Pinoy Business Coach

CAGAYAN DE ORO CITY—The worst is yet to come. This is the gist of the warning issued by a business organization here against being complacent regarding the power situation in Mindanao. The Philippine Exporters Confederation Inc. (Philexport) said Mindanao and the entire country should work together in instituting mitigating measures against power shortages, especially with the onslaught of the La Niña weather phenomenon.

Philexport said now is the best time for businesses, especially small and medium enterprises, in the country, particularly in Mindanao and Luzon, to start reconditioning their old power- generating sets. “Electric power shortages in both islands [Mindanao and Luzon] are bound to get worse in the coming years before they get better,” said Lius S. Sicat, Philexport trustee for Northern Mindanao.

During a recent consultation meeting with exporters in Northern Mindanao, Sicat said  the business community has already warned the government as early as two years ago that the reserve power-generating capacity of both Luzon and Mindanao is “far too thin” and that “it was time to build those big power plants.”

This city, like other major urban centers in Mindanao, has been suffering an average of four-hour blackouts a day, which the National Grid Corp. of the Philippines (NGCP) has squarely blamed on the very low water level in the National Power Corp.’s (Napocor) hydro-electric dams in Pulangi, Bukidnon, and Agus, Lanao del Sur.

“Mindanao has been projected to suffer brownouts starting last year if no new plants are built, and it did. Luzon was to experience the same this year. And it happened. Only the Visayas was spared, because two companies built a couple of medium-sized power plants that went on stream this year,” Sicat said.

Jovy P. Batiquin, vice president and chief operations officer of the Aboitiz Power-owned Therma Marine Inc. (TMI), recently said in a media forum that Mindanao can no longer rely on its hydro-electric power plants if it is to sustain the robust economic growth of the island.

“You cannot use the hydro plants as your base load, because you cannot be sure when the rains will come. And if they come, you are not sure if they are enough,” he said. Batiquin said that while Mindanao’s economy is growing in double-digit numbers the past years, investors have been frustrated because of antiquated infrastructure that cannot meet their growing demand, such as the hydro-electric power plants operated by the Napocor.

 “Mindanao’s economy is growing very fast…but present supply of power in Mindanao is grossly insufficient to meet the current demand,” he said.  Sicat also said that since taking control of the government in 2001, the Arroyo administration “had not built a single big power plant in both Luzon and Mindanao.” 

“Since it takes an average of three years to build a big natural gas plant like the Ilijan plant in Batangas and five years to construct a hydro-electric dam the size of San Roque in Pangasinan, brownouts will get worse in the next two to three years if the new administration does not move fast,” he said in a statement.

Annual projected average growth rate of the island from 2009 to 2018 is 4.41 percent, which when translated to electricity supply is a need of additional capacity of 90 megawatts (MW) per year. “To address the power-supply deficit for the next three years, there is a need to put up emergency generating units while the new base load plants are being constructed,” Batiquin said.

NGCP data showed that for the second half of this year, Mindanao’s forecast peak demand for electricity is an average of 1,349 MW per month, but the island’s gross average reserve is only 81.1 MW per month.

According to Sicat, an investment of at least $2 billion is needed to build the 2,000-MW generating capacity needed for Luzon. The same amount is needed to build two more 1,000-MW generating plants for both Visayas and Mindanao.

*Government needs to act fast!