ABCI eyes 2016 rollout for additional 30MW peaking power for Mindanao

Jun 22, 2015

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Publicly-listed A Brown Co. Inc. (ABCI) expects to roll out an additional 30 megawatts of peaking power capacity in three areas of Mindanao by next year through its power subsidiaries.

 

During the ABCI Annual Stockholders Meeting (ASM) held Friday, June 19, at the Xavier Sports and County Clubhouse at the ABCI’s flagship real estate development in Xavier Estates, Cagayan de Oro City, company officials disclosed it would spend P14.5 billion for new and expansion power infrastructure in Mindanao over the next 24-36 months.

 

Peakpower Socsksargen Inc power plant in General Santos City (photo courtesy of ABCI)

Peakpower Socsksargen Inc power plant in General Santos City (photo courtesy of ABCI)

“The projects will be financed through a combination of self-generated equity, joint ventures and partnerships, and financing,” said Roel Z. Castro, executive vice president.

 

In a statement released earlier to media, ABCI said its power generation businesses are located in areas where there is a shortfall in supply, coupled with long-term off-take agreements.

 

“The 20.9-MW bunker-fired Peakpower Socsksargen Inc. (PSI) in General Santos and the 5.2-MW Peakpower San Francisco, Inc. (PSFI) in Agusan del Sur are currently running at full capacity. A third plant, the 10.4-MW Peakpower Bukidnon, Inc. (PBI) is scheduled to begin operations by the second half of 2016. Future project plans include a 15-MW and a 5-MW expansion in General Santos and San Francisco, respectively.”

 

In his keynote speech during the blessing and inauguration of the 20MW bunker-fired power plant of PSI at Bgy. Apopong, General Santos City last November, Energy Sec. Jericho Petilla said he was worried there are not enough peaking plants in the Mindanao grid.

 

“While there will be many new plants opening soon in Mindanao, most of them are baseload plants,” Petilla said. “I’d like to encourage more peaking plants because in the end, you cannot just rely on baseload plants. There will never be enough if there is no demand and you’re left with the peaking part hanging.”

 

The Department of Energy’s latest list of upcoming power projects show that while there are many base load power plants expected to be rolled out in the next 15 years, only 90 megawatts of the projected 500MW peaking energy requirements from 2015-2030 is now online.

 

Thus, even if new plants are coming in, Petilla fears this is woefully inadequate since most of the new plants would be tied down by bilateral contracts with distribution utilities and industries.

 

“In the future we will need many plants across cooperatives because that is the best way to make adjustments when our demand and supply don’t match every now and then,” he said.  “This will also encourage IPPs like Peakpower to set up merchant plants if they like the way the market is behaving.”

 

 “Through a 15-year Build-Operate-Maintain and Transfer Agreement, PEI will provide brand-new bunker fired engines to address the peaking requirements of qualified electric cooperatives,” said Mr. Castro, who is also president and chief executive officer of PSI. “We chose the Wartsila because of two major things: it is very fuel efficient and environmentally compliant, using cleaner Euro 4 compliant bunker fuel from Shell.”

 

“Mindanao already has 101MW capacity of diesel/bunker fueled peaking plants which will be operational by year end (2014),” said Rep. Edgardo R. Masongsong (1-CARE Party List) during his keynote speech at the San Francisco launch. He said embedded generation plants for DUs cut down on transmission costs and cushion the rate impact on the consumer.

 

“Peaking plants with a load factor of 30 percent running 5-6 hrs a day during peak demand do not significantly affect the price of electricity for the consumer,” he noted.

 

Architect's rendition of Peakpower Bukidnon, Inc power plant (photo courtesy of ABCI)

Architect’s rendition of Peakpower Bukidnon, Inc power plant (photo courtesy of ABCI)

ABCI subsidiary Peakpower Bukidnon Inc. signed a power purchase & transfer agreement (PPTA) with the Bukidnon II Electric Cooperative Inc in August 2014. The Contract terms include a Build-Operate-Maintain-Transfer scheme for a cooperation period of 15 years under which PBI would build, operate, maintain and transfer a power plant with 2 units of Wartsila V32 Diesel/Bunker-Fuel engines feeding 10.4MW to BUSECO. The project aims to address the 11MW shortfall in BUSECO’s present peak load of 35MW.

 

Its PSI Socsksargen expansion project in General Santos City would provide 10% of 130MW demand of the SOCOTECO II franchise area. PSI and SOCOTECO signed a PPTA last Feb. 2015 for the 13.4 MW expansion under a Build-Operate-Maintain-Transfer scheme covering a cooperation period of 15 years. Construction for the installation of the additional 2 two units of 6.7MW V32 Wartsila Diesel/Bunker Fuel engines is ongoing with target commercial operations by December 2016.

 

A similar 5MW expansion project is now under construction at the PSFI San Francisco power plant which will supply 17% of the 30MW demand of the Agusan del Sur Electric Cooperative (ASELCO). The two parties signed a PPTA last December 2014 for a 15-year cooperation period and target commercial operations by December 2016.

 

Meantime, ABCI also disclosed in its media statement the first unit of the 2 x 135-MW coal-fired Palm Concepcion Power Corporation (PCPC) in Concepcion, Iloilo is slated to be fully operational by early 2016.

 

“The project is in its advanced construction stage, possibly two months ahead of its delivery schedules,” says Mr. Castro. “Planning for PCPC’s second unit is also in the advanced phase. These projects would be able to provide reliable and stable power at competitive prices to regions where electricity supply is still inadequate.”

 

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