Mindanao Energy Forum

Power/Electrification Sector

Waterfront Insular Hotel, Davao City

8 November 2011
OUTLINE
I. Mindanao Power Sector Situation
 Power Supply and Demand
 Draft 2011 Mindanao Power Development Plan
Update
 Private Sector Initiated Power Projects
 Major Transmission Projects
II. Action Plans for Mindanao
III. Electrification Program
 Barangay Electrification
 Benefits to Host Community (ER 1-94)
 Private Sector Participation in Missionary Areas
II. Mindanao Power Sector Situationer
2011 Mindanao Grid Profile, Generation Capacity

1,971 MW
Installed Capacity
Mindanao Power Sector Situationer
2011 Power Supply-Demand

Agus Complex = 727 MW Installed Capacity

36.89 % of Mindanao Total Installed Capacity

Load Centers:
South Eastern Mindanao = 431 MW (34.5% Total Load)
South Western Mindanao = 185 MW (14.8 % Total Load)
Mindanao Power Sector Situationer
Comparative Gross Generation
2011 and 2010 (January - September)

2011 2010 Difference

FUEL TYPE
MWh % MWh % MWh %
Coal 1,091,024 17.94 1,303,087 20.86 (212,063) (16.27)
Oil-based 941,150 15.48 1,811,479 29.00 (870,329) (48.05)
Geothermal 592,743 9.75 624,738 10.00 (31,994) (5.12)
Hydro 3,455,004 56.82 2,506,452 40.12 948,552 37.84
Solar 868 0.01 946 0.02 (78) (8.22)
Total Generation6,080,790 6,246,701 (165,912) (2.66)

Note: Preliminary data for the January-September 2011

• Excludes generation from embedded and off-grid for the January - September 2011
Mindanao Supply-Demand Situation
January-September 2011
2011/2010 Max Peak Min Capacity
1,600 Difference = +0.79% (Holyweek) = 2011 Max Demand = Max Capacity
1,057 MW 1,250 MW
2010 Max Demand = 1,416 MW
= 1,240 MW
1,400

1,200

1,000

2011 Min Demand

800
2010 Min Demand = 835 MW
= 808 MW
Max TO =
600
572 MW Max FO =
Max MO =
202 MW
478 MW
400

200

0
W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W W
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39
JAN FEB MAR APR MAY JUN JUL AUG SEP
Source of data: DOR of NGCP
Geothermal Hydro MO = Maintenance Outage 2011 System Peak Demand TO = Total Outages
Coal Oil-based
FO = Forced Outage 2010 System Peak Demand
 MINDANAO GRID
Supply-Demand Assumptions
• New capacities
• Minergy Oil-based Power Plant (2x13.75 MW) by 2011
• Cabulig HEP (8 MW) by 2011
• Mt. Apo Geothermal (50 MW) by 2014
• Conal Coal-fired 200 MW Unit 1 (100 MW) by 2014 and
Unit 2 (100 MW) by 2015
• Normal hydro condition
• No retirement of existing power plants
• Electricity Demand projected at 4.56 % Annual
Average Growth Rate (AAGR)
• Required Reserve Margin
• 4 % Load Following and Frequency Regulation
• Spinning Reserve ( Largest Generating Unit, 105 MW)
• Back-up Reserve (Largest Generating Unit, 105 MW)
Note: Assumptions in the Draft PDP 2011 Update
 Mindanao Supply-Demand Outlook
Needs total additional capacity of 1,950 MW onwards to 2030
4500 Minergy Mt. Apo 3 (50 MWW) 2014 Required
(28 MW) Conal 1 (100 MW) 2014 Reserve Margin
2011
4000
Cabulig HEP
3500 (8 MW) Conal 2 (100 MW) 2015
2012

MW
3000

2500

2000

1500
Projected Demand
1000 AAGR % = 4.56

500
DRAFT 2011 PDP
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Required Additional Capacity 100 50 100 300 100 100 100 100 200 100 100 100 200 100 100 100

Committed Capacity 28 8 150 100

Existing Capacity 1658 1685 1693 1693 1843 1943 1943 1943 1943 1943 1943 1943 1943 1943 1943 1943 1943 1943 1943 1943

Required Reserve Margin 269 272 275 277 280 283 286 289 293 297 300 304 309 313 318 322 327 333 338 344

Peak Demand 1484 1550 1616 1686 1755 1829 1906 1987 2071 2163 2259 2360 2465 2575 2690 2811 2937 3069 3207 3351
Private Sector-Initiated Power Projects
Mindanao Grid
Tagoloan HEP
EDC Camiguin Wind (20 MW)=2016
(5 MW)=September 2015 Steag Expansion
(35 MW)=2014
CEPALCO Cabulig HEP
(8 MW)=December 2012
Green Power Bukidnon
Biomass (35 MW)=2013
Minergy Bunker Fired
(27.5 MW)=Dec. 2011

AGUS 3 HEP
(225 MW)=2015

Conal CFTPP (200 MW)

Unit I=2014
Unit II=2015 Aboitiz Coal Davao
Legend: (300 MW)=2014

HEP EDC Mindanao Geothermal 3

(50 MW)=2014
Oil-based HEDCOR Tamugan.
(12 MW)=July 2018
Coal-Fired

Geothermal

Biomass
- Indicative Projects = 797 MW
- Committed Projects = 286 MW
Prospects of LNG Power Generation
in Mindanao

22-million people, Not enough powergen

<400 kWh per year capacity, and half is
MINDANAO
annual power hydro and vulnerable
consumption to drought

Why
Mindanao?

At least two locations Locational advantage

in South Mindanao to major sources of
World Bank Study shows that with good prospects LNG supply, sits
South Mindanao has multiple for siting a terminal astride trade routes
terminal siting possibilities
ERC Approved Major Transmission Projects
Mindanao Grid

Mindanao Substation Abaga

Abaga (Baloi)
(Baloi) –
– Kirahon (Villanueva) –
Expansion-2005 (2011) Kirahon
Kirahon (Villanueva)
(Villanueva) Maramag 230 kV
230
230 kV
kV Transmission
Transmission Transmission Line
Project
Project (2011)
(2011) (2011)
120 km 108 km
Aurora-Polanco
Aurora-Polanco 138
138 kV
kV
Transmission
Transmission Project
Project
(2012)
(2012)

79 km

Nuling (Sultan
Kudarat) & Tindalo
(Nabuntaran)
Substation Expansion
(2012) Mindanao
Mindanao Shunt
Shunt
Reactors
Reactors &
& Capacitors
Capacitors
(2012)
(2012)

Gen. Santos-Tacurong
138 kV Transmission
Source: Draft TDP 2011 Project (2011) 80 km
ERC Approved Major Transmission Projects
Mindanao Grid
Butuan – Placer 138kV
T/L (2013)
Mindanao Substation
Reliability Project I 100 km
(2013)

275 MVA

Pulangi (Maramag) –
Kibawe Line 3 (2013)
Mindanao Substation
Expansion Project II 21 km
(2014)

100 MVA

Matanao – Gen. Santos

138 kV T/L (2013)
Source: Draft TDP 2011 70 km
 Action Plans for Mindanao
Action Plans Status
Develop Mindanao The DOE is currently finalizing the Mindanao Energy Plan
Energy Plan incorporating the comments, suggestions of the Mindanao
stakeholders derived from the meetings/consultations conducted.
The draft Plan is expected to be completed by December 2011 and
the consultations in the first Quarter 2012.
Study the appropriate The Philippine Electricity Market Corporation was tasked by the
electricity model for DOE to conduct a study on the feasibility of establishing a
Mindanao modified WESM in Mindanao.
PEMC created an internal Committee to undertake the said study.
The draft has been initially discussed with the DOE but will still be
further reviewed.
Revisit the economic The previous study conducted in 2003 commissioned by Transco to
viability of the Leyte- JICA has to be updated particularly on the cost component of the
Mindanao project.
The ERC approved on 15 August 2011 the application of NGCP to
Interconnection
conduct a Php 91.42 million study on LMIP. NGCP can now proceed
Project (LMIP)
with the first phase of the Php 24 Billion LMIP.
 Action Plans for Mindanao
Action Plans Status
Dredging of In January 2011, an inception report on the “Sediment Control and
Pulangui IV Reservoir Management Plan” was submitted to NPC. The final
report is expected to be submitted by November 2011. The funding
for this project will depend on the result/outcome of the study.
Rehabilitation of Rehabilitation is an option in order to upgrade its present derated
PB 104 capacity and thereby extend its economic life. However, PSALM
decided to sell this asset and on 18 May 2011, the PSALM Board has
approved to commence the bidding of PB 104. Publishing of
invitation to bid is scheduled on November 2011.
Uprating of Agus The rehabilitation of the two units of Agus VI will increase the
VI HEP Units 1 and installed generating capacity from 50 MW to 62 MW and extend the
2 units economic life to another 30 years.
Based on the 14 September 2011 letter of NEDA to NPC, the
Investment Coordinating Committee-Cabinet Committee (ICC-CC)
has already approved the implementation of this project. NPC is
ready for the tendering process once NEDA Board’s
endorsement/approval is received.
 Action Plans for Mindanao
Action Plans Status
Transfer of Power In terms of privatization, the PSALM Board has approved to
Barges in Visayas to commence the bidding of PBs on 18 May 2011. The
approval of the Board requires the winning bidder to
Mindanao transfer PBs 101-103 from Visayas to Mindanao with costs
of transfer and rehabilitation, if any, to be shouldered by
the winning bidder. The issuance of invitation to bid is
scheduled in the last quarter of 2011.

Operate Iligan Diesel The City of Iligan conducted a pre-bid conference on 17

Power Plant (IDPP) August 2011. The interested bidders are currently
conducting due diligence. The bids are supposed to be
submitted on 13 October 2011 but was re-set to a later date
since the City of Iligan has yet to receive the COA approval
for the sale of IDPP. It is expected that the award of the
facilities to the winning bidder will be by December 2011.
 Action Plans for Mindanao

Action Plans Status

Renewal of Contract of PSALM submitted on 25 August 2011 to ERC the renewal of
Mindanao Customers CSEE’s of 23 DU’s for approval.
(ANECO,ASELCO,BUSECO,CAMELCO,COTELCO,DANECO,DAS
with PSALM/NPC URECO,DORECO,ILPI,LANECO,MAGELCO,MOELCI I and II,
MORESCO II, SIARELCO, SOCOTECO II, SURNECO,SURSECO I
and II, SUKELCO,ZANECO, ZAMSURECO I and II)
Most of the supply contracts were reduced by 31% from the
previous contract due to privatization of 200MW NPC
generating asset.

AMRECO Proposed Hired transaction supply advisor (Indra Phils.) for the
Power Supply 300MW baseload power supply. Currently being bidded out
Aggregation to any local or international supplier.
Electrification Program
 Electrification Status
(As of 31 October 2011)

LUZON PHILIPPINES
20,466 41,939
--------- = 99.90% --------- = 99.91%
20,486 41,975
27
Unelectrified Barangays
41,975*
Potential Barangays
VISAYAS Based on DOE’s Target
11,442
--------- = 100%
11,442 36
Unelectrified Barangays
0
Unelectrified Barangays

Electrification
MINDANAO
10,031
Commitment
--------- = 99.84%
10,047  100% barangay
electrification;
18
Unelectrified Barangays  90% household
electrification by 2017
Energy Regulations No. 1-94 (ER 1-94)

It is the implementing rules and regulations of Section 5 (i) of R. A. No.

7638, or the “DOE Act of 1992”
 Sec. 5(i) of R.A. 7638 provides,
 That the Department shall ”devise ways and means of giving direct
benefits to the province, city, or municipality, especially the community
and people affected, and equitable preferential benefit to the region that
hosts the energy resource and/or energy-generating facility:Provided,
however, that the other provinces, cities, municipalities, or regions shall
not be deprived of their energy requirements”.

 Sec. 66 of R.A. 9136 provides,

 That the provision of financial benefits to host communities and the
obligations of the power generating facilities and/or energy resource
developers as defined in R.A. 7638 and its IRR shall continue.

ER 1-94 is part of the rate imposed on the electricity end-users, duly approved by
the ERC.
Application/Allocation Scheme of P0.01/kWh
( Non-Highly Urbanized City )

For DLF & RWMHEEF

DLF Resettlement Area Host
Municipality/City
25% 5%
EF Host Barangay
35%
20%
50%
25% 30% 10%
Host Province Host
RWMHEEF Region

Note: EF – Electrification Fund

DLF – Development and Livelihood Fund
RWMHEEF – Reforestation, Watershed Management, Health and/or
Environment Enhancement Fund

21
Application/Allocation Scheme of P0.01/kWh
( Highly Urbanized City )

For DLF & RWMHEEF

DLF
Resettlement Area
12.5% 12.5%
RWMHEEF 10%
12.5%
30%
EF 60%
Host Barangay
75%
Host City

Note: EF – Electrification Fund

DLF – Development and Livelihood Fund
RWMHEEF – Reforestation, Watershed Management, Health and/or
Environment Enhancement Fund

22
 Summary of Financial Benefits
Mindanao
(In Million Pesos) as of 31 October 2011

26 June 1994 – 25 June 2011

( Validated Electricity Sales )
Total EF DLF RWMHEEF
Accrued Financial 943.35 440.69 233.46 269.2
Benefit
Obligated 515.61 269.87 105.47 140.27

Available/ 427.74 170.82 127.99 128.93

Collectible
Balance

23
Missionary Electrification Program

Private Sector Participation(PSP)

in NPC-SPUG Areas
the take over of the supply of electricity to any
existing NPC-SPUG areas, either through outright
purchase or lease of existing NPC-SPUG assets,
and/or installation of new power generating
facilities including associated power delivery
systems;
PSP Program in SPUG Areas in Mindanao
Basilan
Background
• Basilan Island Power, Inc. (Bi Power) was chosen in 2008 as a
New Private Provider through negotiation due to high risk in
security
• Bi Power will supply 11.8 MW at PhP11/kWh

Status
• Power Supply Agreement (PSA) has yet to be filed with ERC
• Power Station has yet to be constructed
• Effective date of PSA was February 2009 but was not
achieved due to non-compliance to Condition Precedents:
• Site acquisition
• Conduct of Distribution Impact Study
• ERC’s approved of Power Supply Agreement
PSP Program in SPUG Areas in Mindanao

Basilan

Way Forward

Reinstatement of PSA will be done with the

intervention of DOE, NEA and NPC to comply with the
Condition Precedents.
 End of Presentation

Mindanao Energy Forum

Power/Electrification Sector

Waterfront Insular Hotel, Davao City

8 November 2011