Mindanao shrugs off STEAG shutdown

Mar 2, 2015



It pays to be ready.


Unlike last summer when crippling rotational brownouts left large swaths of Mindanao without electricity for up to eight hours or more daily, the latest shutdown of the same power plant did not have a similar effect on the Mindanao economy.


Mapalad Energy Generating Corp (MEGC) 15MW buker-fuel generating plant is Iligan Light & Power Inc.'s (ILPI) is a good example of an embedded power plant by a distribution utility which helped Iligan City avoid rotating brownouts during the recent power curtailment. (contributed photo)



In a text message to BusinessWeek Mindanao, Romeo M. Montenegro, Investment Relations and Public Affairs Director of Mindanao Development Authority (MinDA), said this was revealed by the Association of Mindanao Rural Electric Cooperatives (AMRECO) in its report rendered during the February 24 meeting in Davao City of the Mindanao Power Monitoring Committee (MPMC).


“Based on the report of AMRECO, rotational brownouts affected 10 out of 28 electric cooperatives and one of four private distribution utilities in Mindanao, averaging 1-2 hours except for Sukelco, Zamcelco and Zamsureco with 4-5 hours. Several electric coops have been able to mitigate with embedded capacity such as modular gensets.”


The MPMC is a multi-sectoral body created by President Aquino to monitor the power situation in Mindanao under the aegis of the Mindanao Development Authority (MinDA).


Earlier, Mr. Montenegro said the planned power outage by Mindanao’s first coal-fired power plant which started two weeks ago would not have a significant impact on the island provided no other power generating plants cease operating during the shutdown period.


In a public advisory dated 16 February 2015, STEAG State Power Inc., owner and operator of Mindanao’s first coal-fired power plant, said it scheduled a planned preventive maintenance for the 210 MW (net) Mindanao Coal-Fired Power Plant, from February 19 to March 2, 2015 for Unit 2 and  February 21 –March 16, 2015 for Unit 1.


The critical period for the Mindanao Grid was expected to be from February 21 to March 2 when both units would be shut down, taking 210MW off the island’s available power supply.   


STEAG State Power Inc.'s boiler Units 1 & 2 (photo by Dante Sudaria)


With the completion of maintenance of one of its 105MW units of STEAG State Power Inc. (SPI) by March 2, MPMC expects further improvements in areas affected.


Unit 2 of the coal plant underwent cold start up at 9:52PM Sunday, 01 March and synchronized to the Mindanao Grid at 6:08 AM Monday, 02 March. SPI sources said it was fully loaded as of 10AM yesterday.


The AMRECO report was affirmed by the two private electric distribution utilities in Mindanao to BusinessWeek Mindanao.


Jaime Rafael U. Paguio, Senior Vice President of the Cagayan de Oro Power and Light Co. (CEPALCO) serving Cagayan de Oro and the Misamis Oriental municipalities of Tagoloan, Villanueva, Jasaan and the Phivedec Industrial Estate, admitted there was an instance when one of the generators of its Independent Power Producer (IPP) Mindanao Energy Systems, Inc. (Minergy) had to undergo minor repairs and CEPALCO was unable to source non-firm supply from IPPs and had to resort to a short interruption in the morning of February 26, 2015  so it would not exceed its Load to Maintain (LTM).


However, Mr. Paguio said except for that, CEPALCO was able to manage the power deficit and avoid rotational brownouts in its franchise area with the help of their embedded IPP Minergy and other IPPs to cover any shortfall.


Minergy’s diesel power plants, two mini hydro-electric plants and the CEPALCO operated PV power plant can jointly generate an additional 50 MW.


Mr. Paguio said CEPALCO also made it through with the help of its Interruptible Load Program (ILP) which can harness over 23 MW during peak hours from 2:00 to 8:00PM from its industrial partners enrolled in the ILP which calls for them to run their standby gensets during the period to allow CEPALCO to distribute their allocated loads elsewhere in its franchise area.


The 13 companies enrolled  in the ILP include Limketkai Sons, Inc., Limketkai Manufacturing Corp., Gaisano, Inc., Del Monte Phils., Mindanao Timber Company Inc., Centrio Mall, Alwana Business Park, Cagayan Corn Products, RI Chemical Corporation, Pilipinas Kao, Inc., SM City Cagayan de Oro, Nestle Philippines, and Coca Cola Bottlers Co.


Thus, CEPALCO managed to generate power within its franchise area that can provide up to 52 percent of its peak power demand of 140MW. This proved sufficient to offset any power shortfall within its franchise area even if its power allocation from the state run Power Sector Assets and Liabilities Management Corporation (PSALM) was slashed due to the SPI shutdown.


Similarly, Rolando J. Linaac, Chief Operations Officer of Iligan Light and Power Inc. (ILPI) said the utility managed to avoid rotational brownouts due to its adequate preparations and diversified power portfolio which included allocations from the Mapalad Power Corporation (formerly NPC’s Iligan Diesel Plant) and its embedded 15-MW bunker fuel-fired power plant operated by its affiliate  Mapalad Energy Generating Corporation and the energy assignment from shuttered Treasure Steelworks Corporation (formerly National Steel Corp) secured thru the efforts of the Iligan city government.


The 98MW Mapalad Power Corp diesel plant in Iligan CIty.


“The combined output of these sources could cover two-thirds of our requirements,” Mr. Linaac said.


Even electric cooperatives which were formerly subject to nine hours of rotating brownouts last summer managed to keep this to a minimum this past month by diversifying their sources of energy supply.


In an exclusive interview with BusinessWeek Mindanao, Adelmo P. Laput, General Manager of the Zamboanga del Norte Electric Cooperative, Inc. (ZANECO) said despite the STEAG shutdown, they had minimal brownouts and only during peak hours.


In addition to its shrinking allocation from PSALM, Mr. Laput said ZANECO has contracted additional capacities from thermal power plants for peaking purposes on top of baseload contracts from cheaper coal plants.


“We made sure we had enough electricity for 2015 with five megawatts from Therma South Incorporated’s coal plant under construction in Davao area and 25 megawatts from PSAGCor’s coal plant under construction in Kauswagan in Lanao del Norte,” Mr. Laput said.


By the end of 2015, ZANECO expects its run-of- river mini-hydro electric power plant in Bergado, Mutia, to be operational with approximately eight megawatts.


“We are confident that we will be energy sufficient by that time, and less expensive because coal plants are a lot cheaper than generators using liquid fuel, which we are using as of the moment.”



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