Apo Cement helps Veco ease power-supply shortage in Cebu

Tuesday, 08 September 2009

CEBU-based Apo Cement Corp. on Tuesday signed an agreement to supply up 10 megawatt (MW) of power to distribution utility Visayan Electric Co. (Veco) as the central Philippines’ grid plunges deeper into incessant rotation brownouts.
     The agreement was signed by representatives of Apo’s mother company in the country, Cemex Philippines Corp., led by its president Sergio Menendez and vice president for planning Paul Vincent Arcenas.
Veco, the country’s second-biggest distribution utility, was represented by president Dennis Garcia and vice president for utility economics Arlo Sarmiento.
Menendez said the Mexico-based cement maker has never been into energy generation but it is offering the excess capacity of its diesel-generation units in Naga town, south of Cebu City, to help the island cope with the thinning power reserves.

“We are happy to offer our excess power that we generate to be able to address the
needs of Cebu,” Menendez said. “We hope this will ensure the continued growth of Cebu.”
With power plants in the Visayas grid down for maintenance and some unexpected conking out, major cities have been hit by regular hourlong brownouts this year, with Veco consumers getting hit several times a week lately. Apo Cement’s diesel-power plants generate 60 MW of power but the production plant only need around 50 MW.

Veco’s Sarmiento said the entry of the Apo Cement supply will greatly alleviate the impact of the rotation brownouts in Metro Cebu.
“We have always known that September 2009 is going to be critical because supply is
going to be tight,” Sarmiento said.

Unofficial estimates peg the shortage in the grid in September to be close to 100 MW with Veco off-loading up to 20 MW during peak-time brownouts.
“Ten MW [Apo Cement] will be of big help. A 10-MW shortage is definitely better than a 20-MW shortage,” Aboitiz Power Corp. chief reputation officer Sebstian LAcson said. Aboitiz Power and Vivant Corp. own and manage Veco.
Veco and the local government units in Metro Cebu, as well as private companies, have already implemented its unique interruptible load program (IPL) designed to cut off the utility’s biggest consumers during rotation brownouts so supply could be diverted to other areas.

The companies will switch to running their own generation sets during an IPL.

The Visayas Supply Augmentation Agreement, which was primarily designed by the Department of Energy to invite industries with excess power supply like Apo Cement to sell their power into the grid, has yet to be rolled out.

The dire power situation in the Visayas is set to be relieved when the first unit of the 245-MW coal-fired plant of Cebu Energy Development Corp. in Toledo City will be online by the first half of 2010. The 200-MW Kepco Salcon Power Corp. plant is also set to be operational by 2011.

The Visayas grid consumes around 900 MW at peak hours, with Veco eating up close to 350 MW.

Cemex is the Philippines’ third biggest cement maker with its Antipolo-made Solid Cement and Cebu-made Apo Cement brands.