Data from the National Grid Corporation of the Philippines

As the country faces the power sector challenges in the next two years as related by current leaderships in various forms and statements, the Philippine Chamber of Commerce and Industry (PCCI), the largest business organization in the country, is calling on all stakeholders to begin seriously identifying alternative and contingency measures, while calling on government to review the regulatory framework, the current true and correct market/supply structure, the effectiveness of applicable current legislation and seats of responsibilities in order to clear the deck and set the stage that will encourage more private sector investments in the power generation sector.

A presentation made by the Department of Energy to the PCCI shows that total power demand in the country is growing annually at 4.3% in Luzon and 4.6 percent in the Visayas and Mindanao. To meet the growing demand, DOE projects that from 2010 to 2030, Luzon should have additional capacities of 11,900 MW; Visayas, 2,150 MW; and Mindanao, 2,500 MW.

Data from the National Grid Corporation of the Philippines shows that on October 5, Luzon’s dependable capacity was 7,703 MW while peak demand was 6,831 MW showing a reserve of 872 MW for that specific day, which is only 11% and substantially below the annual average forced and scheduled outages of some 20+%.

This accounts for the persistent rolling brownouts and shall continue during this and the coming year.

With no power plants going on line in the next two and a half years, Luzon faces critical power shortfall of 300 MW to 600 MW until 2013 when the 600 MW of GN Power is supposed to be in operation.

In the Visayas, dependable capacity was 971 MW while peak demand was 1,298 MW, or a deficit of 327 MW. Some 647.5 MW is supposed to be operational in stages until 2011.Capacity in Mindanao was 1,137 while peak demand was 1,183 MW, or a shortage of 46 MW with only a 42 MW and the two 150 MW power barges newly acquired by the Aboitiz’s on sight.

Experts and industry players have noted that this power gap between demand and supply which could be reasonably anticipated but was not seriously addressed before is indeed the critical challenge today because power plants take enormous time and resources to build and supply contracts take just about as much and as long to win and conclude.

Dr. Francis Chua, PCCI President said, “There are big players willing to invest in power generation plants but they are not assured of viable buyers and decent returns”.

Chua added, “Government should consider implementing measures to enhance the technical and financial capability of electric cooperatives to increase their capacity to enter into tenders and off-take arrangements.”

PCCI Chairman for Energy, Mr. Jose Alejandro meanwhile says government should mobilize the embedded generation plants and accelerate the rehabilitation and upgrading of privatized power plants including independent power producers to produce 300 to 600 MW for Luzon to bridge foreseen shortfall in 2011, 2012 and part of 2013.

As a mid-term measure, PCCI is urging business and industries to help levelize demand and reduce peaks by undertaking voluntary load-shedding and for large utilities to implement “Time Of Use” (TOU) metering soonest.

PCCI is further aggressively promoting the use of energy-saving technology and other green lighting systems to help bring down peak loads to the benefit of consumers.

The power situation being one of the most burning issues in the country today, the Philippine Business Conference is featuring a session on “Addressing the Power Rate and Supply Issues: The Private Sector View” on October 13, 3:00 p.m. at the Manila Hotel.

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