Aboitiz eyes coal-fired power plant in Davao

MANILA, Philippines - The Aboitiz Group is planning to build a coal-fired power facility in Davao to help augment the energy needs of Mindanao, which depends heavily on hydropower as power source.

“Mindanao’s heavy dependence on hydropower has seriously eroded power supply reliability as it is highly vulnerable to weather conditions. Generating power with the use of coal will significantly reduce our dependence on hydropower,” Aboitiz Power Corp. (APC) president and CEO Erramon Aboitiz said in a statement.

He noted that there is a projected shortfall between power supply and demand in the region from 2010 to 2014 of up to 484 megawatts (MW).

Apart from APC’s 42.5-MW Sibulan hydropower plant which was recently inaugurated, there are no other proposals to build power plants anywhere in Mindanao.

The Sibulan hydropower plant is one of APC’s biggest investments in Cleanergy, its brand of cleaner and renewable energy. It consists of two cascading run-of-river hydropower plants that harness water coming from the Sibulan and Baroring Rivers to run the plant’s turbines to generate electricity.

Aboitiz added that the staggering projected energy shortfall in Mindanao, based on present demand, is equivalent to depriving power supply completely to five major cities, namely Davao, Cagayan de Oro, General Santos, Butuan and Zamboanga.

He said Mindanao will be facing a continuing and debilitating power crisis unless new power plants are built to cover this shortfall.

“APC wants to be part of the solution to the Mindanao power crisis by building a circulating fluidized-bed coal plant within Davao City. Since time is of the essence, we are willing to take the risk and build this plant without bilateral contracts with wholesale buyers of electricity,” Aboitiz said, adding that a coal plants would be the best source of electricity from the standpoint of reliability, affordability and safety.

Coal costs substantially lower than fuel oil, hence a coal-fired power plant will have a favorable impact on electricity rates.

Davao City is likewise near Kalimantan, Indonesia, where coal supply comes from.

“Davao City is facing a precarious power supply situation. Only 20 percent of the Mindanao grid’s dependable capacity is produced by power plants located in Southern Mindanao. Being the biggest user of power in Mindanao, it is best that Davao City build sufficient power plants to ensure the security of its power supply,” Aboitiz said.

He added that Davao City’s hosting of the coal plant will give its local government units “control over the plant’s compliance of safety, health and environmental standards.”

Apart from building short transmission lines, there will be also no need to build new and long transmission lines to deliver power from the source since the source is already in Davao City itself. “This will have another significant impact on electricity rates,” Aboitiz said, also pointing out that new technologies have made coal fuel generation “greener.”

He explained that the old image of coal as a highly- polluting power source is based on old technologies.

“APC guarantees that the operations of this coal plant will meet stringent international and the Philippines’ environmental, safety, and health standards,” Aboitiz said.