Visayas needs more energy investors

DOE Assistant Secretary Redentor Delola in an interview during the 2018 Visayas Energy Investment Forum at Parklane International Hotel on Sept. 13, 2018 |
CDN PHOTO JOSE SANTINO BUNACHITA

The Department of Energy (DOE) continues on encouraging the private sector to invest on projects in the power sector.

While there are still no expected problems in terms of power supply for the Visayas in the next three years or so, DOE Assistant Secretary Redentor Delola said something has to be done as early as now.

“The bottomline is we need your investments to come in. The Visayas region is really growing and we cannot stop the development happening around us,” he said during yesterday’s Visayas Energy Investment Forum at the ParklaneInternational Hotel.

He pointed out that Cebu is especially vital in terms of power generation since most of the load and demand in the Visayas grid comes from the province, especially Cebu City.

Data culled from the DOE Visayas Field Office showed that the total installed capacity in the Cebu sub-grid, including both renewables and traditional power supplies, is at 1,062 megawatts (MW).

On the other hand, the demand peak for the Cebu sub-grid plays around 900 MW to a little over 1,000 MW.

This means that right now, the power supply is relatively able to fulfill the power demands in the province.

However, there are times when demand shoots up or there are power interruptions, which would mean that Cebu will have to get an additional supply from other areas in the Visayas, like from Negros Oriental or Leyte.

The Visayas grid can even get supply augmentation from the Luzon grid since both grids are connected, Delola explained.

“For the next three years, we still see no problem (on power supply in Visayas). But if there are no additional investments, we will really have problems by 2020 or 2021,” he added.

This is why the DOE has made its own recommendations as to ideal locations where investors can put up power plants.

For Cebu, the DOE has recommended the northern town of Compostela and Mactan Island.

“Our main considerations (in coming up with the recommendation) are the demand, the infrastructure requirement. Because if you build power plants, you need to connect to the NGCP (National Grid Corp. of the Philippines). If there’s no substation nearby, you will have to build transmission lines from so far,” Delola said.

Aside from DOE, the National Grid Corporation of the Philippines (NGCP) and the National Transmission Corp. also gave their inputs in
coming up with the recommendations.

Outside of Cebu, the agencies also recommended for the establishment of power plants in the town of Corella in Bohol and Calbayog City in Samar.

Meanwhile, Delola said the DOE is also doing its best to “revolutionize” the department in terms of their processes to assist investments from the private sector.

The DOE has formed last May a committee to review and immediately act on different pending applications for service contracts under the DOE, he said.

From as high as around 2,000 pending applications, he said they have now only around 200 pending applications, with the rest having been disposed of, either approved, rejected, or returned.

DBP loan packages

During yesterday’s forum, an official from the Development Bank of the Philippines (DBP) also encouraged representatives from the private sector to avail of financing facilities in the power sector.

Lawyer Marissa Anino, DBP assistant vice president and head of the Cebu Lending Center, said they have at least two different loan facilities available to investors in the energy sector.

These are the Financing Utilities for Sustainable Energy Development (FUSED), and the Green Financing Program.

“DBP has financed 50 players in the energy sector (under the FUSED program).

This is to close to P50 billion in approved budget amount and is payable in 15 years with a five-year grace period,” she said.

As for the Green Financing Program, the DBP has so far disbursed close to P40 billion to 155 borrowers, Anino said.