A Sustainable Energy Paradigm for Mindanao: The People’s RE Power Development Plan
The power generation sector of the country’s energy industry need not be completely privatized, after all. Neither does it need fossil fuels to make it affordable and sustainable.
The Mindanao Coalition of Power Consumers (MCPC) will present the “People’s Renewable Energy Power Development Plan for Mindanao” as an affordable and sustainable alternative to the Department of Energy’s (DOE) Mindanao Energy Plan during the Mindanao Congress of the Advocates for Renewable Energy and Rural Electrification and Development (MinCARED 2013) scheduled on May 27-28, 2013 in Cagayan de Oro City.
During a press conference held 18 May 2013 at a local restaurant to promote MinCARED 2013, Engr. David A. Tauli, one of the congress speakers presented the alternative development plan which features Renewable Energy, Local Government ownership and Official Development Assistance (ODA) financing.
The people’s Renewable Energy Power Development Program envisions the implementation by LGUs and other government entities in Mindanao of 2,500 MW of mostly run-of-river hydro power plants, and 800 MW of pumped hydro storage power plants, for the period 2016 to 2025.
The projects will be done by the LGUs in partnership with private hydropower corporations, who will undertake the construction, operation and maintenance of the hydro plants. As project owners, the LGUs would simply receive the earnings from the hydro plants. Current fiscal incentives accessible to LGUs provide for a preferential bias to RE technologies and projects which are environmentally sound.
“Since LGUs can undertake their own energy projects under the Local Government Code, they have access to very cheap development grants and loans which make it very much cheaper for them to develop indigenous energy supplies,” Mr. Tauli noted. “Since LGUs are not profit-oriented, they can afford to pass on these savings to the consumers.”
Compared to the large-scale corporate, bank-funded and privately owned coal-fired power plants now under construction all over the islands, Mr. Tauli said LGUs can undertake RE projects at a fraction of the cost of the private sector and can afford to pass on the savings to consumers.
“I am not ideologically opposed to coal power plants. I am just saying that in considering solutions to the Mindanao power problem, all options should be taken into account, and not only coal,” he added.
“The delivered cost of electricity from these coal plants under construction will be at least PhP 7.00 per kilowatt hours (kWh) by 2015-2016 when they come into operation. From 2016 onwards, power supply from hydroelectric power plants will be available that will cost at most PhP 4.00 per kWh. Those built under the FIT scheme will cost much less at P0.004 (four centavos) per kWh from all 280 MW of hydro plants that will be built under the RE Law of 2008.”
One of the firms which own one of the coal plants under construction confirmed it has signed power supply contracts with various electric cooperatives, private utilities and commercial/industrial customers at the rate of PhP 5-5.50/kWh.
The DOE website states: “It is the government’s policy to facilitate the energy sector’s transition to a sustainable system, with RE as an increasingly prominent, viable and competitive fuel option. The shift from fossil fuel sources to renewable forms of energy is a key strategy in ensuring the success of this transition.”
Mr. Tauli said this alternative development paradigm for RE has already been successfully pioneered by the DOE and the Ifugao Provincial Government with the 200 kilowatt (KW) Ifugao-Ambangal Mini Hydro power plant which was commissioned last January 25, 2010 with the assistance of the e8 and one of its members, the Tokyo Electric Power Company.
The e8 is composed of 10 ten leading electricity companies from the global electricity sector which aims to promotes sustainable energy development through electricity sector projects and human capacity building in developing nations.
The project lies in the municipality of Kiangan, Ifugao province, some nine hour’s drive from Metro Manila. Kiangan hosts the Nagakadan rice terraces, registered as a UNESCO World Heritage Site, but outside of the World Heritage Site area that aims to preserve.
The $1 million USD projects expected to generate 1,450 megawatt hours (MWh) annually, or 18 percent of Ifugao’s total electricity demand. The power supply agreement between PGI and the Ifugao Electric Cooperative (IFELCO) was approved by Energy Regulatory Commission on July 2012 with a rate of PhP 3.62/kWh. This is expected to generate annual gross revenues of PhP 5.2-million (M) annually, of which PhP 1.476 will be allocated to the Rice Terraces Conservation Fund.
The project is entirely funded by e8 and the financial model is based on a financial contribution of $1,000,000 USD by the e8. The Memorandum of Agreement between the Philippine Department Of Energy, the Ifugao Provincial Government and the e8 stipulates the project facilities will be handed over by a deed of donation upon commissioning, first to the DOE for a transition period and then to the Provincial Government of Ifugao who will ultimately have the full ownership of the assets, once the conditions for the transfer defined in the terms of the agreement have been met.