(UPDATED) - Since 12 a.m. Monday, Nov. 8, 2021, the newly completed 23.3 megawatt oil-based power plant of Isla Norte Energy Corp. has powered Bantayan Island, a small island off Cebu's northern tip that is considered the egg basket and one of the top tourist destinations in the Visayas.
The operation of the P1.6 billion power plant "finally resolves the pressing demand for a stable, dependable and sufficient power supply that has, thus far, eluded Bantayan Island residents," INEC said in a statement Wednesday, Nov. 10, shortly before the plant's inauguration.
INEC took over after private power producer Bantayan Island Power Corp. switched off its generating units upon the end of its power supply contract with the Bantayan Island Electric Cooperative, Inc. (BANELCO) at 11:59 p.m. Sunday, Nov. 7, 2021. BANELCO is the exclusive power distributor in Bantayan.
Emil Andre M. Garcia, INEC president and CEO, said Bantayan Island is now ready to welcome more investments, particularly in its tourism sector. The island is famous for its white sandy beaches and festive observance of the Holy Week.
"I am 100% certain Bantayan is ready (for more investments) and I'm really looking forward to the tourism boom. The beaches are really beautiful here so I'll be coming here more often," Garcia said in a press conference shortly before the switching on ceremony at the plant Wednesday.
He cited their experience in Coron, Palawan, where they built a power plant in 2013.
"We thought that the capacity that we placed there would be good for 15 years based on the forecast of the coop there. But when steady power supply came, so did investments into the island," Garcia said.
"So now it's only been eight years and they need to do another round of CSP because the growth was so much faster than anticipated. We're hoping that the steady (power) supply will have the same effect here as well," he added.
Authority to operate
In its statement, INEC said the Energy Regulatory Commission (ERC) issued a provisional authority to operate the plant on Oct. 28, 2021.
An ERC resolution on Nov. 4, 2021 also directed BANELCO to "source out power from any supplier which it deems fit, to ensure the continuous and unhampered supply of power within its franchise area."
This directive is good for 90 days. To ensure that power supply will not be disrupted, INEC will need ERC approval for its power supply agreement (PSA) with BANELCO before the 90 days are over.
“We eagerly anticipate the granting of provisional authority by the ERC, and look forward to powering the success of our partners,” Garcia said.
INEC, an incorporated joint venture of Vivant Integrated Diesel Corporation (VIDC) and Gigawatt Power, Inc. (GPI), was awarded a 15-year PSA to fulfill the demand of BANELCO following a successful competitive selection process (CSP) in October 2019.
INEC completed the testing and commissioning of its engines in October 2021, during which it was able to augment the island’s power supply.
Bantayan suffered from outages starting 2018. These worsened during the pandemic, as rotating outages lengthened and became more frequent, Bantayan town Mayor Arthur E. Despi said.
These outages affected the businesses and livelihood on the island, he said.
Commercial establishments on the island, which are mostly tourism-related, comprise about 2% of BANELCO's consumer mix while the residential member-consumers make up the bulk at 95%, according to BANELCO general manager Lee D. Rivera. The rest are industrial, he added.
"With this new power plant and as the economy continues to improve, I think this is a big lift for us especially that the primary (growth driver) in Bantayan is tourism. As of now, tourism is slowly coming back and it's a positive (development) for the island of Bantayan," Rivera said in the same press conference.
The INEC plant has a guaranteed dependable capacity of 15 MW, which is around double the peak demand of Bantayan Island with reserve and N-1 contingency of 7.27 MW.
Walden Tantuico, president and CEO of Gigawatt Power, said the Bantayan plant is the 7th facility that they built in partnership with Vivant over the last 15 years.
Bantayan consists of three towns — Santa Fe, Bantayan and Madridejos with a combined population of around 130,000.
It is considered one of the country’s top emerging tourism hubs and a leader in the poultry growing industry. It is also a major supplier of agri-vet needs, a major part of the agricultural supply chain across the country.
Garcia said INEC remains confident in the regulatory process, and trusts that government regulators are as concerned as they are that their consumers, especially in Small Power Utilities Group (SPUG) areas, receive the reliable and stable power necessary to thrive and flourish.
“We are thankful for the support of the local governments and Cebu Gov. Gwen Garcia, the business sector, and the community who have rallied behind us,” he said.
In SPUG areas like Bantayan, often the main factors to consider when evaluating technology are stability, reliability and flexibility.
“In all our projects, we evaluate all available technologies, including conventional, renewables or a combination of both conventional and renewables (hybrid),” Garcia said.
“The INEC plant uses the latest advancements in diesel power generation technology that comply with environmental and safety standards. Our operations are also subject to periodic monitoring by an environmental unit which reports to regulators on the plant’s compliance to environmental conditions," he added.
The company's corporate social responsibility (CSR) initiatives in Bantayan, meanwhile, show the strength of commitment to meet, and go beyond, perfunctory standards-- "to fulfill our responsibility as a partner in the island’s economic development, and journey of growth,” added Shem Jose W. Garcia, executive director of Vivant Foundation, Inc. (Ventures Cebu)