October 12, 2015

105-MW Mindanao coal plant begins commissioning

The Philippine Star today reported that Sarangani Energy Corp (SEC), a 75%-owned subsidiary of Alsons Consolidated Resources Inc (ACR), has started commissioning the first 105MW unit of its 2x105 MW coal-fired power plant in Mindanao. The project, which is targeted to commence commercial operations in 1Q16, has an offtake contract to supply 70-MW of its capacity to South Cotabato Electric Cooperative (Socoteco II) by end-2015. A second 105-MW unit is planned for construction and is targeted to begin commercial operations by 2018.

Our take: The SEC power plant is the second coal-fired power to be commissioned in recent months. Last September, the first 150 MW unit of Therma South Inc’s (TSI) 2x150 MW Davao coal-fired power plant was declared to be fully operational. The commissioning of the second unit remains on track in early 2015. The commissioning of these base load power plants should help augment the power supply in Mindanao, which has been facing power storage in the past two years.

The Mindanao grid is heavy reliant on hydroelectric power plants, which accounts for almost half of the grid’s dependable capacity. The year’s supply situation in Mindanao could be critical especially with the threat of potential long dry spell from El Nino until mid-2016. Based on data from the National Grid Corp of the Philippines, the Mindanao grid has a deficit of 7 MW as of 6 am today. – WealthSec