Aboitiz allots $1.5B for Subic, Davao plants

Subscribe Now February 12, 2011 at 11:04pm

Aboitiz Power Corp. is spending $1.5 billion (roughly P68 billion) to put up two coal-fired facilities in Subic and Davao to provide the much-needed additional capacities by 2014. In a briefing yesterday, APC president and CEO Erramon I. Aboitiz explained that the company was pushing through with plans to build a 600-MW coal-fired facility in Subic, which is expected to cost $1 billion, and another similar 300-MW power plant in Davao.

The planned capacities were much higher than initial plans as APC initially intended to have the Subic coal plant generating only 300 MW, and the Davao facility, 150 MW.

The APC chief said this was a good time to start building new power plants again given the country’s growing demand for electricity. It is also expected that power supply may again tighten by 2013 and 2014, unless new power facilities add capacities to the main grids.

As such, APC targets to have the two coal power plants in operation by 2014.

In Subic, APC has signed a joint venture with Taiwan Cogen International Corp. to form Redondo Peninsula Energy Inc., the vehicle company that will put up the clean coal facility in the area.

Aboitiz had disclosed that the company was finalizing its engineering, procurement and construction (EPC) contract with Formosa Heavy Industries. APC expects to start construction of the Subic coal facility within the year.

According to Aboitiz, APC would use the fluidized bed technology for the power plant for cleaner emissions and to give the company the flexibility in terms of the fuel resource it could use, whether it be coal or biomass. Initially, APC planned to source coal from Indonesia and locally listed Semirara Mining Corp.

With its coal-fed plant in Davao, APC targets to be able to service more areas in Southern Mindanao.

“There is currently an imbalance in power generation. Most of the facilities are all up north [of Mindanao], so it makes sense to put more capacity down south,” Aboitiz said.

The proposed coal facility in Davao would also relieve Mindanao of its overdependence on hydropower, which has seriously eroded power supply reliability on the island. As such, there was a need to look for other power sources to ensure the stability of supply in Mindanao.

One such source would be coal, which, Aboitiz had said, would be the best for generating electricity from the standpoint of reliability, affordability and safety.

The planned Subic and Davao coal facilities were only two of the many power projects that APC had lined up over the next several years. Other projects also included some hydropower projects in Mindanao, Aboitiz added.

With these projects, Aboitiz said the company was expected to allocate about $500 million annually over the next few years for power-generation projects alone.

Source: inquirer.net



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