Whose fault is Mindanao power crisis?

The recurring power shortage problem in Mindanao can be blamed on Min-danao politicians. Their focus on the short term self interest had been at the root of the recurring crisis for years. I remember from my stint in the energy ministry 30 years ago that they have opposed plans to interconnect Mindanao with Luzon and Leyte because they don’t want to pay a grid rate higher than their essentially low cost hydro power.

While that is understandable, the Mindanao politicians ignored the need for greater system reliability from a multiplicity of power sources that interconnection will bring specially during the dry spells. Well, those were the days before climate change and they must have thought that the good times will never end. But it did end and with devastating results for them.

I have been asking around what is going on in Mindanao’s power situation and I found out the situation has not changed. The problem is still with local politicians. Efforts to improve the situation there have met problems at the local level. Things won’t start to get better until they cooperate with efforts to help them.

First of all, the most basic reality is that Mindanao is short of power, not that much but short nevertheless. It does not have enough generation to meet the peak demands and the ideal reserves to keep the grid stable. They need to build base load plants fueled by other power sources to augment the hydro system.

Agus and Pulangi have delivered spectacularly in the past but they now have their challenges. If you open the throttles on Agus you will flood the Balaoi plains. Pulangi is run of river so it depends on rainfall. There have also been proposals to spend a few billions dredging the main area. In the short term, dredging can improve generating capacity and alleviate the 180MW deficiency within the next year or so. But the silt will be back in two to three years because the surrounding areas are so denuded. When the rains come the topsoil will flow down with the rains and the silt is back. The real solution is a full watershed management program including a livelihood component so the local residents will not cut down the trees for subsistence revenues.

It is also possible to build the correct infrastructure to mitigate the floods and maximize Agus generation but there are problems getting local permits. As if the proposals were not meant to help their communities, local governments have made it difficult to get anything done unless they get many other things.

There is probably nothing wrong with demands for a water system here and a school there. But if the total cost of the project balloons because of all the other “requirements” it would be difficult to get the project through NEDA and any logical project evaluation process.

It is also possible to add a few megawatts of generation by fixing the equipment and rehabilitating the complex. Like any Napocor facility, lack of budgets prevented them from adequately maintaining these power generation assets.

The experience with the privatization of Pantabangan showed that a private owner was able to extract more juice from the existing facilities simply by rehabilitating and properly maintaining the same power generating equipment neglected by Napocor. A decision ought to be made to privatize Agus and Pulangi. Maybe a private sector owner can replicate what happened at Pantabangan and at Transco when the necessary expenditures to rehabilitate and modernize facilities were made.

But if the decision is not to privatize yet then government must find the resources to undertake the rehab right away. Anyway, the value can be recovered when the decision to privatize is finally made.

According to official sources, their calculations indicate that the shortage in the short term can actually be reduced to around 40 MW if all generating capacity is dispatched and a few adjustments made on the ancilliary/reserves requirements to the lowest possible safe level. This 40 MW shortage happens only during peak hours which are about two to three hours a day.

I am also told there is extra generation capacity in Mindanao that is waiting to be contracted and then nominated so they can be dispatched. The problem, I am told, is that some distribution utilities/electric cooperatives did not sign enough generation contracts. This is why some areas have brown outs and some do not.

Probably, the problem can be traced to the shaky finances of some coops. The management of many electric coops, not just in Mindanao, has long been rather bad. But today, they can no longer just keep on piling debts with Napocor and private generators demand a good credit record. Here in Luzon, the coop in Albay found this out the most difficult way recently.

It would seem that there are enough potential sources of alternative power during the dry season but the coops and the consumers in Mindanao must be willing to pay the higher cost. There is the 100MW power barge that is not being utilized because it is only partially contracted but often not nominated so it cannot be dispatched. There is another 200mw of possible power barges willing to move to Mindanao but afraid to because they too may just sit there not generating.

There is also the 100mw Iligan diesel that cannot be operated because of complex issues with COA.  Looking into the future, there is over 300MW of coal plants wanting to start construction but unable to get permits from local governments.

The other problem is that the Mindanao grid is supposed to operate on voluntary curtailment. Problems arise if a power distributor is advised to curtail but he does not so he consumes the power that should go to someone else. NGCP should be instructed to force curtailment if voluntary doesn’t work.

The other thing has to do with environmentalists. Coal is controversial but Mindanao doesn’t really have much of a choice whatever some people say. Here is the reality: the climate change model from government and private sector scientists indicates Mindanao will have reduced rainfall in the future. It is no longer possible to bet on hydro as the island’s primary power source. They simply have to recognize the need for non hydro base load generation and today, that’s coal.

Let us not even talk about that proposal for a 100mw solar power plant as the solution to Mindanao’s problems.  The peak demand of the Mindanao Grid is early evening when the sun is not available. That 100mw will be there at the wrong time. We still do not have technology that can store solar power at an economically viable price. Even with that 100mw extra there will still be brownouts because the shortage happens when there is no sun.

Well, the solution of Mindanao’s problems is in the hands of its local politicians. It is easier to blame officials in Manila or NGCP. There are solutions on the table but Mindanao officials have to want to be helped for real solutions to happen. Otherwise, they shouldn’t complain about their 8 to 10 hour brownouts. –Boo Chanco (The Philippine Star)