News Feature: Peakpower addresses critical gap in Mindanao power mix

Dec 11, 2014

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A medium sized power company with roots in Mindanao is addressing a perceived gap in the island’s emerging power mix.

 

Hon. Edward P. Mellana, SP 2nd District Board Member representing Gov. Eddiebong Plaza cuts the ribbon with the assistance of Peakpower Energy Inc. Chair Dr. Walter W. Brown, ASELCO Board Pres. Corazon D. Collantes, Rep. Edgardo R. Masongsong (1-CARE Party list) and PEI President & CEO Roel Z. Castro (photo by Mike Baños, NPN)

 

In his keynote speech during the blessing and inauguration of the 20MW bunker-fired power plant of Peakpower Socsargen Inc. (PSI) in Bgy. Apopong, General Santos City 20 November 2014, 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 will not ensure a net addition to the capacity available to the Mindanao Grid since most of the new plants would be tied down by bilateral contracts with industrial 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.

Peakpower Energy 

To address this gap in the island’s emerging power mix, A Brown Co. Inc. (ABCI) through its subsidiary Peakpower Energy Inc. (PEI) was set up to implement at least 12 projects designed to generate an aggregate 110MW of peaking energy across various A+/Green-rated electric cooperatives in Mindanao.

 

“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

Roel Z. Castro, 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.”

 

Earlier last month, PEI inaugurated a 20.9MW peaking power plant for the South Cotabato II Electric Cooperative (SOCOTECO II) through its wholly-owned subsidiary Peakpower Socsargen Inc. (PEI) and its second project last December 8 in San Francisco, Agusan del Sur, a 5.2MW peaking plant for the Agusan del Sur Electric Cooperative, Inc.(ASELCO) through its subsidiary y Peakpower San Francisco Inc. (PSFI). It is set to roll out another 10MW peaking plant for the Bukidnon II Electric Cooperative, Inc. (BUSECO) by 2015 through another subsidiary, Peakpower Bukidnon Inc. (PBI).

ASELCO’s Example

 

“All distribution utilities (DUs) whether private or electric coops, should emulate what ASELCO has done by contracting for embedded generation of peaking plants to address the shortfall during peak demands,” said Rep. Edgardo R. Masongsong (1-CARE Party List) during his keynote speech at the San Francisco launch.

 

The ceremonial switch on of the Peakpower San Francisco Inc. (PSFI) peaking plant with ASELCO GM Emmanuel Galarse, San Francisco SB member Neresa De Leon, Rep. Edgardo R. Masongsong (1-CARE Party List), Agusan Sur District II SP Member Edward P. Mellana, ASELCO Board President Corazon D. Cullantes, and PSFI President Roel Z. Castro. PSFI & A. Brown Company Inc. Chairman Dr. Walter W. Brown applauds in the background while PEI VP for Marketing & Regulatory Edgardo Calabio is at the podium. (photo taken from ASLECO FB Timeline)

 

“Mindanao already has 101MW capacity of diesel/bunker fueled peaking plants which will be operational by year end. This proves electric coops in Mindanao has been helping government address the power shortage in Mindanao,” the party list solon stressed.

 

Masongsong cited how 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 does not significantly affect the price of power for the consumer,” he noted.


Public-Private Partnerships


Dr. Walter W. Brown, PEI Chairman of the Board noted the how the projects in Gensan and San Francisco could blaze a trail for similar Public-Private Partnership (PPP) undertakings in the future.

 

“It is not a common situation where we get the full cooperation of the provincial government, the municipal officials and the private sector. I think this project is a good example of what the government should be planning on: it’s really effecting maybe on a small scale, the concept of a public-private partnership,” he said during the San Francisco launch. “I’d also like to convey to Sec. Petilla and [National Electrification Administration] Administrator Edith Bueno, we also have the full support of the national government.”

 

“This is what I hope can be an example for other provinces and other projects,” he added. “If government and the private sector work together, there is nothing to stop us from making good progress.”

 

Dr. Brown also hopes the coming of power to underdeveloped areas could convince more people to join the development bandwagon to prosperity instead of hindering it.

 

 “Bringing power to one of your municipalities here, enhancing the investment here, cannot but lead to the development also of the hinterlands,” said Dr. Walter W. Brown, PEI/PSFI Board Chair. “The long range future of this country is not just the development of power projects. Malls are good, but they are not the most important aspect of our country. Most important is to develop the countryside to remove the constraints that provide support for those that fight progress and private sector development.”

 

“We value and appreciate the support we’ve gotten and we dedicate ourselves to looking not only at this project, but other projects that will develop this community, this province, and Mindanao in general,” he added.

 

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