electric power situation for mindanao by doe nov 2011

Mindanao Energy ForumPower/Electrification Sector

Waterfront Insular Hotel, Davao City8 November 2011

OUTLINEI. 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 MindanaoIII. Electrification Program

Barangay Electrification Benefits to Host Community (ER 1-94) Private Sector Participation in Missionary Areas

II. Mindanao Power Sector Situationer2011 Mindanao Grid Profile, Generation Capacity

Coal12%

Oil Based30%

Geothermal 5%

Hydro53%

Solar0.001

1,971 MW Installed Capacity

Mindanao Power Sector Situationer

Agus Complex = 727 MW Installed Capacity36.89 % 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)

2011 Power Supply-Demand

Mindanao Power Sector SituationerComparative Gross Generation2011 and 2010 (January - September)

Note: Preliminary data for the January-September 2011• Excludes generation from embedded and off-grid for the January - September 2011

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 37.84Solar 868 0.01 946 0.02 (78) (8.22)Total Generation6,080,790 6,246,701 (165,912) (2.66)

FUEL TYPE2011 2010 Difference

Mindanao Supply-Demand SituationJanuary-September 2011

W1 W2 W3 W4 W5 W6 W7 W8 W9W10W11W12W13W14W15W16W17W18W19W20W21W22W23W24W25W26W27W28W29W30W31W32W33W34W35W36W37W38W390

200

400

600

800

1,000

1,200

1,400

1,600

Geothermal Hydro Coal Oil-based

Source of data: DOR of NGCP

2011/2010 Max Peak Difference = +0.79% Max Capacity

= 1,416 MW

Min Capacity (Holyweek) =

1,057 MW 2011 Max Demand =

1,250 MW

JAN FEB MAR APR MAY JUN JUL AUG SEP

2011 Min Demand = 835 MW

2010 Max Demand = 1,240 MW

2010 Min Demand = 808 MW

Max TO = 572 MW Max MO =

478 MW

Max FO = 202 MW

MO = Maintenance Outage

FO = Forced Outage

2011 System Peak Demand

2010 System Peak Demand

TO = Total Outages

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

0

500

1000

1500

2000

2500

3000

3500

4000

4500

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

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

Cabulig HEP (8 MW)

2012

Projected Demand AAGR % = 4.56

Required Reserve Margin

Mt. Apo 3 (50 MWW) 2014Conal 1 (100 MW) 2014

Conal 2 (100 MW) 2015

Needs total additional capacity of 1,950 MW onwards to 2030Minergy (28 MW)

2011

MW

DRAFT 2011 PDP

Green Power Bukidnon Biomass (35 MW)=2013

HEDCOR Tamugan.(12 MW)=July 2018

AGUS 3 HEP (225 MW)=2015

Private Sector-Initiated Power Projects

Minergy Bunker Fired(27.5 MW)=Dec. 2011

Mindanao Grid

CEPALCO Cabulig HEP (8 MW)=December 2012

Tagoloan HEP (20 MW)=2016

EDC Mindanao Geothermal 3(50 MW)=2014

- Indicative Projects = 797 MW- Committed Projects = 286 MW

Legend:

HEP

Oil-based

Coal-Fired

Geothermal

Biomass

Conal CFTPP (200 MW)Unit I=2014Unit II=2015 Aboitiz Coal Davao

(300 MW)=2014

EDC Camiguin Wind(5 MW)=September 2015 Steag Expansion

(200 MW)=2014

MI NDANAO

Prospects of LNG Power Generation in Mindanao

World Bank Study shows that South Mindanao has multiple terminal siting possibilities

22-million people, <400 kWh per year

annual power consumption

Not enough powergen capacity, and half is

hydro and vulnerable to drought

At least two locations in South Mindanao

with good prospects for siting a terminal

Locational advantage to major sources of

LNG supply, sits astride trade routes

Why Mindanao?

Aurora-Polanco 138 kV Transmission Project (2012)

Abaga (Baloi) – Kirahon (Villanueva) 230 kV Transmission Project (2011)

Kirahon (Villanueva) – Maramag 230 kV Transmission Line (2011)

Mindanao Substation Expansion-2005 (2011)

79 km

120 km

80 km

108 km

Mindanao Shunt Reactors & Capacitors (2012)





















Nuling (Sultan Kudarat) & Tindalo (Nabuntaran) Substation Expansion (2012)

Gen. Santos-Tacurong 138 kV Transmission Project (2011)





ERC Approved Major Transmission ProjectsMindanao Grid

Source: Draft TDP 2011

100 MVA

21 km

100 km

Mindanao Substation Expansion Project II (2014)

Butuan – Placer 138kV T/L (2013)




Pulangi (Maramag) – Kibawe Line 3 (2013)


70 km

Matanao – Gen. Santos 138 kV T/L (2013)

275 MVA

Mindanao Substation Reliability Project I (2013)

Source: Draft TDP 2011

ERC Approved Major Transmission ProjectsMindanao Grid

Action Plans for Mindanao

Action Plans StatusDevelop Mindanao Energy Plan

The DOE is currently finalizing the Mindanao 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 electricity model for Mindanao

The Philippine Electricity Market Corporation was tasked by the DOE to conduct a study on the feasibility of establishing a 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 viability of the Leyte-Mindanao Interconnection Project (LMIP)

The previous study conducted in 2003 commissioned by Transco to JICA has to be updated particularly on the cost component of the project. The ERC approved on 15 August 2011 the application of NGCP to conduct a Php 91.42 million study on LMIP. NGCP can now proceed with the first phase of the Php 24 Billion LMIP.

Action Plans StatusDredging of Pulangui IV

In January 2011, an inception report on the “Sediment Control and 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 PB 104

Rehabilitation is an option in order to upgrade its present derated 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 VI HEP Units 1 and 2

The rehabilitation of the two units of Agus VI will increase the installed generating capacity from 50 MW to 62 MW and extend the 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 StatusTransfer of Power Barges in Visayas to Mindanao

In terms of privatization, the PSALM Board has approved to commence the bidding of PBs on 18 May 2011. The approval of the Board requires the winning bidder to 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 Power Plant (IDPP)

The City of Iligan conducted a pre-bid conference on 17 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 StatusRenewal of Contract of Mindanao Customers with PSALM/NPC

PSALM submitted on 25 August 2011 to ERC the renewal of CSEE’s of 23 DU’s for approval. (ANECO,ASELCO,BUSECO,CAMELCO,COTELCO,DANECO,DASURECO,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 Power Supply Aggregation

Hired transaction supply advisor (Indra Phils.) for the 300MW baseload power supply. Currently being bidded out to any local or international supplier.


Electrification Program

Electrification Status (As of 31 October 2011)

VISAYAS11,442--------- = 100%11,442

MINDANAO10,031--------- = 99.84%10,047

PHILIPPINES41,939--------- = 99.91%41,975

36 Unelectrified Barangays

41,975* Potential Barangays

Based on DOE’s Target

Electrification Commitment

100% barangay electrification;

90% household electrification by 2017

18Unelectrified Barangays



LUZON20,466--------- = 99.90%20,486

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.

20

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

25%

25%50%

RWMHEEF

DLF

EF20%

5% 35%

10%30%

Resettlement Area

Host Municipality/City

For DLF & RWMHEEF

Host Barangay

Host Province

Host 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 )

75%

12.5%

12.5%RWMHEE

F

DLF

EF

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

60% 30%

12.5% 10%

Host CityHost

Barangay

Resettlement Area

For DLF & RWMHEEF

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 Benefit

943.35 440.69 233.46 269.2

Obligated 515.61 269.87 105.47 140.27

Available/ Collectible Balance

427.74 170.82 127.99 128.93

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

BasilanBackground• 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

Basilan

Way Forward

Reinstatement of PSA will be done with the intervention of DOE, NEA and NPC to comply with the Condition Precedents.

PSP Program in SPUG Areas in Mindanao

End of Presentation

electric power situation for mindanao by doe nov 2011

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