Aboitiz to send geothermal power to Cebu from Tiwi

August 26, 2009 CEBU CITY — Leading renewable energy producer Aboitiz Power Corp. is in talks with the National Grid Corp. of the Philippines (NGCP) for the trailblazing transmission of geothermal power from Luzon to the Visayas, where supply has been tight since summer.

Erramon I. Aboitiz, Aboitiz Equity Ventures, Inc. president and chief executive officer, said they were hoping to send as soon as possible at least 10 megawatts during off-peak hours through the existing submarine cables connecting Luzon to Leyte and Leyte to Cebu.

Aboitiz Power is a unit of Aboitiz Equity Ventures, the listed holding company of the Cebu-based Aboitiz family.

"We hope [this happened] yesterday," Mr. Aboitiz said in a press conference following the launch in the Visayas yesterday of the new Aboitiz Power logo and Cleanergy brand.

But several constraints would have to be overcome first.

Juan Antonio E. Bernad, executive vice-president for strategy and regulatory affairs of Aboitiz Power, said the biggest problem is "crossing two grids" — from the Luzon grid to the Visayas grid.

"This is the first time that it’s going to happen. We’re working with the regulator (Energy Regulatory Commission) and the transmission company (NGCP) to see how this will be possible," Mr. Bernad said.

He said protocols would have to be established, charges determined, and ancillary support services provided. A metering and monitoring scheme will have to be put in place.

The Leyte-Cebu submarine cables currently transmit 360 MW from the geothermal fields in Leyte. If Aboitiz Power is allowed, it can transmit power only during off-peak hours from Luzon, especially from its Tiwi-Makban geothermal complex.

"The constraint of the lines is that we can use it for only a couple of hours a day," Mr. Bernad said.

The initial 10 megawatts that Aboitiz Power wants to bring in from Tiwi-Makban, particularly from the 289-MW Tiwi plant in Albay which is closer to the Visayas, will be for power distributor Balamban Enerzone Corp., also an Aboitiz unit.

Balamban Enerzone serves the West Cebu Industrial Park in Balamban, where shipbuilder Tsuneishi Heavy Industries (Cebu), Inc. is carrying out expansion plans.

"We have seen some tightness [of supply] there, but we’re also getting some power from more expensive generators," Mr. Aboitiz said, referring to Balamban Enerzone’s existing contract to get power from a diesel-fired power plant owned by Toledo Power Co.

Mr. Aboitiz said importing power from Luzon, particularly the Tiwi plant, would immediately provide Balamban with power at lower cost.

"Maybe in the future, that [power imported from Luzon] can be increased," he added. In May, Aboitiz Power took over the 747-megawatt Tiwi-Makban geothermal complex.

This brought its generating capacity to over 1,000 MW and market share to 11% in the Luzon grid and 10% in the entire country.

The Tiwi-Makban complex, Aboitiz Power’s first geothermal asset, also made Aboitiz Power the largest renewable energy producer in the country.

Mr. Aboitiz said they were also exploring other ways to augment power supply in Cebu, Negros and Panay.

Aboitiz Power is talking with various sugar mills in Negros for the production of bagasse-based power that will be marketed to distribution utilities in the grid.

The Cebu-Negros-Panay grid has a total dependable capacity of about 976 MW. But demand, including the required spinning reserve of 180 MW, reaches nearly 1,100 MW.

The supply situation is expected to stabilize early next year, when the first of the three 82-MW coal plants being built by Aboitiz Power and its partners under the Cebu Energy Development Corp. is completed.

Cebu, which requires a total of over 500 MW daily this year, currently has a dependable capacity of less than 300 MW on its own. With the completion of the coal plants, Cebu would have sufficient power supply.

Despite this, Mr. Aboitiz said they will continue to pursue solutions that would meet the growing demand in Cebu and the rest of the Visayas.

"The coal plants would be enough for now. But demand continues to grow," Mr. Aboitiz said.

Aboitiz Power’s new logo, the so-called power spiral, represents the company’s commitment to keep finding better energy solutions and provide these at the least possible cost and the least adverse effect on the environment.(Bworldonline)

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