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Sunday, 07 June 2015 04:42



By Jess G.  Dureza


I read reports saying that Mindanao is well and "ok" on power needs due to the many new power plants being put up. True? Not really!


Mark my words. In a year or so, there will be another acute power shortage in Mindanao. This will trigger a mad rush among power coops where to get power on a stop gap basis. They will be scrambling and stumbling all over the place to see where to get power while the new power plants are not yet in operation. That's a gap window of about four to five years or so.


NOT ROSY --- The rosy picture being painted today by the energy sector about sufficient generating capacities on a long term in Mindanao may be accurate but if we look closely, the challenge is how to address the situation on a short term before these new power plants start operating. Yes, there are big coal-fired plants being built but they will not give us electric power earlier than four or five years from today. In the meantime, where do we get the power that we need to sustain our incremental growth? Take note that even in today's power situation, Mindanao is already having a power shortage or a deficit in its demand and supply data. Hence the intermittent brownouts now occurring.


COOPS UNEASY -- The power coops are sitting uneasy today. For example several coops, or more than 20 of the 33 electric coops all across Mindanao had early on signed up for their power needs with Ayala's GN Power to cover their future power need projections. Such power sales agreement in 2010 was a breakthrough when the Mindanao coops aggregated to leverage a better price deal. Well and good!  But a reality check is that GN Power's planned 540MW plant in Kauswagan, Lanao del Norte has just started breaking ground.  The coops are now becoming restless, knowing that the original targeted start of operations in 2018 or two (3) years from now as earlier projected, is too tight given its current accomplishment which, based on latest DOE report, was less than 20 percent and still at earthwork stage. Several of these coops are no longer pinning totally their hopes solely on their supply contracts with GN Coal Power. In fact, several of them have started reducing, withdrawing or reconsidering and looking for power somewhere else. Why? Simply because the contracted power they are expecting within the next three years or so will NOT be available by then. Besides GN Power, the consuming public needed to be apprised of status of other ongoing big-ticket coal-fired power plants such as Filinvest 405MW in Misamis Oriental, Alsons Coal 200MW in Sarangani, 600MW San Miguel in Malita, Davao del Sur and the still to be constructed San Ramon 100MW in Zamboanga.


REALITY CHECK -- Their reality check is coming from the lessons of Aboitiz-owned new 300 MW Thermal South Inc. now completed in the outskirts of Davao City. Although the construction  is  completed,  it is not yet giving us power up now. Although the Therma South Unit 2 with 150MW is expected to come online this month, the other Unit 1 with 150MW was pushed back for about 10 months due to some technical glitches not of its own making. The famous "Easter Sunday Blackout" that darkened almost the whole of Mindanao caused by a rotting  machine part falling and throwing a virtual monkey wrench that stopped the power transmissions was totally unexpected. Therma South Unit 1 is still behind schedule. (And still counting.) Hence, the speculation  that within  3 or 4 years there may be a power gap that must be bridged , is now a reality. This is why a mad scramble among the coops where to get power during the interim is my projection into the near term.


STOP GAP --- This brings us  now to a situation where power coops will have to scout around for  temporary arrangements to bridge this power gap. The way forward is to install small to medium power generating capacities that are embedded or exclusively intended for specific coops for their own localities, like diesel or bunker fired modular generators. They may be a bit expensive in terms of consumer price. But past experience taught us that it's far better to have  a bit more reasonably expensive power than having "no power" at all! There are other options like installation of solar powered or small hydro or biomass plants. Whatever the option is, there must be ways done to  insulate and protect  communities from a serious deficit in the whole grid  -- an eventuality that now  appears inevitable.


DASURECO -- I am a native of Davao del Sur so I am proud to cite my province as an example of  this forward looking remedial and preemptive measure. Look at  what    the Davao Del Sur Electric Cooperative, Inc. (DASURECO) in Digos, Davao del Sur has done. It installed early  last year modular gensets with a 15MW standby capacity in partnership with Alson's Mapalad Power Company.  General Manager Godofredo Guya and his board of directors took the right , decisive steps. I understand DASURECO reduced  its contracted supply contract which it earlier signed with GN Power.



BALUT ISLAND --- Here's another example of the same  power coop's  strategic move.  Last week,  DASURECO  paved the way for the putting up of a small embedded power plant in Balut Island by signing a "waiver agreement" with PowerSource Phil. Inc.,  Being four ( 4 ) hours away from General Santos City by boat and not connected to the Mindanao power grid,  the planned new power capacity  will boost the  island economy which serves as our frontier with neighboring Indonesia.  The island is not  easily accessible but a hidden jewel at the southern  tip with a forward-looking chief executive, Mayor Virgie Cawa in tandem with husband, Vice Mayor Gerry Cawa. It is one of the towns  of the Municipality of Sarangani (not to be mixed up with Province of Sarangani in South Cotabato. ) Balut is now part  of the newly created province of Davao Occidental, carved out of Davao del Sur, but still within DASURECO's franchise area. Am I glad PowerSource Phils, Inc. agreed  to take care of power generation, operation and distribution in Balut Island. This is part of my own personal Mindanao advocacy in the private sector.


CHEAP NO MORE --  Soon, Mindanao will no longer enjoy its comparative advantage over Luzon and Visayas . The regime of low  "blended price", which is a mix of cheap hydro and  fossil (coal, bunker, diesel) power is about to come to an end. This is inevitable with the  privatization of power generation  mandated by the EPIRA law. Hydropower  ( from Agus river and Lake Lanao ) will no longer be a key player that will give a price blend that will keep cost of power cheap, especially when government starts transitioning to a regime where the private sector will have to step into its shoes as mandated by the EPIRA law.


DELAYS -- One critical area that also needs radical reforms is the unmitigated and unreasonable delay in getting permits and  approvals . Private investors had been complaining about unnecessary and institutional delays that contribute to the mess the power sector is now facing.


FUTURE -- One important  final point. There are still sticky issues about Mindanao power generation in relation to the prospective emergence of the Bangsamoro governance as a consequence of the peace agreement with the Moro Islamic Liberation Front (MILF), given that Lake Lanao, the main source of hydro power in the island region is within the territory.  We need to resolve these issues with clarity. ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it )


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Sunday, 24 May 2015 04:35


By Jesus "Jess" Dureza


The Philippines is now on a collision course with China over disputed territories that can be an international flashpoint.

A few days ago, a US spy plane making a "fly-by" over disputed territories in the "Spratly's" was "challenged" over radio by Chinese military and told to "go away". Another commercial airplane flying overhead was similarly challenged. Earlier, Philippine vessels supplying provisions to Filipino soldiers stationed in the area were blockaded. Filipino fishermen were harassed, shooed away and fired upon with water cannons from Chinese vessels. Massive reclamation and building construction by the Chinese is on going with China now telling the world that all territories in the South China Sea, irrespective of whether they are within the "exclusive economic zones" (EEZs) of different countries, are considered Chinese territory.

No doubt, we are now on a  "collision course" with China due to territorial disputes in the South China Sea.    I have a few basic information that may help for a better understanding of what this is all about.  A few days ago, I sat in a forum in Manila with fifteen (15) foreign journalists who were Jefferson Fellows under the auspices of Honolulu-based East-West Center. They were on a study tour principally to listen to some briefings and get information on our territorial dispute with China. With the Philippine Press Institute assisting in the visit, it was a good chance for me to take a good close look at what this territorial dispute is all about.  The "claim” with giant China can be a flashpoint of a global crisis, given that other countries like our ally, the United States of America can be drawn into this due to geopolitical implications.


"NINE DASH LINE" --- The conflicting claims amongst several neighboring countries over shoals, reefs or just rocks protruding from the sea during high tides had been in the "backburners" for some time now. It was there as a thorny issue but no one was really giving it special attention.  Not until China unilaterally released recently a map with lines expanding its territorial borders. It is now what is famously known as "NINE DASH LINE". It draws an imaginary line with a bigger swathe, in effect proclaiming that it exercises sovereignty over a wider area in almost the whole of South China Sea by reason of history.  It simply served notice to the whole world that territories found west of the Philippines, even though near other countries all belong to China.  To counter this, we started calling it the "West Philippine Sea" instead and filed a case before the United Nations declaring that the new China map is not valid.


TWO AREAS -- According to University of the Philippines PROF. CHITO STA. ROMANA, a former Beijing-based Filipino journalist and an expert on the issue, there are two disputed areas: first, the "Scarborough or Panatag Shoals" in Zambales province. Second, the area down south off Palawan called the "Spratlys or Kalayaan Island Group" where the claim involves other countries like Vietnam, Malaysia, Indonesia, Brunei and Taiwan.


"SCARBOROUGH" -- "Scarborough or Panatag Shoals" in Zambales province is only a rock jutting out of the sea. During low tide, some seabed will appear. This was a favorite fishing grounds of local fishermen and named "Bajo de Masinloc", being part of Masinloc municipality. The shoal also served as a place for refuge from giant waves for those caught during typhoons at sea.  However, recently the local fisher folks were shooed away from the area by Chinese vessels using water cannons.  During the time of the US bases in the 1990s it was used as a target practice area by the American forces during war drills, being close to the former US bases in Subic and Clark.

Zambales Governor Hermogenes "Jun" Ebdane, a former colleague in the Arroyo cabinet, has recently installed a hi-tech surveillance system with the help of a Canadian company to monitor Chinese intrusions to protect his fisher folks who had been deprived of livelihood.


"SPRATLY'S" --- Further down south in Palawan are located the Spratly's group of islands scattered with around 50 islands or reefs or areas that appear above water only during low tide.  Several Asian countries are "claimants". It was said that in 1947, Filipino Thomas Cloma, an owner of a maritime academy in Manila (thus earning the moniker "Admiral")  "discovered" these uninhabited islands and named the island cluster FREEDOMLAND which later became known as "Kalayaan Islands". A cement bust of discoverer Cloma still stands in the area.  He "turned over " his rights to the Philippine government in 1974, making them part of Palawan province, being only about 100 miles away from Palawan shores and well within the internationally recognized 200-mile "exclusive economic zone" (EEZ).      About 20 years later or in 1995, China started constructing fisherman's structures for Chinese fishermen. Today, China is building what looks like a military installation.


CLAIMANTS --The Philippines' territorial claims include five  (5) islets, two (2) cays (small islands) and two reefs or a total of nine (9) features orareas.  China is claiming seven (7) areas while Vietnam has twenty-two (22). Malaysia, Indonesia, Brunei and Taiwan also have their own claimed islets or areas near their own borders.  The different countries' basis for their respective claims is that although these areas are beyond their 12-mile territorial limits, these territories are within their 200 -mile exclusive economic zones (EEZ) from their continental shelf, as recognized by international protocols called United Nations Convention of the Law of the Seas (UNCLOS).  Mainland china is geographically far from these areas. But with China’s recent officially- issued  'NINE DASH LINE" map, all these territories claimed by these countries were unilaterally declared as Chinese territory which the Philippines refused to recognize.


CHINESE MISCHIEFS --- In one of our nine (9) claimed islets named "Mischief Reef” in the Kalayaan Islands, near Palawan, is where China started doing some "mischiefs" in 1983 when it called it Chungian Islands and in 1995 by putting up "fishermen's structures". To counter China’s intrusion, the AFP intentionally "beached" or "parked” our old junk-bound "Sierra Madre" naval ship in the waters nearby that became the permanent floating home base of our few soldiers guarding the area.  Today, Chinese massive dredging, reclamation and construction are on going in the different disputed shoals or reefs. In "Fiery Cross", massive reclamation is underway with an airstrip being built which will be functional soon. In the so-called "Johnson" or Mabini Reef, multi-story structures are being constructed. It is in the Recto or "Reed Bank" area where oil deposits were reportedly found, reputedly bigger than our Malampaya reserves. "Pag-asa Island" also called Thitu Island is the 2nd biggest island. Another island is called 2nd Thomas Shoal.  It was reported that Mischief Reef, also known as "Panganiban" shoal, from only 1,900 square meters in size is now more than 32,000 square meters or 3.2 hectares in size and still growing due to Chinese reclamation work.  It may become a military installation.


RECOURSE --- Feeling helpless and unable to stop these Chinese "mischiefs" and seeking redress, the Philippines filed in January 2013 a "Statement of Claim" before a United Nations agency but China "rejected" the claim and refused to participate in the proceedings. According to Associate Professor JAY BATUNGBACAL of the UP Institute for Maritime Affairs and Law of the Sea, the Philippine case is still pending before an "ad hoc tribunal" based in the Hague with five (5) member-nations sitting as a tribunal. With China's refusal to participate in the case, even a favorable decision in the future in favor of the Philippines cannot be enforced. Reports had been circulating that China was really furious when the Philippines filed for arbitration with the UN. From all indications, China will not agree to a legal settlement and has been sending signals that it prefers bilateral negotiations between the Philippines and China alone, one on one.


IMPLICATIONS --- Aside from being a Philippine-China territorial dispute, the whole world will have to sit up and take action because this is now also developing into an " international maritime" issue where China, with its constructions and planned dominance, may claim control over the world's global sea lanes where about a third of the whole world’s economic logistic system passes. ASEAN where the Philippines is a member is "consensus"- based and is described as not a good forum, given that some of the member countries are doing quiet "bilateral" talks with China. It is only the Philippines that sought  "multilateral" help by going to the United Nations.  It is opined that the Philippine move is being quietly watched by other claimant-nations as it can be a test-bed of how big allies like the US, Japan, Australia, etc. will react.


PHILIPPINE POSITION --Former Cabinet Secretary RAFAEL ALUNAN during the Cory Aquino and Ramos administrations recalled that it was in 1995 when he woke up one morning to realize for the first time that the country "lost" Mischief Reef. Today it is becoming a Chinese military installation. Now as president of the West Philippine Sea Coalition, Sec. Alunan stressed that the Philippine position must be a combination of prudence, self-reliance but forthright and to remain a strong, not weak,  link in the chain of nation claimants against China.


USA AS ALLY --  The United States  so-called strategy called  "Pivot of Asia" that will result to its more active presence in Asia may bring it also into a collision course with China with the US' declared pronouncement that its main interest in the South China Sea is "ensuring freedom of navigation".    However, there are  those who say (like party-list Akbayan leader WALDEN BELLO) that the US will not risk going to war with China just to uphold and protect the  Philippine position. The situation can be volatile.  The latest report of a US spy plane being challenged by the Chinese military during a "fly-by" over the Spratly's a few days ago, is an indication of the US concern and direction it will take. The latest events show that the US will not stand idly by and will challenge China when its intrusions are now clearly becoming an international maritime matter.

Too early yet to tell what will actually happen next but the recent incidents are instructive. They can be flashpoints. So, let's all watch closely.  ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it )

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