Red Alert: Two minutes to midnight on the Mindanao Grid
Mike Banos
March 01, 2006
In the parlance of the National Transmission Corporation (Transco), a red alert exists when available reserves on a power grid drops below the minimum allowable standard. That?s 13.2% of peak power demand per the Open Access Transmission System (OATS) used by Transco and the National Power Corp. (Napocor).
Unbeknown st to many, that?s how the power situation was in Mindanao for pretty much the entire 2005 and even including the last quarter of 2004.
Up to this time, energy reserves for the island remain razor-thin and only a voluntary load-shedding program initiated by Transco prevented rotating brownouts last summer when hydro reserves were exacerbated by the El Ni?henomenon.
Of the existing 1,530 megawatts (MW) of installed generating capacity in the Mindanao Grid, only 1,422MW (93%) is considered ?dependable? by the Dept. of Energy.
If energy demand grows faster than expected or a significant number of existing plants go down due to needed repairs/maintenance or force majeure, permanent rotating brownouts can start as early as this year due to the expected shortfall in actual reserve margin available in the Mindanao Grid to serve Peak Power Demand and maintain the required 13.2% OATS reserve margin standard.
Since 2004, actual reserve margin in the grid was less than half that, or six percent, further deteriorating to 5% this year and projected to fall further to negative ?2% by next year. Even when the 200MW coal fired plant goes online by 2007, this will merely bump up reserves back to 6% (still less than half the 13.2% standard!) before it again degenerates to ?1% by 2008, -7% by 2009 and ?13% by 2010.
On top of this, DOE Supply-Demand projections for 2002-2013 still don?t include the power requirement of the Global Steelworks steel plant in Iligan City (formerly National Steel Corp.) which will need over 100MW during its peak operating hours.
Napocor has a Committed Capacity Enhancement program but it only restores existing plants to their original rated capacity, but will not add additional/new capacity to the Mindanao Grid. Aside from a 40MW hydro-electric plant in Davao, there are no new power projects in the pipeline.
Due to fiscal constraints on the national government?s capacity to loan additional funds, Napocor?s options for capacity additions to the Mindanao grid is limited to various scenarios on the Leyte-Mindanao Interconnection Project, the most viable of which appears to be the 500MW scenario.
However, there are no still no takers for the US$361.34-million inter-connection project, both foreign and domestic. Ironically, available power reserves in Leyte are expected to grow within the year as 200MW now allocated for Luzon will be displaced by new power plants fueled by cheap natural gas from Malampaya gas field in addition to 50-60MW still available as reserves from the Leyte geothermal plants.
Before we start moving heaven and earth to put our collective shoulder behind the DOE band wagon to rustle up ODA financing for that lifeline, an evaluation and possibly paradigm shift in the island?s development strategy may be in order.
More specifically, it?s time to run Northern Mindanao?s development thrust as an alternative industrial corridor through a fine tooth comb. The time to bring in or bring back to life the power intensive, environmentally critical steel and other metal industries is long past yet our LGUs continue to rally behind them, new or old, despite their being low generators of net employment.
Perhaps it?s time the region shift to knowledge intensive industries which are high employment, high-value, high-knowledge industries with low or minimal impact on the environment and maximum generation potentials like education and research, software development, call centers and other business outsourcing, bio-medical research and manufacturing, to take advantage of the new wave in holistic medicine and wellness, and manufacturing generic medicines which directly address the country?s health problems such as the high cost of imported medicines.
By easing the soaring demand for energy in Mindanao, such a paradigm shift in development should enable the national and local governments to allocate preciously scarce resources to more urgent and pressing problems such as health care, education and poverty. And not to power-and-capital-intensive projects which repatriate the blood, sweat and tears of our skilled workers outside the country after wreaking destruction on our environment and siphoning funds from the local banking system.
INDNJC -
Unbeknown st to many, that?s how the power situation was in Mindanao for pretty much the entire 2005 and even including the last quarter of 2004.
Up to this time, energy reserves for the island remain razor-thin and only a voluntary load-shedding program initiated by Transco prevented rotating brownouts last summer when hydro reserves were exacerbated by the El Ni?henomenon.
Of the existing 1,530 megawatts (MW) of installed generating capacity in the Mindanao Grid, only 1,422MW (93%) is considered ?dependable? by the Dept. of Energy.
If energy demand grows faster than expected or a significant number of existing plants go down due to needed repairs/maintenance or force majeure, permanent rotating brownouts can start as early as this year due to the expected shortfall in actual reserve margin available in the Mindanao Grid to serve Peak Power Demand and maintain the required 13.2% OATS reserve margin standard.
Since 2004, actual reserve margin in the grid was less than half that, or six percent, further deteriorating to 5% this year and projected to fall further to negative ?2% by next year. Even when the 200MW coal fired plant goes online by 2007, this will merely bump up reserves back to 6% (still less than half the 13.2% standard!) before it again degenerates to ?1% by 2008, -7% by 2009 and ?13% by 2010.
On top of this, DOE Supply-Demand projections for 2002-2013 still don?t include the power requirement of the Global Steelworks steel plant in Iligan City (formerly National Steel Corp.) which will need over 100MW during its peak operating hours.
Napocor has a Committed Capacity Enhancement program but it only restores existing plants to their original rated capacity, but will not add additional/new capacity to the Mindanao Grid. Aside from a 40MW hydro-electric plant in Davao, there are no new power projects in the pipeline.
Due to fiscal constraints on the national government?s capacity to loan additional funds, Napocor?s options for capacity additions to the Mindanao grid is limited to various scenarios on the Leyte-Mindanao Interconnection Project, the most viable of which appears to be the 500MW scenario.
However, there are no still no takers for the US$361.34-million inter-connection project, both foreign and domestic. Ironically, available power reserves in Leyte are expected to grow within the year as 200MW now allocated for Luzon will be displaced by new power plants fueled by cheap natural gas from Malampaya gas field in addition to 50-60MW still available as reserves from the Leyte geothermal plants.
Before we start moving heaven and earth to put our collective shoulder behind the DOE band wagon to rustle up ODA financing for that lifeline, an evaluation and possibly paradigm shift in the island?s development strategy may be in order.
More specifically, it?s time to run Northern Mindanao?s development thrust as an alternative industrial corridor through a fine tooth comb. The time to bring in or bring back to life the power intensive, environmentally critical steel and other metal industries is long past yet our LGUs continue to rally behind them, new or old, despite their being low generators of net employment.
Perhaps it?s time the region shift to knowledge intensive industries which are high employment, high-value, high-knowledge industries with low or minimal impact on the environment and maximum generation potentials like education and research, software development, call centers and other business outsourcing, bio-medical research and manufacturing, to take advantage of the new wave in holistic medicine and wellness, and manufacturing generic medicines which directly address the country?s health problems such as the high cost of imported medicines.
By easing the soaring demand for energy in Mindanao, such a paradigm shift in development should enable the national and local governments to allocate preciously scarce resources to more urgent and pressing problems such as health care, education and poverty. And not to power-and-capital-intensive projects which repatriate the blood, sweat and tears of our skilled workers outside the country after wreaking destruction on our environment and siphoning funds from the local banking system.
INDNJC -
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