La Niña: Worst is Yet To Come

CAGAYAN DE ORO CITY, Philippines (Mindanao Examiner / July 13, 2010) — The worst is yet to come. This is what the Philippine Exporters Confederation is warning everyone in Mindanao and the entire country not to be complacent in putting up mitigating measures against power shortages with the onslaught of the La Niña weather phenomenon.

The Philippine Exporters Confederation said now is the best time for the busines sector, especially the small and medium scale enterprises in the country, particularly in Mindanao and Luzon, to start reconditioning their old power generating sets.

“Electric power shortages in both islands [Mindanao and Luzon] are bound to get worse in the coming years before they get better,” said Lius S. Sicat, PHILEXPORT trustee for Northern Mindanao.

During a recent consultation meeting with exporters in Northern Mindanao, Sicat said that the business community has already warned the government as early as two years ago that Mindanao and Luzon’s reserve power generating capacity is “far too thin” and that “it was time to build those big power plants.”

This city, like other major urban centers in Mindanao, has been suffering an average of four-hour blackouts a day, which the National Grid Power Corporation of the Philippines has squarely blamed on the very low water level in the National Power Corporation’s hydro-electric dams in Bukidnon (Pulangi) and Lanao del Sur (Agus) provinces.

“Mindanao has been projected to suffer brownouts starting last year if no new plants are built and it did. Luzon was to experience the same this year. And it happened. Only the Visayas was spared because two companies built a couple of medium-sized power plants that went on stream this year,” Sicat said.

Jovy P. Batiquin, vice president and chief operations officer of the Aboitiz Power-owned Therma Marine Inc. , recently said in a media forum that Mindanao can no longer rely on its hydro-electric power plants if it is to sustain the robust economic growth of the island.

“You cannot use the hydro plants as your base load because you cannot be sure when the rains will come. And if they come, you are not sure if they are enough,” he said.

Batiquin said that while Mindanao’s economy is growing in double-digit numbers the past years, investors have been frustrated because of antiquated infrastructures that cannot meet their growing demand, such as the hydro-electric power plants operated by the NPC.

“Mindanao’s economy is growing very fast… but present supply of power in Mindanao is grossly insufficient to meet the current demand,” he said.

PHILEXPORT’s Sicat also said that since taking control of the government in 2001, the Arroyo administration “had not built a single big power plant in both Luzon and Mindanao.”

“Since it takes an average of three years to build a big natural gas plant like the Ilijan plant in Batangas and five years to construct a hydro-electric dam the size of San Roque in Pangasinan, blackouts will get worse in the next two to three years if the new administration does not move fast,” he said in a statement.

Annual projected average growth rate of the island from 2009 to 2018 is 4.41 percent, which when translated to electricity supply is a need of additional capacity of 90 megawatt per year.

“To address the power supply deficit for the next 3 years, there is a need to put up emergency generating units while the new base load plants are being constructed,” Batiquin said.

NGCP data showed that for the second half of this year, Mindanao’s forecast peak demand for electricity is an average of 1,349 megawatt per month but the island’s gross average reserve is only 81.1 MW per month.

According to Sicat, an investment of at least US$2 billion is needed to build the 2,000-megawatt generating capacity needed for Luzon. The same amount is needed to build two more 1,000-MW generating plants for both Visayas and Mindanao.

Because of the large amount needed to arrest the predicted widespread and worst power outages in the very near future, the newly-installed Aquino administration “must go on an aggressive investment promotion campaign to lure in investors to build the needed new power plants,” he suggested. (Bong D. Fabe)