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Gov’t bares plan to shut old Mindanao coal power plants

The government plans to acquire coal-fired power plants in Mindanao, especially the older power projects, with the aim of shutting them down once the Agus-Pulangi hydro power plants run at higher capacity, to increase renewable energy usage in the region, Finance Secretary Carlos Dominguez III said Thursday.

“We have a very unique situation in Mindanao, where we have sufficient power at this point in time, where we have a very large hydro system that has not been maintained and is producing well below its capacity,” Dominguez said during a virtual economic briefing of the Philippine Embassy in Washington D.C. titled “PH-US at 75: Strengthening Ties through Sustainable Recovery.”

“So, together with the Department of Energy we have developed a plan to first improve the generating capacity of the Agus river system. As we do that, we are also studying the possibility of setting up a fund to acquire all the coal power plants in Mindanao, with the idea of shutting them down as the energy delivery of the Agus river increases,” Dominguez said.

The government plans to rehabilitate the Agus-Pulangi hydro power plants prior to its privatization.

The Electric Power Industry Reform Act of 2001 excluded the privatization of the Agus-Pulangi power plants for 10 years. The law also prohibits the government from engaging in power generation.

Domingo said the shift to renewable energy in Mindanao “will require long term and low cost funds” and they were working with the Asian Development Bank to study the actual of the concept.

He said the idea was to make Mindanao powered by at least 90-percent renewable energy sources. Renewable energy accounts for only 30 percent of Mindanao’s generation mix.

“You have to remember also that it is in the Sarangani province in Mindanao where we have the highest number of sunlight days in the Philippines, and together with that and the Agus river project, we will probably be able to significantly reduce the operations of the older coal-fired power plants,” Dominguez said.

“But again we are studying the economics of it, and we should be able to come up with a model by sometime in the third quarter of this year,” he said.

Among the coal-fired power plants operating in Mindanao are FDC Misamis, Mindanao Coal, SMC Malita, Therma South, GNPower Kauswagan and the Sarangani coal plant.

Energy Secretary Alfonso Cusi urged American investors to revisit the Philippine energy sector.

“It is unfortunate that the US seems to have forgotten us, so I hope our American friends in the business community will again take a look at our new initiatives that aim to make the Philippines rife with many investment opportunities,” Cusi said.

Cusi asked American companies to invest in the country’s sustainable global energy future through the development and utilization of renewable energy, without the feed-in tariff subsidies.

He said the government stopped the implementation of FiT because it “proved to be a big mistake.”

“It forced electricity prices in the country upwards. We cannot have our consumers shoulder the financial burden of such subsidies any longer. This holds true most especially since RE technologies and their markets’ competitiveness have significantly progressed in the past decade,” Cusi said.

Cusi particularly endorsed the development of the geothermal sector.

“Geothermal energy is an area that we would really like to tap and develop. That’s the kind of power we need, and we’d like to see investors from the US doing a 100-percent participation in the development of our geothermal energy,” he said.

He said the DOE was also pushing for the Green Energy Option Program where clean energy advocates could source their clean power requirements from retail electricity suppliers.

Cusi said another policy innovation is the Green Energy Auction Program which will support and facilitate compliance of the mandated participants in the Renewable Portfolio Standards.

“It also provides an additional market for RE developers with the end view of accelerating greater entry of renewables in the power industry. It will also promote the competitive setting of rates for RE supply,” he said.

Topics: Carlos Dominguez III , Agus-Pulangi hydro power plants , Mindanao , Alfonso Cusi , Department of Energy
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