The national government is looking to utilize renewable energy in Mindanao by shutting down coal power plants and improve the capacity of the Agus River hydroelectric system, according to the Department of Finance (DoF).
In a virtual briefing on Thursday, Finance Secretary Carlos Dominguez 3rd said Mindanao is in a “unique situation,” where the area has insufficient power supply, while having a very large hydroelectric system that has not been maintained through the years, and is producing well below its capacity.
To address this, he said the DoF and the Department of Energy have developed a plan to improve the generating capacity of the Agus River system.
The finance department has said the rehabilitation of Agus as well as the Pulangi Hydroelectric Power Plant of the National Power Corp. will include the construction of a liquefied natural gas facility to ensure power supply in the country before the Malampaya Deepwater Gas-to-Power plants’ gas reserves are used up by 2024.
The power plants, supposed to generate a combined 900 megawatts, are operating at 60 percent of their capacities.
Estimates done in 2018 showed that about P54 billion ($1.07 billion) is needed to fix Agus-Pulangi, increase the power plants’ capacities by an average of 10 percent and extend its life by an additional 30 years. Once repaired, the power plants are expected to generate more than 1,000 megawatts.
“As we do that, we are also studying the possibility of setting up a fund to acquire all the coal power plants in Mindanao, with the idea of shutting them down as the energy delivery of the Agus River increases,” Dominguez added during Thursday’s briefing.
He said the government is working together with the Asian Development Bank to study the actual viability of the concept, which will require long term and low cost funds.
The Finance chief stressed the rationale behind the concept is that the government aims to source 90 percent of Mindanao’s power supply from renewable energy.
“You have to remember also that it is in the Saranggani province in Mindanao where we have the highest number of sunlight days in the Philippines, and together the Agus River project, we will probably be able to significantly reduce the operations of the older coal power plants,” he said.
“But again we are studying the economics of it, and we should be able to come up with a model by sometime in the third quarter of this year,” Dominguez added.