Gov't open to converting BNPP into gas-fired facility

Posted at 07/24/14 9:00 AM

MANILA - The government is open to proposals to convert the mothballed Bataan Nuclear Power Plant (BNPP) into a natural gas-powered facility to meet the country’s growing energy needs.

Secretary Herminio Coloma Jr. of the Presidential Communications Operations Office said yesterday the matter will be studied carefully to determine if it would be beneficial.

He said a previous study on the conversion of the BNPP should be reassessed to determine its viability for the government and interested investors.

Proponents of the conversion have said operating the plant would be easy because the country has natural gas in Palawan.

They said the government could convert the plant to produce 1,800 megawatts of power instead of spending P26 million every year for its maintenance.

This was being proposed by private investors, and maybe it was time to give it serious study, Coloma said.

A South Korean firm has reportedly expressed interest in converting the BNPP into a coal-powered plant.

Proactive stand

Coloma said the government is taking a proactive stand in anticipating a power shortage next year and making sure there will be enough supply.

“The DOE (Department of Energy) anticipates that between March and May of 2015, there could be a possible shortfall of 200 megawatts,” he said during a press briefing.

“(Energy Secretary Jericho Petilla) clarified that he was only being proactive in telling the public that there might be a shortfall during the summer months that even for a brief period it should not cause any problem for the people,” he added.

He said Petilla sees the need for the government to study whether the declaration of a state of emergency, or crisis in the power sector, is warranted way ahead of the projected time of shortfall.

Coloma said “dynamic” factors such as an increase in the demand for electricity due to economic growth as well as unscheduled breakdown of old power plants contributed to the power shortage.

He said the shortfall might be incurred despite the construction of several power plants that would be operational by the second half of 2015.

Coloma also stressed that the grant of emergency powers to the President is just one among the options being considered.

96.8 percent restored

Meanwhile, the Manila Electric Co. said it has restored power in 96.80 percent of its franchise area as of 2 p.m. yesterday.

In Metro Manila, Meralco said 100 percent has power at the circuit level, except for isolated cases or households with severely damaged lines.

In its latest advisory, Meralco said restoration of power in the provinces also improved as of 2 p.m. yesterday, with 86.23 percent restored in Batangas, Bulacan (99.76 percent), Cavite (97.98 percent), Laguna (88.37 percent), Quezon (65 percent) and Rizal (99.71 percent).

In Bicol, the 69 kV lines of the National Grid Corp. of the Philippines are still down, but Petilla said the lines should be up and running in a week’s time.

Ease rules

Sen. Paolo Benigno Aquino IV said the rules for the entry of new investors in the power sector, particularly those that intend to put up new power plants, should be eased.

“Many companies want to invest in power generation but they are driven away by the slow and tedious process in getting a permit to build power plants,” he said.

Aquino, chairman of the Senate committee on trade, commerce and entrepreneurship, lamented the process for the establishment of new power plants in the country requires as many as 165 signatures. He said another four to five years are also needed to construct the power plants and have them integrated into the power grid.

Aquino said power outages are unacceptable as it would bring about significant losses to businesses and affect the economy.

“If we have more generating plants, even if four or five shut down, the market should be able to sustain our energy needs,” he said.

No need

The Association of Major Religious Superiors of the Philippines (AMRSP) said there are enough laws to resolve the impending power crisis.

“President Aquino does not need emergency powers. We have already existing laws that would handle the matter. We just need to fully implement them. They also have to look back at the EPIRA (Electric Power Industry Reform Act) because that is one of the reasons why we are having this problem,” AMRSP executive secretary Fr. Marlon Lacal told Radio Veritas.

He said Petilla should do more to resolve the power crisis. “I think he is trying his best, but his best is not that good enough,” he said.

Basilan Bishop Martin Jumoad noted that rotational blackouts in Mindanao have worsened compared to last year.

“There is always brownout in Basilan, from 6 a.m. to 6 p.m. in Isabela City’s business district… This is a very big problem for us,” he said.

Specific powers

The Partido ng Manggagawa (PM) said the emergency powers to be provided by Congress must be specific to avoid possible abuse.

“The emergency power must be utilized to bring the government back into the generation sector to address supply shortage caused by the failed regime of EPIRA, build our renewable energy capacity, rehabilitate ailing electric cooperatives and arrest industry fraud now prevalent in the privatized power industry,” said PM spokesman Wilson Fortaleza.

He said the emergency power should also be the reverse of what was granted to former President Fidel Ramos in 1993, which was used to facilitate private contracts.

“The powers provided to Ramos in 1993 created a bigger problem, that is, oppressive rates due to erroneous power contracts with independent power producers or IPPs,” he pointed out.

The labor group also asked the government to consider taking back the transmission sector that should not have been privatized in the first place.

But before seeking emergency power, Fortaleza said Aquino must first declare EPIRA a failure.

“Escalating rates and diminishing supply were the biggest legacies produced by EPIRA during the last 13 years,” he said.

PNoy's economic legacy

Luis Manuel Corral, convenor of Nagkaisa Labor Coalition, warned that the President’s economic legacy and goals of inclusive growth are at stake because of the power crisis.

“If we have no power, there will be no investors, there will be no jobs,” he said in a press briefing in Quezon City.

He called on the President to create a task force composed of different government agencies and representatives from different sectors to address the power crisis.

He said the proposed task force will formulate strategies and objectives to address the crisis, saying the solution proposed by Petilla involving generator sets and power barges are merely band-aid solutions.

“We cannot just provide technical solutions to what essentially is a policy and technical problem,” he said, adding that the solutions proposed by the DOE chief would result in higher electricity costs.

“If the answer is expensive power because of power barges… then investors will not come in,” he said.

Corral said they support the declaration of a state of emergency, but there is a need for the government to show its clear objectives to ensure power security and achieve competitive power rates.

He said a “full options approach” based on what is possible and practical rather than profitable should be considered.

“We are at the mercy of power generators. (The government) policy is being set by the private sector. Let us not over rely on the private sector,” he said.

Corral also dubbed as “drawings” the power outlook of the DOE, saying some of the plants included in the plan still do not have funding sources. – With Marvin Sy, Mayen Jaymalin, Janvic Mateo, Evelyn Macairan, Iris Gonzales