DOE re-examines cost impact of Mindanao transmission link-up

by Myrna Velasco – September 15, 2016

from Manila Bulletin

The Department of Energy (DOE) has drafted in its nine-point policy agenda for the continuation of the proposed interconnection of Mindanao to Luzon and Visayas grids, but it wants to re-examine first the cost impact on consumers.

As it previously presented to the Senate committee on energy, the department indicated that the transmission link-up may drive up electricity rates, hence, it takes cautionary approach on that sphere.

The DOE said it will be reviewing “capital recovery period” on the proposed connection of the grids; and will also be exploring other fund sources in bankrolling the project.

That had just been one of the challenges specified by the department, it raised other concerns on right-of-way (ROW) hurdles and peace and order especially in Mindanao.

The power grids’ interconnection was actually a “recycled energy policy agenda” way back to the time when state-run National Power Corporation was still being run as vertically-integrated utility.

As initially crunched by the National Grid Corporation of the Philippines (NGCP), transmission interconnection between Visayas and Mindanao could command investments of up to R25 billion.

But that was then anchored on a link-up via submarine cable from Leyte to Mindanao. A deep trench that might be traversed by the facility, however, impelled NGCP to abandon the original project blueprint.

The transmission company thus opted to do another round of feasibility study – this time exploring interconnection via Negros to Zamboanga routes.

The target is to complete that undertaking by year 2022 – and such will then set the culmination of the country’s aspiration for a centrally-connected national power grid.

The conduct of the second batch of feasibility study was already lodged with the Energy Regulatory Commission.

Timeline of completion of the study is anticipated until next year.

With interconnected power grids, the three major islands could already share power supply, albeit, there is that degree of apprehension from Mindanao consumers that this will drive up the power rates they have been paying for.