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AboitizPower invests P35-B for new capacity in Mindanao
Friday, April 27, 2012
Aboitiz Power Corporation (PSE ticker symbol: AP) is investing P35 billion to add 354 megawatts (MW) of power in Mindanao by 2015 to help address the critical power shortage in the island.
The additional capacity, which is expected to fill Mindanao's large power deficit, will come from the 300-MW clean coal facility of Therma South, Inc. and 54-MW of run-of-river hydro plants of Hedcor, Inc. Therma South and Hedcor are wholly-owned AboitizPower subsidiaries.
Mindanao currently needs around 1,597 MW daily, but existing capacities in the region can only produce 1,261 MW as of April. More than half of the power plants in the island source their energy from the Agus and Pulangi hydro stations, which are no longer capable of generating power based on their original installed capacity.
“There is an urgent need to implement a viable power strategy for Mindanao that will attract long-term investments in power, diversify the power sources and create a competitive supply market. Let us learn from the past and not provide band-aid solutions or even worst, solve the problem with expensive solutions that will hound us in the future,” said AboitizPower president & CEO Erramon Aboitiz.
Aboitiz said the biggest challenge for Mindanao is its heavy dependence on hydro sources of energy. “There is a need to diversify Mindanao’s power sources and lessen its dependence on hydro power. We think what needs to be put in place is a competitive and transparent environment where new capacity will complement the existing hydro plants of the NPC,” he said. “More investments and a competitive environment will ultimately lead to adequate, reliable and reasonable power supply needed to power Mindanao’s growth.”
To cushion the effects of the current crisis, AboitizPower subsidiary Therma Marine, Inc. (TMI) is running its 200-MW bunker-fired power barges moored in Nasipit, Agusan del Norte and Maco, Compostela Valley in Davao. It provides 192 MW to 23 electric cooperatives, distribution utilities and industrials in the region.
According to Aboitiz, TMI is the cheapest, and the most efficient oil-based power facility in Mindanao today; the average rate charged to its customers is P8.29/kWh. He explained that 90 percent of TMI's rates are for fuel and other consumables, which are not retained by the company. The remaining 10 percent of its revenue is used to pay for fixed costs, such as salaries, insurance, repairs and maintenance, and debt service, with any residual amount representing the company’s return on its investment.
"Our long-term investments in both power generation and distribution in Mindanao are a testament to our commitment to be part of the economic development of the region. We have been in Mindanao since the 1930s and want to continue to be part of its future growth," Aboitiz said. “AboitizPower is committed to support this growth by providing reliable, reasonable and responsible power supply.”
AboitizPower is the holding company for the Aboitiz Group’s investments in power generation, distribution, retail and power services. It is a major producer of Cleanergy, its brand for clean and renewable energy in the Philippines with several hydroelectric and geothermal assets in its generation portfolio and also has non-renewable power plants located across the country. The company owns distribution utilities that operate in high-growth areas in Luzon, Visayas and Mindanao. For more details, please visit: www.aboitizpower.com and www.cleanergy.com.ph.