As the planned rehabilitation of the aging 1,000-megawatt (MW) Agus-Pulangi Hydroelectric Complex (APHC) in Mindanao gets underway, the Department of Energy (DOE) is reviewing the planned shutdown of the 232-MW STEAG coal-fired power plant in Misamis Oriental, which could still be needed as a backup to power the region.
Under a build-operate-transfer (BOT) agreement, SPI Power Inc. owns and operates the STEAG coal plant until 2031, when ownership is transferred to the national government. The coal plant has an operating lifespan of 15 to 20 years left and was initially proposed for retirement as part of the country’s push for decarbonization. However, this retirement plan might have to be reviewed to make up for the loss of power supply from the rehabilitation of the APHC.
(Also read: Agus hydro rehab could include third plant)
APHC rehab ill-timed but necessary
“What has eluded us for decades now is the rehabilitation of the Agus-Pulangi,” Energy Secretary Raphael Lotilla said. “If we finish the rehabilitation…it will restore an additional 400 MW of hydropower in Mindanao, which is very significant.”
According to Secretary Lotilla, the APHC rehabilitation was delayed due to insufficient funding and a surplus capacity in Mindanao, which made rehabilitating the hydropower complex less urgent in the past. However, with Mindanao now supplying electricity to other regions, ensuring Mindanao’s stable power generation has become a key priority.
“The best time for rehab was when we had excess capacity,” he said. “The challenge now is with Mindanao exporting up to 400 MW of power to the Visayas and even Luzon, and we have to rehabilitate the Agus and Pulangi plants one at a time. That means reduced capacity available in Mindanao.”
(Also read: Powering Progress: The Mindanao-Visayas Interconnection Project)
Balancing energy security with decarbonization
Given this reduced generation capacity in a region that frequently experiences power outages, the DOE’s decision on the STEAG plant will have to balance Mindanao’s present energy security needs with the country’s environmental goals.
“We need to determine whether the STEAG plant should continue running or be phased out. If Agus-Pulangi undergoes rehabilitation over the next few years, we will need backup capacity from the STEAG plant to ensure sufficient supply,” Secretary Lotilla said.
“One of the options…is the retirement of STEAG in return for carbon credits that will help finance cleaner or renewable energy capacity. So, we will have to revisit or re-examine that move,” Lotilla added.
Sources:
https://matuwid.org/doe-weighing-options-for-232-mw-mindanao-coal-fired-power-plant/
