Electric rural coops prefer cheaper renewable over coal

Oct. 07, 2014

DAVAO CITY -The Association of Mindanao Rural Electric Cooperatives (Amreco) and the Mindanao Development Authority (MinDA) warned that the bulk of energy production in Mindanao starting next year will be sourced from coal-fired power plants by major energy industry players mostly based here in Davao Region.

MinDA Investment Promotions and Public Affairs Officer Romeo Montenegro estimated that some 2,000 mega-watts of coal-sourced energy will be produced by 2016, enabling it to power households and industries in Mindanao.

The companies that have ventured into coal are the 300-MW Therma South owned by the Aboitiz in Toril, another 300-MW plant operated by the Alcantaras in Davao del Sur. San Miguel Corporation is also building a 600-MW plant, FDC with 405-MW, and GN Power in Kauswagan with 540-MW.

Amreco President Sergio Dagooc, however, said that despite the entry of coal energy, rural electric cooperatives want to pursue a “balanced supply” between renewable energy source and coal.

Dagooc said a balanced supply is necessary due to the high cost of coal and fossil fuel.

“We don’t want to suffer like in Luzon where prices are affected by the prices of diesel and fuel,” Dagooc said. “There would be minimal increase if there is a mix.”

Montenegro said currently Mindanao has a 60-40 mix between renewable energy and fossil fuel energy, with 54% of the total supply coming from the Agus-Pulangi Hydro Power Plant.

He said with the current mix, energy rates based on hydro-power plants are charged with P1.50 per kilowatt hour. Bunker fuel costs four times more at P8 to P10 per kw/hr, and coal at P4 per kw/hr.

Montenegro said MinDA wants to avoid a reverse of energy source by making an effort to come up with a “50-50 energy mix” as outlined in their Mindanao Development Plan.

Montenegro said the entry of coal energy is inevitable with the “business as usual” scenario of investors, and the 90% reliability of this source as compared to hydro-power which relies on run-off rivers.

He said this mix also foresees the scenario of drought that will affect water supply.

The Agus-Pulangi 4 and 6 are also scheduled to be shut down next year for repairs with the entry of the Therma South and Alcantara plants.

Montenegro said MinDA and Amreco are pushing for the fast-tracking of some 157 applications into renewable energy by facilitating a one-stop application process to achieve a target of a 1,700-MW supply.

Montenegro said red-tape has discouraged investors into renewable.
“They have to go through 13 lead agencies and 169 signatures. That will take about three or four years,” he pointed out.

He said MinDA has made headways in cutting down the process by half of the usual length for application.

Both groups said this will be among the issues they will tackle in depth in their upcoming third Mindanao Congress of Advocates for Renewable Energy and Rural Electrification & Development (MinCARED) slated on October 29 to 31.

They are also pushing for amendments in the House of Representatives deliberation on the Electric Power Industry Reform Act (EPIRA) not to privatize the Agus-Pulangi Hydro-power plant. (Tyrone A. Velez, davaotoday.com)

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