Aboitiz subsidiary finds new buyer for power barge output

MANILA, Philippines - A subsidiary of Aboitiz Power Corp. (AP) has acquired a new buyer for the output of its two diesel power barges in Mindanao.

The Energy Regulatory Commission (ERC) said it approved the application for an energy supply agreement between AP unit Therma Marine Inc. and Zamboanga Del Sur Electric Cooperative Inc. (Zamsureco I).

Under the supply deal, Therma Marine will provide the electricity needs of distribution utility Zamsureco I for three years starting this year.

“The contract energy to be made available by Therma Marine to Zamsureco I is fixed on a monthly basis equivalent to 5,000 kilowatts,” the electric cooperative said.

Therma Marine and Zamsureco I told the ERC that the Mindanao grid is currently experiencing rotating outages given low output. Specifically, a total of 600 megawatts (MW) is needed by the grid in 2015 to meet demand at that time.

“[Zamsureco I’s] actual and forecasted load data for the contractual period reveal that the load requirements of its customers within its franchise will consistently increase during the contracted period,” it added.

Zamsureco I expects its energy requirements to grow 5.41 percent annually until 2015.

The electric cooperative is in charge of power distribution in municipalities like Aurora, Dimataling, Dumalinao, Mahayag, Midsalip, San Miguel, Tukuran, Pitogo and Vincenzo Sagum, all in the province of Zamboanga del Sur.

Therma Marine, for its part, owns the 100-MW Power Barge 117 and the 100-MW Power Barge 118, which it won in an auction in 2009 for $16 million and $14 million, respectively. Power Barge 117 is located in Nasipit, Agusan del Norte while Power Barge 118 is located in Maco, Compostela Valley.

In 2010, Therma Marine conducted a series of road shows to market the 50 MW capacities of the two power barges.

Therma Marine and Zamsureco I signed the energy supply agreement last June, which the ERC provisionally approved in October.

In June, Therma Marine secured regulatory approval to provide electricity to Camiguin Electric Cooperative Inc.

At the height of the power crisis in electricity-starved Mindanao in the first half of last year, the Department of Energy required distribution utilities to secure their needs from all available power sources that include expensive output from diesel power barges.

To date, 56 percent of Mindanao’s electricity requirements are provided by hydropower plants whose output drops in the dry season.

Electricity produced through coal and diesel account for 18 percent and 17 percent of Mindanao’s power supply, respectively.

As of September, Therma Marine has supply contracts with 23 electric cooperatives and distribution utilities in Mindanao.

AP is investing P35 billion to add 354 MW to the Mindanao grid, 54 MW of which will come from the run-of-river hydro plants of Hedcor Inc. and 300 MW from the clean coal facilities of Therma South Inc.

AP is the holding company for the Aboitiz Group’s investments in power generation, distribution, retail and power services. It is into several coal-fired, hydroelectric and geothermal assets across the country.