Philippine: Retired plants to shift to natural gas

The Department of Energy (DoE) is looking at the conversion of retired oil-based power plants into natural gas fuel as a way of shoring up power supply and bring notches higher the country’s bid for energy independence.

Among the five-point reform package that Energy Secretary Raphael P.M. Lotilla has unveiled to be part of his department’s plans and programs would be “to convert retired and operating oil-based plants to natural gas by 2010.”

The energy department has been keeping hopes that additional gas reserve can still be extracted from the Malampaya gas field to run additional power capacity in the Luzon grid.

“We’re looking at enough natural gas supply to support an additional 300 to 500 megawatts,” the energy chief has noted, adding that discussions are being held with Shell Philippines Exploration B.V. on this score.

“On the government side, we are stressing the need for making the additional natural gas supply available and the investments are necessary to make that additional volume available in time for the critical period in Luzon,” Lotilla stressed.

As could be gleaned from the revised Power Development Program, the DoE is still struggling with prospects of cornering investments for new capacity.

While Luzon is just more than three years away to what the energy department forecasts as critical years of 2010 to 2011 for electricity supply, the new PDP only casts a measly 40-megawatt committed additional capacity by then as compared to the actual need about 665 megawatts.

The only listed committed project is the 40megawatt wind power plant of the Philippine National Oil Company-Energy Development Corporation (PNOC), of which capacity might be slashed to as low as 20 or 30 megawatts as company officials bared previously.

Data provided by the energy department likewise indicated that by 2009 and 2010, two power plants with aggregate capacity of P860 megawatts will be retired.

The 210-MW Hopewell gas turbine plant is scheduled for decommissioning in 2009; and Malaya 1 and 2 power facilities will go off-line in 2010.

If the DOE will not stretch its efforts to entice new investments in the power sector between now until next year, a fearful scenario thrives that Luzon, where the country’s economic backbone lies, might be plunged into new round of electricity supply shortfalls.

“The Luzon grid will need a total of 1,990 MW of new generating capacities to meet the expected demand growth,” the department has detailed out in its 10-year plan.

It added that the biggest power grid’s power requirements, as stipulated under the revised power development blueprint are seen to grow by an annual average rate of 4.0-percent; from 6,443 MW in 2005 to 7,878 MW in 2010 and 9,397 MW in 2014. Energy officials admitted that despite projections of a slower economic growth,”the required capacity addition remains necessary in 2010.”

Meanwhile, for the Visayas grid, the DoE sees 5.0-percent in economic growth and this needed capacity addition of 379 MW until 2008.

With prevailing demand-supply scenario, the energy department expects at least three power projects completed and set on commercial operation between next year to 2008. This will include the 20megawatt Nasulo and 49MW Northern Negros geothermal projects of PNOCEDC and the 200-MW coalfired facility, which is a joint venture of Salcon Power and Korea Electric Power Corporation.

Mindanao, on the other hand, is already requiring immediate capacity shoring up. By next year, it can turn for additional supply to the 210-MW Mindanao coal-fired plant which is due to kick off commercial operation.

However, it was noted that this will not be enough to sustain Mindanao’s power needs, especially in the energystarved southeast corridor, which is also growing as the other core of its economic activities.

The indicative power projects logged for the area are the 8.0-MW Cabulig hydro facility in Misamis Oriental; 30-MW expansion of Minergy in Cagayan de Oro by 2007; 68MW Tagoloan hydro by 2008; 50-MW Mindanao 3 geothermal project by 2010 and 20-MW coal plant project in Sultan Kudarat by 2012. (MMV)

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