WILL THERE BE A POWER CRISIS IN MINDANAO?

Each and every businessman who recently attended the 18th Mindanao Business Conference in Koronadal City last week expressed serious concern over the truthfulness as to whether there will be a power crisis in Mindanao. The Department of Energy (DOE) confirmed this in a statement and further revealed that if the government and companies concerned will not provide a solution by the end of the year, the problem might get worst.

Certainly, there is a shortage and the critical period has been known to the government especially from the DOE’s point of view as early as 2007. The critical period had already started this year and we are facing an uncertain situation. The officials of the Davao Light and Power Company (DLPC) admitted that Mindanao is inevitably headed towards a crisis of very serious proportions. Mindanao’s major cities—Davao, Cagayan de Oro, General Santos, Butuan and Zamboanga will experience darkness, if no concrete actions to avert the power crisis will be done.

You can just image what will happen to cities like Davao, Cagayan and Zamboanga who have been heavily selling their cities as the future “ICT (information Communication Technology) Hubs for BPO’s (Business Process Outsourcing). BPO businesses thrive best in areas where there is assurance and permanence of sufficient power supply. What will happen to the tuna canneries in Gen. Santos and to the sardine plants in Dipolog without continuous supply of power?


The entire Mindanao will expect to have long hours of brownout if the power crisis cannot be averted on time. Power supply is crucial to the existence of businesses and investments in the island. We will all suffer tremendous losses; more so with the small and medium sized businessmen who may not be able to afford the cost of expensive generators. This scenario may further result to scaling down of enterprise activities which can lead to unemployment and eventually an increase in poverty


Power Demand of Mindanao
The present demand of Mindanao’s five key cities is put at 484MW while the peak demand of power users is expected to hit an average of 5.76 percent in the next five years. A strategic approach as proposed by the DLPC presented a 13.1 percent reserve capacity in order to enable the Mindanao grid to supply the total power demand of the island. This approach is based on the theory that the grid must maintain a reserve capacity equivalent to the capacity of the biggest generating plant so that in the event that a single plant fails, there would still be enough to supply 100 percent of the requirement of the power users.

Moreover, the DLPC projects that the gap between the requirement and the reserve capacity of 13.1 percent will gradually deteriorate over the next five years. Mindanao is now feeling the crisis since the 13.1 percent power reserve during off peak to ensure continuous supply of power has already dropped to one percent.

Contradicting Statements

On the contrary, the Freedom from Debt Coalition (FDC) said that research shows there is no power crisis in Mindanao. In fact, the Philippine Energy Plan 2004-2014 report of the DOE indicated a total surplus power of about 373 megawatts for the Mindanao grid. The report also indicated that there is enough power supply for the deficits of both Western Mindanao (62MW) and Southern Mindanao (233MW) which comes from the surplus power of 670MW in Northern Mindanao. FDC also found out on its own research that there is, in fact, a low demand for energy because of the current economic turmoil that is being experienced on a global scale. Most industries are slowing down operations due to the slowing down economy, thereby reducing demand for power.

Action Agenda to Avert the Crisis

However, the government identified an immediate solution by putting up three new power plants but it would take about three years to get all of them done. Among the three projects are the Sibulan Hydro, which is currently being completed, the Mindanao 3 located at the peak of Mt. Apo which is almost done and the Kabulig Hydro which is experiencing some problems. Even if these guaranteed power plants are completed, they will still project a shortage of around 400 megawatts (MW). In addition to these three plants, the Conal Holdings Corporation, owned by the Alcantaras, has unveiled a $450 million coal-fired power plant in Sarangani Province to be up by 2013. This plant is expected to generate up to 200MW of power which would be enough to sustain the requirement.

There’s another theory that this looming power crisis is caused by “transmission constraints” which is already being addressed by the National Grid Corporation of the Philippines. And that, as of April 2008, there is a 382.1MW reserve which is enough to supply whatever imbalance that may occur in power supply and demand. We are being supplied with 1,933.4MW as total installed capacity of power generating plants in Mindanao while 1,682.1MW is the dependable capacity. Plus Hedcor Sibulan and Conol Holdings in Sarangani Province supply an additional capacity of 242MW. We actually have more than enough, if this is the case.

Clearly, power shortage is a looming threat. This is the time that business, government and the various groups of the civil society should work together to avert this crisis NOW before it is too late!

(Joji Ilagan Bian is a strong and respected advocate for the development of the region. She is Chair of Joji Ilagan Foundation ( www.jojiilagancareercenter.com) ; President , Phil. Call Centers Alliance and Mindanao Tech Voc Schools Association; Mindanao Rep, Export Development Council. Email comments jojibian2@yahoo.com)