The Case for Renewable Hydropower in Mindanao

Apr 23, 2012

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Contrary to popular belief, Mindanao could still have undeveloped hydroelectric power potentials which can negate the effects of climate change, more specifically the El Niño phenomenon.

Engr. David A. Tauli, spokesperson of the Mindanao Coalition of Power Consumers, said the experience of other countries which have a large hydroelectric power component are contrary to the Department of Energy and the Asian Development Bank’s opinion that further development of Mindanao’s hydropower potential is not advisable given their inherent vulnerability to drought, citing the recent 2010 power crisis ostensibly due to the El Niño phenomenon.

“Ninety percent of Norway and Brazil’s electricity are sourced from hydropower plants while New Zealand has 60%,” said Mr. Tauli. “They also have among the lowest rates internationally for power generation.”

 

Dinorwig Pumped Hydropower Station in Norway produces 172MW of power. A similar facility is being planned for Lake Mainit in the Caraga Region.

 

Even granting how Norway and New Zealand both have temperate climate patterns. Mr. Tauli said recent weather patterns in Mindanao demonstrate how energy planners can actually take advantage of these location specific climate patterns.

“The historical weather patterns in Mindanao show it is wet in the east side when the west side is dry, and vice versa,” he explained. “This means that construction of a judicious balance of hydro plants on the east and west sides would mean a virtually weather-independent total dependable capacity of hydro power plants. “In other words, hydro plants on both east and west sides would act as the base-load power plants so their combined dependable capacity would be available 24/7.”

Hydro power plants on the West Side include 600 MW of large hydro on the Pulangi River and around 500 MW on the Cagayan River and its tributaries. The East Side includes around 250 MW of large hydro on the Agusan River at least 200 MW of small hydro in various places, and 400 MW of pumped storage hydro on Lake Mainit.

“Hydro plants are supposed to be not operated as base-load,” said Gonzalo B. Julian, Jr., Electricity Sourcing, Business Development Manager, Holcim Philippines, Inc. “Usually these plants are peakers and ancillary reserves due to the fact that they are dependent on water level (which is dependent on weather patterns). “Balancing” hydro plants on the east and west could be possible to appear that hydro plants could act as base-load plants, but we need more of these plants and high investment is required to maintain supply security in the grid.

Engr. Sonny S. Navarro, a Fil-Am energy consultant who has extensive experience in the construction of nuclear and coal-fired power plants in the US, believes Mr. Tauli’s proposal merits further study.

“The experience of Norway and New Zealand is inspiring, considering they’re both industrialized countries and have the ability to build other types of power plants, especially Norway because of its bountiful North Sea oil fields. In comparison, the US only derives about seven percent of its power from hydro, the rest coming from coal (45%), natural gas (23%) and nuclear (20%). It would behoove the Philippines, particularly Mindanao though, not to rely too heavily on one type. The East and West weather patterns as averred by Dave will need to be studied more closely by weather experts to determine whether sufficient water can indeed be harnessed on a “rotating” basis. If assumptions are proved inaccurate, this scheme could potentially be a costly mistake.”

 

The Itaipu hydroelectric plant at the border of Brazil and Paraguay is 14GW, which made it the biggest hydroelectric power plant next to the Three Gorges Dam, in China. In 2011, Itaipu generated 92,24 TWh, or 17% of the total energy consumed in Brazil and 73% in Paraguay..

 

Mindanao’s present generating supply profile dictates the economically optimum choice for immediate construction are intermediate-load, not base-load power plants, said Mr. Tauli in an email to coalition members, copy of which was furnished to this paper.

“The optimum economic operation of a system of generating plants that supplies a grid normally requires a mix of base-load, intermediate-load, and peaking power plants. “

“I agree with Dave if the profile I have in mind is the same as that of him,” Mr. Julian noted. “ Intermediate supply has to come to augment peak demand. New hydro plants could fill in this gap. The system operator however has to manage this well.”

Base-Load power plants operate 24/7 at their rated dependable power capacity (coal, geothermal, and nuclear power plants) while Intermediate-Load power plants include hydro plants and other renewable energy (RE)-based power plants whose power generation varies rather than being held at the same level during operations.

Mr. Tauli says Mindanao has an “ideal mix” of the three types of power plants: 300 megawatts (MW) dependable (not installed) capacity of coal and geothermal baseload; 700MW of intermediate load hydro plants and 350MW of oil-fired/diesel powered peaking power plants.

Considering this, the decision as to which power plants should take priority in construction should not be based on type but rather on the least-cost power plant, regardless of type. The least cost power plants in Mindanao at present are the Agus III hydroelectric power plant in Lanao de Norte and the large multipurpose hydro plants on the Pulangi, Cagayan, and Agusan rivers.

But a former energy official, (who prefers to remain anonymous) also familiar with the Mindanao situation disagrees.

“The development of hydro power nowadays is becoming an expensive proposition both technically and socially. The notion of low price hydro is already a myth today,” he noted. “Environmental costs for hydro is staggering, one day eclipsing the fossil based ones. To my knowledge, Norway, during winter months when the water become ice, depends on nuclear plants. It’s only the when ice thaws, that water becomes available for hydro plants.”

However, while Mr. Navarro agrees the social and financial development costs of hydro could be a constraint, fiscal incentives may be granted by government to address it.

“Although coal has more negatives, developing hydros will also have social costs including possible displacement of residents living along lake shorelines. Hydros cost more to build than coal; therefore initial costs could be a tough hurdle for investors. They take longer to construct- investors will have to wait longer for returns on their investments. In order to entice investors, the government might have to provide incentives.”

On another aspect, Mr. Tauli cautions planners to consider the nature of the problem facing the present Mindanao grid in their future plans: i.e., how it is Energy, rather than Power Constrained.

“This means that there is a limit to the quantity of energy (kilowatt-hours) that can be generated annually, while the amount of power (kilowatts) that can be generated during peak-load periods can be increased suitably to meet peak demands or operating reserve requirements.”

Mr. Tauli said Mindanao’s present power supply system is Energy Constrained because of the operating characteristic of the hydro plants on the Agus River, which is determined by the operating procedure of the hydro plants established by the annual Rule Curve for Lake Lanao.

The Energy-Constrained nature of the power supply system in Mindanao also requires that the decision for the next power plant to be constructed should be based on least-cost rather than type of power plant, which are the large hydro power plants, and not coal-fired power plants, as the DOE insists.

“I support the Construction of Big/Large Hydro Plants, rather than Coal-Fired Base Load Plants, especially if such Big Hydro Plants could be coupled with a Big Dam” said Nestor Degoma, president of the Lanao Power Consumers Federation (LAPOCOF) and the Power Alternative Agenda-Mindanao (PALAG-Mindanao). “Provided, that it would not cause so much dislocations to the surrounding communities and with minimal impact on food production to store storm-water on rainy days to supplement power during the dry months.”

But the former energy official cited earlier does not share Mr. Degoma’s optimism.

“Hydro is already done for Mindanao. Long overdue na ang acceptance for Mindanao to bite the bullet and take the true cost of power as a way of life. The stark truth is no investor wants to come Mindanao and lose money. In Luzon and Visayas, their true power cost is on a level very much higher than ours, yet, it has long been accepted, no qualms, no big deal. They make noise only when there are adjustments every now and then, approved by ERC,” he noted.

A compromise would serve Mindanao better, according to Mr. Navarro.

“Overall, the country (and Mindanao) would benefit if we have more capacity than demand. The basic law of supply and demand will drive prices down. Right now, IPPs are racing to build coal plants because they’re cheaper, faster to build and can earn very good returns. Once power supply equals demand, there will be a slowdown in building more. If developers are required to build both coal and hydro, then capacity would increase.”

But Mr. Julian insists hydro should not be operated as base-load.

“The idea is to build coal as the base-load plants and maintain the existing hydro as the peakers and intermediate supply,” Mr. Julian noted.

– I N D N J C –

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