Region 10 pursues more RE projects: Normin seeks to tip ‘Balance of Power’ in Mindanao

Jun 18, 2018

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Northern Mindanao is walking the talk on sustainable development by pursuing more renewable energy projects during the past two years.

Data monitored by the Department of Trade and Industry Region 10 and its attached Board of Investments show renewable energy taking the lion’s share of new energy investments for 2017-2018.

MinDA would like more to see more renewable enegy projects like Hedcor’s 68.8 MW hydropower facility in Manolo Fortich, Bukidnon especially in vulnerable off-grid island power grids. (Hedcor Bukidnon)

 

For 2017, DTI 10 records show the FDC Misamis Power Plant at the Phividec Industrial Estate in Villanueva, Misamis Oriental was still continuing construction of its P30-B coal fired power plant, the erstwhile biggest power plant in Mindanao with a total output of 405 megawatts (MW.)

DTI-10 records for 2017 listed six energy related projects in Bukidnon totaling P2.18-B. (four of them greenfield RE projects in two municipalities) that helped  push up total investments in the province by 265% compared to its 2016 total and a 20% of the region’s total for the year, second only  to Misamis Oriental.

Similarly, four firms have filed for incentives with the Board of Investments Region 10 office for five renewable energy projects (three in Misamis Oriental and two in Bukidnon), including biomass, solar and hydropower plants with a total investment of P5.23-B.

 

The three in Misamis Oriental include two solar power projects and one biomass power plant, while the two planned for Bukidnon are run-of-river (ROR) hydropower plant power projects with a total projected output of 16.2MW.

 

Still not registered with BOI but announced during the latest Annual General Membership Assembly of the Misamis Oriental Rural Electric Service Cooperative II (Moresco II) is a bio-mass power plant in the eastern coast of the province. 

 

Also not included in the DTI and BOI listings is the USD 1-billion 552MW coal fired power plant of GN Power Kauswagan Ltd. Co. in Kauswagan, Lanao del Norte expected to start operations this year. It is a joint venture of Ayala Corporation and shell company Power Partners Ltd. Co.

 

As early as 2013, the Mindanao Development Authority (MinDA) was already advocating for more small renewable energy projects especially small distributed generation projects to attain MinDA’s ideal energy mix of 50 percent renewable and 50 percent fossil fueled power plants by 2030.

The island experienced a reversal of its previous 60-40 energy mix in favor of renewable energy when many of the big ticket coal fired power plants came online in the past two years.

 

In a December 2016 report of Department of Energy (DOE), non-renewable energy already accounted for over half of Mindanao’s power source with 1,898 mw (1,070 mw coal and 828 mw diesel) while renewable source only contributes 1,264 mw (108 mw geo-thermal, 1,061 mw hydro, 36 mw biomass, and 59 mw solar).

From about 58% in 2010, renewable energy (RE) capacity in Mindanao is down to 36% in 2017, with fossil fuel plants expected to breach 70% once the GNPower Kauswagan coal fired power plant, the biggest in Mindanao, starts operating.

Gross Generation data for Northern Mindanao from the Department of Energy from 2015-2017 shows that coal fired power plants continue to gain a larger share of the power mix from 42% (2016) to 45% (2017) even as the traditionally renewable energy region hosting the Agus Hydropower Complex bounced back to 44% due to favorable weather conditions and distribution utilities continued scaling back from more expensive oil-fired power plants from 11% in 2016 to only 3% by 2017.

Another viable RE alternative for off-grid plants would be solar power plants like Minergy’s 10MW Kirahon Solar Power Plant in Villanueva, Misamis Oriental. (Minergy photo)

 

MinDA is pushing for more renewable energy projects to maintain a balanced power mix in Mindanao, which currently sources more than 30% of its supply from two government-run hydropower complexes.

While the response to MinDA’s call was immediate with as many as 290 applications crowding MinDA’s One Stop Facilitation and Monitoring Center as of 22 June 2015, three years down the road, the island’s power mix remains skewed in favor of fossil fuel power plants as huge coal fired power plants became operational in the interim.

There are four private distribution utilities and 40 rural electric cooperatives in the island. While Davao and Cotabato may have excess power already, the coops still suffer from regular outages.

Pete Maniego, former chair of the National Renewable Energy Board (NREB) is advocating distributed generation to save on transmission and distribution losses and costs, shorter and cheaper restoration of power supply after typhoons and other extreme weather events.

He noted that most off-grid areas served by diesel gensets do not have access to electricity 24/7, since the operating hours of these gensets are restricted  by the high fuel cost and limited fuel supply. He proposed converting the power systems in these off-grid areas to hybrid solar-diesel to provide reliable power 24/7 at lower rates.

Based on current prices, he estimated that the cost per kWh of solar power is about 50% or less compared to diesel. Pete considers hybrid system as a low-hanging fruit, which electric cooperatives and the National Power Corporation-Small Power Utilities Group (NPC-SPUG) can immediately implement to provide reliable power to rural communities at affordable cost. Moreover, he remarked that all consumers will benefit from the reduction in universal charge for missionary electrification (UCME) resulting from such renewable energy utilization.

To further encourage the long-term development of RE in the island, MindDA has recommended through the Mindanao Power Monitoring Committee (MPMC) ( which it co-chairs with the Department of Energy) the extension the Feed-In Tariff (FIT) program for hydro and biomass projects in Mindanao

The DOE recently announced the possibility of  extending FIT for three more years.

 

In the recommendation submitted by the National Renewable Energy Board, developers can fill the remaining allocation for biomass and run-of-river plants until 2020.

“We are requesting for five-year extension exclusively for Mindanao so that our developers will have enough time to catch-up and get the most out of the FIT allowance, considering that Mindanao has a unique challenge in a sense that we currently do not have a Wholesale Electricity Spot Market, yet,” said MinDA Deputy Executive Director Romeo Montenegro, who is the Technical Working Group chair as co-chairman of the MPMC.

Data released by the committee showed Mindanao with only 3.6% share of the total FIT-All availment with the Visayas and Luzon availing of 26% and 70.4%, respectively.

FIT is a government mechanism to entice renewable energy projects by providing fixed returns to developers for 20 years.

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