Looming power crisis in Mindanao: real, or bogey?

IS THE alleged looming power shortage in Mindanao as projected by a government agency and some private companies, real or just a bogey calculated to serve some selfish interests?
This question was raised this week when an economist from the University of the Philippines-Diliman expressed doubt over claims by the Department of Energy (DOE) and some power generating companies that Mindanao will shortly suffer island-wide power outages because of the failure of the power sector to generate new electric power capacity as an adjunct to existing hydropower plant and other power sources.
UP professor Dr. Maria Teresa Diokno-Pascual, was quoted in an e-mailed press release that she doubts there will be a power crisis in Mindanao.
Dr. Pascual, reportedly an economist, has been studying the country’s electricity demand projections. She claims there appears to be little, if no statistical, basis for forecasting demand for electricity.
In earlier news stories and press statements, the looming power crisis was reportedly predicted by the DOE, the Aboitiz Group, whose subsidiary Hedcor is developing power plants in many parts of the country, and the Alsons Group which is also in the same business.
Instead, she advised government to put primacy on the need of millions of people for water and the protection of the Tamugan-Panigan River.
Alsons is developing a coal-fired plant costing $450 million in Sarangani, while Hedcor of Aboitiz is embroiled in a conflict with the Davao City Water District over the right to develop the Tamugan-Panigan River complex in Calinan.
Dr. Pascual was in Davao City to address consumers and environment advocates during a recent forum entitled “Power Over Water: Creating a Crisis in Davao” at the Mindanao Training and Resource Center in Bajada.
Pascual explained that in looking at this crisis in Davao, it is necessary to revisit government and private sector power projections and what is driving growth in Mindanao and what kind of development do people in Mindanao want.
She said she found government projections on energy needs often hard to believe because the estimates do not come from the ground. She said the power crisis bogey has often been used to force the people to accept controversial projects.
“Yet, historically, if you look at the time when the supposed crisis should have hit, sobra-sobra pa ang supply ng electricity dahil mali-mali ang projections nila,” one news account quoted her as saying.
Defending the power sector, Joseph C. Nocos, vice president for business development of the ALTO Power Management Corporation, a member of the Alcantara Group, said that “probably we’re looking at different sets of assumptions.”
Nocos said the DOE and power sector’s assumption that power demand will grow by 10 percent is based on historical precedent.
“We looked at the growth rate pattern for power demand in Mindanao over the last 10 years and the number that we’re getting is close to three percent per annum,” he said.
Nocos added that the projections of the DOE and those of the Aboitiz and Alcantara groups did not even take into account new commercial and industrial loads that are going to come in, and that the projections did not yet include the load needed by Robinson’s shopping mall and SM which would need a total of five megawatts.
“Of course, there are other developments, like for example, if the Hanjin Shipyard in Cagayan de Oro comes on stream, that’s a minimum of 100 megawatts of new load that is not considered in the projections,” Nocos said.
The Alsons executive also took exception to ugly stories that the whole power crisis thing is being drummed up and that the growth in demand for power will really come from mining companies. “We don’t know really if any of these investments in mining will come in, but those investments are not considered in the projections.”
“Our growth projections, like the ones of the DOE, are based on empirical data subjected to rigid statistical calculations that will ensure that our projections are correct,” he said. “We cannot invest in a power plant based on wrong assumptions or concoct demand when there is none.”
“Remember, we are investing $450 million, or almost P20 billion. We cannot afford to make a huge investment not based on solid empirical data.”
He also said the other thing that must not be overlooked is the crisis of power cost.
“Mindanao is dependent on hydro and no new hydro capacity is coming in, so what will happen?”  He said that while demand is growing, the hydro capacity remains fixed, so utilization of non-hydro capacity or oil-based capacity is going to increase and that will increase our cost of power,” Nocos said.