Plugging power supply deficit in the Visayas

Essay Writing Contest:The Search for Energy Youth Leaders

Web Admin Advisory

This is to apprise all essay writing participants that we have scheduled the Awarding Rites on October 14, 2010, with tentative venue at New World Renaissance Hotel in Makati City.

We will notify the winners soon.

Since the nomination for our selected winner to an overseas conference will not go along anymore with the deadline for the World Energy Council (WEC) conference in Canada, we are taking the option of sending him/her to the Climate Change Conference in Mexico this December or a nomination to the WEC Program for Youth, which is also overseas. We will correspondingly make announcement on that too during the awarding rites.

--- Essay Writing Secretariat

Believing in the immense potential of the next generation in helping shape the country’s energy future, the institutional and corporate partners of the Essay Writing Contest for College/University Students have introduced two Special Categories that aims to dig deeper into the ideas of the youth on how the country would be able to move forward from the vicious cycle of energy crisis and how this vital sector can contribute in the preservation of the environment and into abating climate change risks.

The two Special Categories revolve on the sub-themes: “Strategic Measures in Ensuring Success of a Competitive Electricity Market”, advocated by institutional partner Energy Regulatory Commission (ERC); and “Clean Energy Solutions”, which is supported by the Aboitiz Power Corporation. They were launched last June 11, 2010 at the Bryant George Hall of the Eduardo Aboitiz Development Studies Center in Cebu City.

In view of the latest developments, the organizers have decided to move deadline of submissions to July 31, 2010 (details are provided in the Contest Rules). The awarding rites will be scheduled August this year.

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Plugging power supply deficit in the Visayas

Plugging power supply deficit in the Visayas

*Contributed by Alena Mae S. Flores

Mr. Jess N. Alcordo, President of Global Business Power Corporation, recently discussed the power firm’s initiatives for the coming year and how this will help solve the problem of power supply shortages in the Visayas. Read on for the excerpt of this interview:

What are the major projects of Global Power for the year?

JNA: 2010 is a milestone year for Global Business Power Corporation with the completion of our two expansion projects – one with the Cebu Energy Development Corporation consortium in Toledo City at 246 megawatts and another under Panay Energy Development Corporation in Iloilo City, a member of the Global Power group, at 164 megawatts. Both are clean coal-fired power plants adopting the latest Circulating Fluidized Bed (CFB) boiler technology which ensures minimal emissions and waste and hopes to address the need for additional baseload power in the Cebu-Negros-Panay Grid.

All in all, we’re looking at 410 megawatts of new or added capacity for the CNP Grid that would significantly stabilize grid voltage and also serve to further propel the economic growth in these islands, particularly in Cebu and in Panay.

Part and parcel of our power plant projects are the community programs that go with them. We have identified over 115 hectares of tree planting sites for both projects and look forward to working with communities on this. We aim to identify livelihood opportunities for local residents in line with these projects thereby sufficiently sustaining our tree planting sites.

2010 is expectedly going to be quite a dynamic year for Global Power.

Are there plans to bid for the generating assets of Napocor or are you concentrating on greenfield projects?

JNA: Presently, Global Power has no plans to bid for Napocor assets. We would like to focus on our ongoing expansion projects. Global Power is keenly focused on building additional base load capacities where they are urgently needed. At present, the CNP grid is highly dependent on imported power coming from Leyte Geothermal. The increasing power demand in these islands can no longer be supplied by existing power generating units. It is for this reason that Global Power decided to build its new plants with the objective of not only addressing the current worsening power crisis in Cebu and in Panay but also improving the reliability and stability of power within the Visayas grid.

As a member of the Metrobank Group of Companies, Global Power is committed to environmental management. All of our projects including our efforts to adopt clean coal technologies in our expansion projects are geared towards our commitment to environmental sustainability. This commitment, hand in hand with our goal to be the lead electricity generator in the Visayas, naturally prompts us to expand our operations into Greenfield projects, particularly in the Visayas with some possibilities in Luzon.

What’s the status of the 246-megawatt Toledo Project? Have you started construction? What’s the target date of completion?

JNA: The 3x82-megawatt Toledo Project broke ground in January 2008 and began construction in the third quarter of the same year. We are on schedule and the first unit will be online and synchronized to the Grid by the first quarter of 2010. The second unit is expected to be online by June and the last unit by end year to make the power plant fully operational by the end of 2010.

For our Panay project, the 2 x 82 megawatt project broke ground in September 2008 with construction commencing in the third quarter of 2009. The first unit shall be commercially operational this October and the second unit at the beginning of 2011.

The timely completion of the two power plants is in line with our commitment to immediately address the worsening power crisis in the Visayas.

What’s the Group’s capex plan for the year? How do you intend to finance these projects?

JNA: Predictably, our capital investments this year are focused on the expansion sites in Iloilo City and in Toledo City, Cebu. Both projects have a combined cost of about US$880 million. For 2010, Global Power still needs to spend about US$600 million to complete the projects.

It is worth noting that the Cebu project is the single largest locally syndicated peso-denominated 12-year project loan facility at over Php16-billion pesos. In June 2009, eleven banks signed a loan agreement with Cebu Energy Development Corporation for the project.

On the other hand, the Iloilo project, under Panay Energy Development Corporation, requires financing amounting to Php14-billion presently being arranged with local banks. The loan agreement for this project is expected to be signed early this year.

We looked at peso financing for both projects to ensure more stable operations and management expenses over time and to ensure a more stable and competitive energy rate for our clients and partners.

Are there plans for the group to enter the RE industry?

JNA: We at Global Power believe that renewable energy is the future. All of our resources are presently focused on our two major projects in Iloilo and Cebu, but, we are looking into renewable energy opportunities as well. Before we can focus on our RE interests, we would, however, like to first address the need for additional, reliable and stable baseload plants in Cebu and Panay where we have operated for some time. We found a good transitional technology as a solution to rising environmental and development concerns vis-à-vis the need to address power shortage across the country. This transitional technology is the CFB boiler technology matched with state-of-the-art emission and waste management systems.

In terms of viability, the Renewable Energy Sector presently faces some technical challenges. We hope further research and development will help address these. So far, it is observable that companies have taken much interest in hydroelectric power generation or a hybrid approach to adopting RE technologies. Global Power is presently exploring options for RE investments, particularly, the possibility of hydro projects.

At this point in time, it is our belief though that the Philippines needs to find a balance in using traditional sources of power which provide much of our baseload power across the country – on which much of our industries depend – and pockets of RE projects – on which residential and small-capacity requirements can rely on – to help address our power shortage concerns, especially in Visayas and in Mindanao.

What are your expectations for 2010 for the power sector?

JNA: We expect the sector to be more vibrant this 2010 with the recent successful bidding of IPPA contracts and the privatization of Napocor assets almost coming to a close.

After 9 years of attempting to successfully implement EPIRA, we hope for breakthroughs this year as far as opening the market up further. Visayas will hopefully have the Wholesale Electricity Spot Market (WESM) in place before the year ends.

Also, we hope that more investments come into the power industry with its roughly 10-year drought in investments for new capacities and with the expected growth of key industries in the country. More electricity means more jobs and more development for everyone.

On our part, with retail competition at our doorstep, Global Power will continue to play an active role in setting utmost standards on quality service as well as efficient and reliable power supply to customers.

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More to the Point: Energy Crisis in Mindanao

Mindanaons are angry that the administration has not been able to anticipate the crisis which had been foreseen by several experts. Now a state of calamity in Mindanao has been declared but many fear that this would give the administration reason to exercise emergency measures that may not be sustainable. In fact, senatorial candidate Joey de Venecia blames the administration for its “unexcused failure to put in the required base load capacity.” It also puts the blame on El Niño instead of looking at other factors such as its inability to plan ahead of time. What could have been done, he said, is to have invited foreign and local suppliers for the needed emergency generating sets instead of resorting to negotiated contracts, a common practice in the past.

A policy paper prepared by former Energy Secretary Francisco L.Viray and Myrna Velasco on “Crafting Energy Policies” for the Unicef-Asian Institute of Journalism and Communication publication, “The Future of Filipino Children,” examines some realities and alternatives. They note that although we are urged to shift from fossil fuels (coal and oil) to cleaner energy sources such as biofuels, renewable and nuclear energy, the reality is that oil, coal and natural gas remain the most abundant energy.

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To Sapao, whose two-year-old son was plucked out alive after being buried in mud and piles of debris for seven hours, the tragedy could be a freak of nature—a tragic event that could hit the unlucky, the unsuspecting.

“It’s horrifying and sad,” says Sapao. “I lost my family, my home was reduced into a pile of debris, and we have nowhere to go until now.”

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