The complete picture16 April 2001
A database of large and mini hydro power schemes in the Philippines is now available, providing a complete overview of hydro opportunities in the country. Tim Sharp describes how developers can get the full picture on Philippines potential
A comprehensive database of large and mini hydro schemes in the Philippines provides the first-ever overview of hydro opportunities in the country. The database was developed in June 2000 by the US National Renewable Energy Laboratory (NREL) for the Philippines Department of Energy (DOE), and it brings together data from nine different government and private sector agencies, most of whom had previously worked independently (see panel below). Participants have pledged to continuously update the database as new information becomes available. There are also plans to expand the database to eventually include potential micro hydro sites.
The database consists of six tables which cover existing and proposed mini hydro projects defined as 100kW to 10MW, existing and proposed major hydro projects above 10MW, and Philippine electric utility and co-operatives membership. When these data are combined with government policies on hydro power development, a clear picture emerges of the scope, scale and constraints that the sector faces.
Table one of the database lists 55 existing mini hydro projects throughout the country. The projects have a total combined installed capacity of 74.5MW. However, 19 plants (35%) were not operating at the time of the survey, so that the active plant installed capacity is substantially less.
The Philippines hydro fleet includes plants which were built as long ago as 1930, but most have been built in the 1980s and ‘90s. Not surprisingly, the most successful plants tend to be new plants, owned by either the National Power Corporation (NPC), the Hydro-Electric Development Corporation (HEDCOR) or the Northern Mini-Hydro Corporation (NMCH).
The main data headings for each project in the database include: installed capacity, project owner, user or purchaser of output, project type and year commissioned. The database also includes a particularly revealing comment section – for example, for the Bansud project in Oriental Mindoro, it states: ‘NEA reports 65% completion of construction before money ran out’.
The data can be compared with DOE statistics by geographic region which contrasts installed mini hydro capacity with potential. The DOE may overstate the installed capacity but the crucial point is that less than 10% of the country’s mini hydro capacity has so far been developed.
Tapping mini hydro potential
Substantial work is going ahead to tap the potential hydro power of the Philippines. Table two of the NREL database lists 88 proposed projects. All have been studied to at least feasibility level. The table also lists the project study sponsor (which is often the National Electrification Administration) and the permit and approval status where known.
The total combined proposed installed capacity is over 300MW (three to four times the present level) and the average capacity will be 4.4MW (three times larger than present projects). However, the comments section reveals considerable uncertainty over many schemes. It is therefore unclear how many new schemes will actually be built.
What is clear from other data is that at least 17 projects will be built by 2008. The DOE lists 12 projects whose details can be extracted from the NREL database. A separate Financing Energy Services for Small Scale End Users (Finesse) programme sponsored by the Development Bank of the Philippines (DBP) has another five projects in prospect. These are not in the database.
The DOE has targeted 110MW of additional mini hydro capacity to be built between 1999 and 2008, but the total capacity of the 17 identified projects is only around 86MW. More projects are required. The 12 DOE projects will have an average capacity of 6.6MW and a planned plant factor of 61%, nearly double that achieved so far.
These figures are not just wishful thinking. For its part, the Philippines Republic Act 7156 offers investment incentives to mini hydro project developers. These are:
• A special privilege tax of 2% of gross sales.
• Duty free import of machinery, equipment and materials within seven years of the contract award.
• 100% tax credit on domestic capital equipment for seven years.
• 2.5% special realty tax rates on equipment and machinery.
• Value added tax exemption.
• Income tax holiday for seven years.
In addition, a series of domestic and international conferences and seminars are spreading the word about hydro opportunities in the Philippines.
All this publicity is bringing results. For example, the three Dapitan projects are likely be built as a cascade by a single developer, Smith Bell, whose involvement is a direct result of a province level DOE-sponsored meeting in Zamboanga del Norte. Similarly in November 2000, Kyushu Electric Power announced that it has been awarded a Japan External Trade Organisation (JETRO) contract to study the feasibility of the Batang-Batang project.
The large hydro tables break less new ground. Even so, database tables three and four provide useful detail and context for the country’s existing and proposed large projects. An important issue that emerges is that although NPC has put many projects up for BOT (build, operate and transfer) tender, relatively few contracts have been signed.
Table three of the database lists 19 existing large hydro projects with 2779MW of combined installed capacity. This list includes the 345MW San Roque project which is due to be commissioned in 2004, as well as Casecnan (150MW) and Bakun (70MW) due to be commissioned in 2001 and 2003 respec- tively. A more accurate figure is therefore around 2200MW.
Table four of the database lists 55 proposed projects totalling some 3300MW or 1.5 times the present installed capacity. However, only nine projects will exceed 100MW of which three – Agus III (225MW), Pulangi V (218MW) and Bulanog-Batang (132MW) – are already in the national development plan to 2009. Of the remainder, the hotly contested Diduyon will be the largest with Matuno (180MW), Uguiban and Binongan (both 175M) accounting for much of the remaining capacity.
Of the major projects in the plan Casecnan is scheduled to be commissioned this year, Bakun in 2003, San Roque in 2004, the extensive CBK project in 2005, Tagoloan II (68MW) in 2006, Agus III in 2007, Pulangi V in 2008 and Bulanog-Batang in 2009. The last four projects are located in Mindanao.
The remaining two tables of the database provide valuable background to the industry. Table five of the database lists the 19 electric utility (ie transmission and distribution) companies in the country, including 1998 data on total customers, peak load, energy sales and power revenue.
Meralco dominates the scene with 3.2M customers, 3.8GW peak load and 81B pesos (US$1.6B) revenue. Its closest rival, Visayan Electric Company (VEC) has only 216,000 customers, 211MW of peak load and 4B pesos (US$0.08B) revenue during the same year.
Finally, table six of the database lists the Philippines’ 120 electric co-operatives which, partly because they form the backbone of rural electrification, constitute a powerful political base as the Association of Philippine Electric Co-operatives (APEC).
As with the utilities the table gives names and locates and provides 1995 operational data for each co-operative. It also gives the NEA’s 1998 performance rating. Over two-thirds of the co-operatives are considered satisfactory – either an A+, A or B rating. All 17 projects now planned, will be operated by A grade co-operatives. However, 15% of the co-operatives have an E rating. Any potential mini hydro developer should consult table six of the database.
Mini hydro clearly offers more and better opportunities than large projects which seem likely to continue to face difficulties.