry of more RE sources of energy will help ensure that Mindanao’s electricity rates remain the most competitive in the country.”
The METI is also proposing for the use of small-sized geothermal power plants in the range of 2-7MW as these can be built faster and at lower cost.
“In line with the effort to increase the region’s RE capacities, MinDA is also lobbying for the rehabilitation and uprating of the Agus-Pulangi Hydropower Complexes (APHC), both of which used to provide over 70 percent of Mindanao’s power requirements,” Montenegro added.
From its original combined installed capacity of 982MW, the APHC can now only be depended upon to produce a maximum of only 750MW. Currently, both complexes are producing 680MW, far below their potential without the necessary power plant rehabilitation work.