Immediate solutions must be implemented to help manage the potential increase in commodity costs in Mindanao, according to Arturo Milan Aboitiz Equity Ventures’ (AEV) adviser for the region.
The former president of Davao Light and Power Co. said Mindanao has an excess power supply of around 1,000 megawatts (MW) but electricity costs are expected to increase due to the volatility of fuel costs in the global market resulting from the Russian-Ukraine war and foreign exchange rates.
At the Mindanao Business Summit hosted by the European Chamber of Commerce of the Philippines recently, Milan cited demand-side management, particularly energy efficiency audits under the Energy Efficiency and Conservation Ac as one of the immediate measures that should be undertaken in Mindanao.
Milan also said the implementation of Wholesale Electricity Spot Market (WESM) can help take advantage of the excess supply and get lower rates on electricity in the region.
WESM, which serves as a venue for trading electricity as a commodity in the Philippines, is targeted by the government to be implemented in Mindanao anytime this year.
In the mid-term, Milan called for the rehabilitation of hydro facilities in Mindanao, especially the Agus and Pulangi plants to increase their capacity.
The Agus-Pulangi hydro power plant complex which is among the remaining government-owned power assets has a nameplate capacity of 982 MW but the National Power Corp. earlier said that due to its age, the facility only has a dependable capacity of 700 MW.
Milan said rehabilitation of the plants will also increase the stock of renewable energy generation in Mindanao, which is in line with the Department of Energy’s Philippine Energy Plan.
Milan said the upcoming interconnection of the Mindanao and Visayas grids will allow the export of excess power to other areas.
As of end-2020, Mindanao’s total on-grid installed capacity is at 4,504.9 MW, almost 41 percent of which or 1,837 MW are from coal-fired power plants.
