MANILA, Philippines—Power giant Aboitiz Power Corp. plans to build a 200-megawatt (MW) coal-fired power plant in Davao to help provide Mindanao with the much-needed additional capacity to avert rotating brownouts.
In a text message, APC president and CEO Erramon I. Aboitiz said the coal facility, which is also expected to lessen the island’s heavy reliance on hydropower as a source of energy, may cost around P18 billion.
Aboitiz noted that Mindanao’s dependence on hydropower has seriously eroded power supply reliability, given its vulnerability to weather conditions. As such, there was a need to look for other power sources to ensure the stability of supply on the island.
One such source would be coal, which, he said, would be the best source of electricity from the standpoint of reliability, affordability and safety.
“We have to attain the right mix of renewable and non-renewable power sources that can give us the flexibility to meet our growing energy needs. This means maximizing the utilization of inexpensive power sources that cost more but can fill our supply shortfall, keep electricity prices reasonable and competitive, and cause the least adverse effect to the environment,” Aboitiz explained.
Currently, Mindanao is experiencing power supply deficits resulting in brownouts lasting up to five hours daily. Over the long run, it is expected that the shortfall between power supply and demand from 2010 to 2014 will reach 484 MW.
Aboitiz said the staggering projected shortfall in Mindanao, based on present demand, will be equivalent to completely depriving Mindanao’s five major cities (Davao, Cagayan de Oro, General Santos, Butuan and Zamboanga) of power supply.
Davao City alone, according to Aboitiz, is already 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 further warned that Mindanao will continue to face a 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 crises 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.
Since coal also costs substantially lower than fuel oil, APC also expects that a coal-fired power plant will have a favorable impact on the electricity rates in Mindanao.
It also helps that Davao City, which is the proposed site for the coal facility, is also near Kalimantan, Indonesia, where it plans to source its coal imports.
Aboitiz also assured its host city that the proposed coal plant will meet stringent international and local environmental, safety and health standards.
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