DOE unable to attract new power projects

Published January 31, 2020, 12:00 AM

by manilabulletin_admin


With just more than two years left for the Duterte administration, it is apparent that the Department of Energy (DOE) is having “epic fail” when it comes to attracting new power investments and could likely commit the country to another round of power supply crisis by year 2022.

As culled from DOE documents, for Luzon grid – despite forecasts of continuously increasing demand because of the flurry of “Build, Build, Build” (BBB) infrastructure projects and the country’s growing economy, the remaining committed capacity (minus the coal plant projects that already completed construction) will just be at 632.6 megawatts.

With projections of roughly 500 to 600 megawatts demand growth annually and given that supply-demand equilibrium is already anticipated by year 2022 or the end of the Duterte administration, the comfortable level of committed capacity that the DOE cornered since two years ago should have been at 4,000 to 4,800MW – at least to satiate the country’s electricity needs until 2030.

But for three years, the DOE just logged a trifling 13 to 15% of what the biggest power grid shall be needing in the medium term, based on its own list of committed projects as of 2019. And since the gestation of power projects typically stretches 3-5 years, the department is already short of time if there would be no major project that will advance to construction phase this year.

Of that targeted capacity build-up, 300MW will be for diesel-fired plant to be developed by the Ayala group to meet the grid’s need for peaking capacity; and the balance are all renewable energy projects with aggregate capacity of 332.6MW.

The RE installations range from 1.2 to 115MW of hydro run-of-river, biomass, geothermal and solar farm projects. And notably, the intermittent and cyclically available resources like solar and hydro cannot be fully depended upon by the system for generated capacity at all times.

The DOE has so far factored in the 1,200MW Atimonan coal-fired power project, but this remains a problematic venture because of the skirmish on the terms of reference (TOR) of the proposed facility’s competitive selection process (CSP) on its power supply agreement.

The department also included the 650MW gas-fired power project of Energy World Corporation (EWC), but this installation has been encountering dilemmas on construction completion since 2013. Still another project with impediments is the 600MW Redondo Peninsula coal-fired power project in Subic.

On the RE capacities, it could be gleaned from the DOE roll that they comprise of: 31MW geothermal capacity addition; 20.4MW of hydropower capacity; 66.2MW of biomass; and 215MW of solar.

For the Visayas grid, committed power capacity had been placed at 524.26MW – comprising of a 135MW coal plant; 114.58MW oil-based facility; 50MW geothermal; 23.1MW hydropower; and 201.58MW biomass projects.

Mindanao is still on a surplus capacity mode, so the only known advancing developments are the 15MW Siguil run-of-river hydropower; and the 105MW Zamboanga coal-fired power projects of the Alcantara group.