A Mindanao-based company’s proposal to rehabilitate and modernize the Agus-Pulangi Hydroelectric Complex (APHC) offers an absolutely sound solution to high power rates and the island’s excessive, dangerous dependence on dirty, expensive coal.
The unsolicited proposal from Greenergy Development Corporation, dubbed Energy Storage Project: Nature’s Powerbank, is currently under review by the Power Sector Assets and Liabilities Management Corp. (PSALM). The plan aims to rehabilitate and operate Mindanao’s aging power infrastructure by pairing it seamlessly with solar energy.
Through two key innovations—Hybrid Economic Dispatch (HED) and Circular Energy for Hydroelectric Plant (CEHP)—the proposal tackles two stubborn obstacles: the seasonal water management crisis of Lake Lanao during droughts, and the daytime-only variability of solar energy compounded by the prohibitive cost of industrial batteries.
The concept behind HED is simple: treat Lake Lanao—whose waters power six cascading Agus hydro plants from Lanao del Sur down to Iligan City—as a natural battery. The lake holds potential hydraulic energy waiting to be pulled by gravity; strategically located solar load centers across Mindanao would act as the charger.
During the day, solar load centers would fire up to reduce generation demand from the Agus plants, minimizing water drawdown and allowing the lake to store more water. At night, this stored water would be released to run the hydro plants at optimum levels. This cycle can also be scaled over longer periods to keep the lake safely above its minimum critical level of 699 meters above sea level.
Meanwhile, CEHP recycles around 20% of the water used to run the turbines back upstream using solar-powered pumps. By recycling water flowing from the final plant in the Agus system (Agus 7) back to Agus 4 in Baloi, Lanao del Norte, an additional 100 megawatts of power can be generated without building a single new power plant.
The bottom line here is affordable electricity. Currently, Agus-Pulangi’s generation cost sits at around ₱3 per kilowatt-hour (kWh). Solar generation costs have dramatically plummeted to that same ₱3/kWh threshold.
Mindanao’s future depends on reliable, affordable, and sustainable power. The energy crises sparked by the COVID-19 pandemic and the Ukraine-Russia war—which caused global coal prices to spike by 400%—alongside current conflicts in the Persian Gulf and the realities of climate change, demand drastic domestic solutions.
Since the enactment of the Renewable Energy Law in 2008, the country’s reliance on renewable energy (RE) has ironically slipped from 35% down to 25%. In Mindanao, which only shifted heavily to coal in 2016, RE’s share has plummeted from a dominant 70% down to a measly 32%.
While the Department of Energy is doubling down to hit a national 2030 target of 35%, RE advocates in Mindanao are rightfully pushing for a 50% clean energy mix.
Recognizing this, loud voices are opposing any outright privatization. Wisely, PSALM has shelved plans to sell the APHC, opting instead to entertain unsolicited proposals for rehabilitation and operations under a concession arrangement—allowing the government to retain ownership while leveraging private sector efficiency.
Greenergy’s proposal is one of two on PSALM’s table, projecting a recoverable rehabilitation cost of ₱35 billion. The other proposal, from San Miguel Global Power in consortium with Sta. Clara International carries a staggering ₱70 billion price tag.
Greenergy has disclosed that if awarded the project, they would sell power at ₱3.11/kWh based on their ₱35 billion estimate. You do the math: what will the generation rate look like under a ₱70 billion capital recovery model?
The science and technology are ready. The economics are clear. So, what is holding the government back from greenlighting the proposal that secures the biggest win for Mindanao’s consumers?
Further delays carry dire consequences. Postponing the rehabilitation of this aging complex risks irreparable damage. Losing Agus-Pulangi’s output would slash Mindanao's RE share by 20%, plummeting the island's clean energy grid to a vulnerable 10% and killing any hope of meeting our 2030 climate goals.
----
The writer is the Project Director of the Consumers for Renewable Energy Action in Mindanao and Executive Director of the NGO Pinoy Aksyon Inc. Comments can be sent to bency.ellorin@gmail.com.
