The National Transmission Corporation (Transco) has identified the Catanduanes grid interconnection project as its top priority, with four technical teams coming over last week for data gathering and actual site inspection.
Proposed by Catanduanes Congressman Hector Sanchez early in his term, the project seeks to connect the Catanduanes island grid to the national power grid through a submarine power cable from Caramoan, Camarines Sur to Asgad-Codon in San Andres town.
In a meeting with the congressman at E-Crown Hotel’s Café Bronzetti last March 10, 2022, University of the Philippines Prof. Rowaldo del Mundo, who serves as assistant to the Transco president on a consultancy basis, disclosed that the interconnection of the Catanduanes grid will serve as a model for the two other projects in Palawan and Mindoro.
He bared that Transco will complete the master plan for the three interconnection projects this June 2022.
Catanduanes was not in the original list of interconnection projects of Transco but Cong. Sanchez’s 2020 request for the Department of Energy (DOE) to study why power rates in the island have remained high pushed the province to the top of the list, the professor said.
He added that he attended that meeting where the interconnection project was proposed as a concrete solution to the problem of expensive and unreliable supply of electricity.
Even the congressman, the professor recalled, did not believe that Transco would be able to submit its feasibility study on the project by December 2020 as Del Mundo promised.
“I fulfilled that promise,” he stressed, with the study answering two key questions as to its technical feasibility and the least-cost scheme of interconnection.
“Transco’s focus now is on Catanduanes,” the power industry expert said, adding that as system operator, the corporation will establish control centers in the three islands that will be linked to the National Control Center in Metro Manila.
“Everything will start in Catanduanes,” he added, even as he admitted that the pandemic delayed the procurement process for the project.
“Hindi ganun kadali gumawa ng design,” Del Mundo said the people should understand that the process of interconnection to the main grid would take time.
For example, he pointed out, the steel posts that would carry the transmission line through 38 kilometers at the Camarines Sur side were designed for 300-kph winds to take into account stronger typhoons due to climate change.
As 10 kilometers of the power lines (two cables) will be underwater, an actual survey would have to be undertaken of the sea bottom.
ISSUE OF FINANCING
Technically, as only 69-kilovolt lines will be used, the First Catanduanes Electric Cooperative, Inc. (FICELCO) would have to finance the project as owner by borrowing P4 billion and repaying it at P500 million annually for 10 years.
But under Transco’s Built-Operate-Transfer (BOT) proposal, the project will carry a 30-year repayment period, with the corporation banking on the economic development to be brought by cheaper power to boost FICELCO’s revenues.
Aside from the planned shipyard in Virac and the P1-billion CatSU Agro-Industrial Economic Zone, Cong. Sanchez has proposed eco-zones in each of the 11 towns at 25 hectares per eco-zone.
Last December 2021, Transco asked Finance Secretary Carlos Dominguez for authority to finance the interconnection of Catanduanes to the mainland grid but was told not to touch its revenues from concession fees as it has been allocated for the payment of the debts of National Power Corporation for the next three years.
As a result, Prof. Del Mundo revealed, Transco will have to resort to corporate borrowings, with negotiations started with the Development Bank of the Philippines (DBP) for a 20-year repayment period at 4-6 percent interest per annum.
The bank does not want the project to lead to higher power rates in Catanduanes, one of the two criteria aside from the removal of the Universal Charge-Missionary Electrification (UCME) subsidy.
CONSTRUCTION DEAL BY APRIL?
But if Transco receives a proposal from the private sector agreeing to the two conditions and covering only the submarine cable section, FICELCO can sign the construction agreement by April, Prof. del Mundo stated.
Once the island grid is interconnected with the main grid, Transco will provice automated computer software using the SCADA (Supervisory Control And Data Acquisition) system which will take into account FICELCO’s power supply agreements and provide hourly schedules of dispatch with renewable energy as priority, as well as day-ahead and week-ahead projections.
The establishment of Transco’s control center beside the cooperative’s own control center at Marinawa would ensure the stability of the grid and solve the issue of the island’s small power plants.
Prof. del Mundo said even with the removal of the subsidy, the actual P14 per kilowatt-hour cost of generation in Catanduanes is expected to be reduced to P4 to P4.50kWh, not including the 81 centavo/kWh transmission fee to be paid to Transco.
The interconnection should result in a generation rate not exceeding P8 per kWh, he said.
Cong. Sanchez is expected to meet with Transco officials by this week when he flies back to Metro Manila.