DOE reviews plan for more mine-mouth plants

MANILA, Philippines - Even amid the push for cleaner power sources, industry players are still promoting the development of coal mine-mouth plants which they believe are viable investments to lower electricity costs and ensure supply security by stripping out importations and transportation of fuel to power plants.

The development of coal mine-mouth plants is being studied by the Department of Energy (DOE) since it allows the country to develop indigenous fuel sources and not rely on importation, Energy Secretary Alfonso Cusi said during the Coal Business and Policy Forum yesterday.

 “We have our own resources. So what I said is, let’s use the natural resources of the country,” he said.

Cusi said the agency would undertake a study on the concept of putting up a coal plant near the mine site.

Coal mine-mouth plants are built close to a coal mine and this translates to lower electricity cost by removing the transport cost, Philippine Chamber of Coal Mines Inc. (PhilCoal) executive director Arnulfo Robles said in the same event.

 “If the plant is separate from the mine site, there’s handling that will add up to the cost of coal [power]. So if you put up the plant near or adjacent to the mine site, you remove that cost. and that basically reduces the cost for coal, which is the fuel for the power plant,” he said.

Based on a study co-authored by Robles, the cost of generating electricity from mine-mouth plants is estimated between P2.61 per kilowatt-hour and P4.45 per kwh.

The study showed there are 10 potential mine sites for mine-mouth plants which are near the electricity grid and substations.

 “The only way these mines can be viable is by putting up the power plant as close as possible,” PhilCoal chairman Rufino Bomasang said in the same event.

 “Otherwise, if you do not put up these mine-mouth power plants, these available resources will never be developed,” he said.

However, the development of mine-mouth plants face transmission issues, since coal mines are usually located in remote areas, and public acceptance.

 “Mines are site specific, normally they are in the remote areas where the power need is not huge. So what you do is come up with a transmission highway,” Robles said. “The second is social acceptability. Those are the things you have to consider as well other than the cost of producing electricity.”

Environment groups are urging the government not to allow the development of coal plants which are seen as a major contributor to carbon emissions and the degradation of the environment.

But Marcial Ocampo, a financial consultant for energy projects, said there is potential to shift from coal to renewable energy by developing mine-mouth plants.

He said mine-mouth power plants using circulating fluidized bed combustion technology and low calorific value lignite – a type of coal mostly found in the country – are convertible to biomass-fired power plants, which converts waste materials to energy.