Napocor eyes Cebu as site for 400-MW coal plant

The National Power Corp. (Napocor) is eyeing Naga, Cebu as a potential site for a 200-400 megawatt (MW) coal-fired power facility, a ranking company official said.

Napocor president Rogelio Murga said they have identified the Naga complex as one of the possible sites of future merchant power plants that investors might be interested in.

Murga said they are ready to bid out the contract for a consultant on the re-engineering study which the Department of Energy (DOE) has mandated Napocor to undertake in the light of the urgent need to put up new power facilities. Since late last year, Cebu has already been experiencing power problems. In Mindanao, it is expected that by 2005, it would need additional power while Luzon will also be in dire need for more power by 2008.

The Napocor chief said they expect to award the contract for the study by July after the bidding which will be held anytime this month.

Murga said they have already been receiving inquiries from Australian and Filipino power producers to explore further Cebu’s generating potential. The government is also promoting Southwestern Mindanao as exploration haven for coal.

"We know the area and there are studies done and eventually we will bid this out thru PSALM (Power Sector Assets and Liabilities Managemment Corp..," he said.

Napocor at present sources 50 percent of its coal supply from China, the world’s second largest coal exporter. Based on total coal requirement, domestic coal supply increased by 22 percent in 1998 to 30.3 percent by 2008.

Murga noted that the country has huge potential reserves in the Cebu and Southwestern Mindanao areas which remain untapped.

The DOE has identified Cebu as an area where small-scale coalmines are located. At least two feasibility studies, one funded by the U.S. Trade Development Program and the other by the Canadian International Development Agency, have established that it would be technically and economically viable to put up a central coal preparation plant in Cebu, which will guarantee a market or about 500, 000 tons per year for all of Cebu’s coal users.

The demand for coal is expected to increase further with the programmed commissioning of seven mine-mouth coal-fired power plants in Cebu (300 MW), Isabela (300 MW), Cagayan (300 MW), Panay (100 MW) and Zamboanga (300 MW).

Murga said two firms, including an Australian has already signified interests to look into Southwestern Mindanao for coal.

I have just signed letters of intent that if they produce coal in that area Napocor will buy the coal from them," Murga said.

The Philippines also has proven coal resources of 399 million MT or 16.8 percent of the country’s total coal resource potential of 2.37 billion MT. By 2008, the country’s coal demand is expected to increase by 6.3 percent from 9,790 MMT in 1999 to 16,898 MMT in 2008. Of the total, 80 percent are imported based on the additional coal-fired plants. About 85 percent of the total consumption will be utilized to fuel coal power plants.