The Mindanao Development Authority (MinDA) is optimistic the green energy option program (GEOP) and the renewable portfolio standard (RPS) will bring back the interest of investors in putting up renewable energy (RE) projects in Mindanao.
GEOP will institutionalize a mechanism that will provide end-users the option to choose cleaner sources of energy from their power distributors while RPS requires distribution utilities to source a certain percentage of their total power supply from renewable sources.
“We look towards having an aggregation of market demand that will be tilted towards accommodating RE. This is where we’d like to encourage the entry of RE (projects) that are otherwise discouraged by the fact that most of the 34 ECs (electric cooperatives) in Mindanao are fully contracted mostly by coal,” said Romeo Montenegro, MinDA deputy executive director, in an online briefing last week.
Montenegro added in the briefing hosted by the Davao City Chamber of Commerce and Industry MinDA aims to diversify the region’s energy mix towards transitioning to at least 50/50 mix by 2030 from the current 70/30 level of dependence from fossil and coal against RE.
Montenegro said the agency is hopeful the implementation of GEOP and RPS will level the playing field between fossil fuel-based power plants and RE projects as Mindanao’s current oversupply in electricity may again become insufficient in seven years.
According to MinDA, Mindanao’s power demand prior to the pandemic in 2019 averaged at 1,700 megawatts (MW) but fell to as low as 1,500 MW last year. This recovered to 2,000 MW this year.
Montenegro said the current 800 MW oversupply of energy in the region will be likely gone by 2028 or 2027.
“In 2018, we counted around 40 high-end or vertical projects in Davao, mostly condominium projects that will probably need 2 to 3 megawatts (MW) each to operate… We are looking at the same trend in all other urban areas in Mindanao prior to pandemic and as we emerge hopefully strongly out of this pandemic, that is going to be the same direction where by 2030, we need additional capacity of 3,500 MW in Mindanao,” Montenegro added.
He said this should be from RE sources from large scale developments.
“We are looking at distributed generation as one approach where bite size capacities can be embedded capacities of ECs in Mindanao rather than the usual default mode of building a big power plant and be connected in the grid and distributed to ECs,” Montenegro said.
