DoE secures new coal projects
July 25, 2011
DoE secures new coal projects
Professing that he is elated over the fact that he can leave the power industry in 2016 crisis-free, Department of Energy (DoE) Secretary Rene D. Almendras disclosed that his department cornered investments for additional 900 megawatts of coal-fired capacity to plug supply gap in Luzon and ensure longer-term supply for Visayas.
The energy chief said, new batches of project signing would happen very soon for a coal-fired plant in Batangas with an installed capacity of 600 megawatts.
He deferred giving the name of the project proponent but previous reports indicated that DMCI Holdings of the Consunji group plans to expand the Calaca plant to double its existing capacity.
“There is another signing for 300 megawatts, also a coal plant in Visayas … it could be anytime next month,” Almendras added. He similarly dropped this as “guessing game” for the media, but there were already statements before from Global Business Power Corporation of tycoon George Ty on their plan to expand their coal plant in Toledo, Cebu.
Given the $2.0 million to $2.5 million rule of thumb for coal project costs, the scale of investments to be forked out by project sponsors could range from $1.8 billion to $2.25 billion. The additional capacities will be on-line from 2016 onwards.
The energy secretary, who at times can be a jester, enthused that the entry of these new capacities will cement his moniker from detractors as a “coal boy.”
On a serious tone, Almendras qualified that the preference for coal capacity is borne out of the current need of the country’s power system – addressing an immediate need for supply of a crumbling electricity market due to strained reserves – which if not addressed expeditiously, could turn into a full-blown crisis.
Among the options being set on the table, the energy chief explained that coal remains the most viable source for baseload generation; While the other alternatives are still fledgling at implementation stages either due to concerns on technological maturity or costs.
Over the long-term, Almendras noted that greater diversification in the power mix will come – with renewable energy getting its rightful place in country’s power development agenda; and the same goes with other plants which are also ideal for baseload and mid-merit generation – such as natural gas and geothermal plants, among others.
The Batangas project will be on top of the $1.28 billion coal plant in Subic which was unveiled Friday by project developers Meralco PowerGen of utility giant Manila Electric Company, Therma Power Inc. of the Aboitiz Group and Taiwan Cogeneration Corporation.
The first coal plant to come on stream by 2013 will be the 600-megawatt facility of GNPower.
In Mindanao, the power projects already firmed up will also be fed with coal – including those proposed by Conal Holdings in Saranggani province and the Davao coal facility of 300 megawatts to be developed also by the Aboitiz group.
Almendras noted they are not just preparing power investments to address current supply-demand dynamics, but they are also factoring in economic growth prospects being penciled in by the National Economic and Development Authority (NEDA) and the investment flows being reported by the Board of Investments.
by Myrna Velasco, Manila Bulletin