Aboitiz Power may expand Mindanao plant capacity

MANILA, Philippines -  The $546-million, 300-megawatt (MW) coal-fired power plant of an Aboitiz Power Corp. (AP) subsidiary in Southern Mindanao can be expanded anew if there is increased demand in the region.

Therma South Inc. (TSI) can add another 300 MW of generating capacity to the Mindanao grid if it continues to face power shortages, an executive said.

“As of now, we are not talking of expansion but if there is a need, the group is open to expanding,” said Manuel Orig, AP’s first vice-president for Mindanao Affairs.

He said the place can be expanded to add another 300 MW.”

In June last year, the Davao City Council endorsed TSI’s power plant project. TSI will use clean coal technology, which seeks to reduce harmful emissions.

The additional capacity will depend on the supply and demand situation after the Davao coal plant is completed in 2015.

“It depends on the number of players that are coming in with us in Mindanao. But as of now, we are the only one who has started building already,” Orig said.

So far, only Sarangani Energy Corp. (SEC), a partnership between Alcantara-led Alsons Consolidated Resources Inc. and Japan’s Toyota Tsusho Corp. has committed to put up another power plant in Mindanao. SEC plans to build a 105-MW coal plant in Sarangani.

Late in June, TSI signed a deal with contractors and suppliers for the construction the clean coal-fired power plant in Davao City and Davao del Sur.

“We hope to finish it on schedule, which is 2015,” Orig said.

Orig said the first phase with a capacity of 150 MW will be ready in the last quarter of 2014 while the remaining capacity will be completed the following year.

The Davao coal project will generate up to 2,000 direct and indirect jobs during the estimated 37-month construction period.

“AP has put up the funding because the crisis in Mindanao is getting so severe and AP is determined to alleviate the situation,” Orig said, adding that securing partners might take time.

Orig said the company has yet to sign supply contracts for the new generating capacity but marketing the electricity will be easy given the power shortage.

The electricity-starved Mindanao grid suffered from two- to four-hour power outage in January to May due to a supply shortfall.

To date, the Mindanao grid still suffers from around two hours of rotating brownouts due to a shortage of 190-300 MW.

AP is investing P35 billion to add 354 MW to the Mindanao grid, 54 MW of which will come from the hydro plants of Hedcor Inc., and 300 MW from the clean coal facilities of Therma South Inc.

AP is the holding company for the Aboitiz Group’s investments in power generation, distribution, retail and power services.

The listed firm will spend P170 billion in the next three years for its new power ventures and for the rehabilitation and upgrade of existing assets.