The reason: Most of the sugar mills use very old and standard motors.

Under the European Union project “Switch to High Efficiency Motors,” The Institute of Integrated Electrical Engineers of the Philippines (IIEE) is spearheading a forum on March 11 that will have investors in the sugar industry meeting bank executives to exchange views on effective financial schemes that can support the industry’s switch to high efficiency motors (HEMs).

HEMs project manager Marvin Ryan Bathan said the “Forum to Address Road Blocks to Financing Sugar Millers’ Energy Efficiency Projects” will bring together the two sides in one venue to gain a clear perspective on ways to develop the country’s sugar industry.

“The HEMs project aims to increase the deployment of more efficient motors and drive systems in Philippine sugar industries. This forum will provide bankers a briefing on the current status of the sugar industry and provide sugar millers information on financing schemes available that can facilitate their switch to HEMS,” Bathan said.

The consortium expects that a switch to HEMs will pave the way for sugar millers to generate excess energy which they can offer to the grid to augment electricity supply and help abort a power crisis.

The move is also aimed at strengthening the position of the local sugar millers in light of the ASEAN integration which is expected to bring increased competition with the lowering of tariffs.

Bathan said the HEMs project aims to facilitate the replacement of old and standard motors with high efficiency motors.

Based on the two motor audits conducted for two sugar mills, a total of 12,511,746 kwh annual energy could be saved and sold to the grid. This is equivalent to 17 to 24 percent energy savings for motors in sugar mills.

There are 17 sugar mills in Negros Occidental. Most of them are running out of canes. One reason is the distribution of large cane fields into five-hectare pieces under the land reform program.

The sugar industry was pampered to complacency by the Laurel-Langley Agreement which gave a special price – way above the world price. After the agreement expired in 1976, the sugar industry found itself unable to compete in the world market.

The names of the two sugar mills were not disclosed but the audits were conducted on the second and fourth quarter last year. At a FIT (feed-in-tariff) of P6.63 per kwh, the annual savings is equivalent to P82,952,876.

The $8.30-million investment in HEMs and $4.60 million annual savings is from the scoping study funded by the International Finance Corp. These figures are true for the 20 companies representing various industries who participated in the scoping study.

Expected to be present during the forum are Sugar Regulatory Administration head Maria Regina Bautista-Martin, Philippine Sugar Millers Association president Francisco Varua, Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) secretary general Octavio Peralta, Climate Technology Initiative Private Financing Advisory Network Philippine country coordinator Rafael Coscolluela, and Cofely Philippines general manager Raymond Marquez.

Aside from IIEE, others involved in the consortium are the European Chamber of Commerce of the Philippines, Asia Society for Social Improvement and Sustainable Transformation, ADFIAP, Association Action for Sustainable Development, and the International Copper Association Southeast Asia.

Source: Malaya Business Insight