DAVAO CITY—Local governments have been cautioned on entering into contracts for coal-processing and coal-fired power plants, saying that mounting global fear of operating nuclear power plants may prop up the price of coal soon and may end up more burdensome to pay and operate.
Catherine P. Maceda, adviser of the Senate Committee on Climate Change, told a climate-change conference at the Marco Polo Hotel here on Saturday that coal’s promise of cheap power may be discarded by the mounting preference for other sources of power than nuclear power in the aftermath of the nuclear power crisis in Japan.
“Eventually, the price of coal may increase. This may even become too expensive for local governments to pay or operate in the long run, aside from being dirty to the environment,” Maceda told the BusinessMirror here after she cautioned local chief executives attending the conference, an activity held as a prelude to last Saturday’s Earth Hour, the simultaneous switching off of lights for 60 minutes throughout the world.
But she said coal was a “bad” preference for a source of power despite its cheap price. “We should rather develop more renewable sources of energy because these are ours, and sooner, because of the law on renewable energy, prices would go down.”
However, she told local chief executives to look at the terms of the contracts with companies offering to build coal-processing plants. “I hope that they would not enter into long-term contracts because we would expect more interests in developing renewable-energy sources because of the law.”
“And we would expect prices to become affordable in the long run,” she said. “They should demand for clean coal if ever they would enter into contracts.”
Arturo Milan, executive vice president and chief operating officer of the Aboitiz-owned Davao Light and Power Co., said the application of Aboitiz Power to put up a coal-fired power plant in Davao City was indeed that cheapest alternative source for the Davao Light to meet the power requirement of its franchise area and the annual 6.1-percent power demand of this city.
Aboitiz Power has assured Davao residents of developing clean-coal energy as it brought the city councilors to the Stead Coal plants in Cagayan de Oro City to take an ocular visit of the operation of the plant during the last five years.
“What we are concerned with is having a base load that is dependable and cheap,” he said.
Davao Light’s 306-megawatt (MW) requirement for households and industries was supplied by the National Power Corp. (260 MW) and the remaining 46 MW by the Hedcor (42 MW by Hedcor Sibulan and the 4 MW from Hedcor Talomo). The Hedcor is a sister company engaged in power generation.
Davao Light is the distribution company of the Aboitiz group covering the cities of Davao and Panabo of Davao del Norte, and the municipalities of Braullio Dujali and Santo Tomas.
Milan told the public forum with resource speakers in the conference that the successive episodes of the debilitating impact of the dry spell phenomenon El Niño in 1992, 1996, 2004 and 2008 have ruled out renewable water source as undependable.
The El Niño occurrences forced severe power blackouts and rotations among factories or purchases of power-generation sets. The Mindanao grid depends on 53-percent supply from the hydroelectric power plants along the Agus River of the two Lanao pro-vinces and the Pulangi power plant in Maramag, Bukidnon.
“I am confused. When we raised our rate by eight centavos, everybody was complaining. And when the El Niño phenomenon happened, the public has questioned why we cannot supply them with power. And when a coal plant is being set up here to give us cheap power, there are those who opposed it,” he said.
Milan said a Belgian company has proposed to put up a 20-MW solar-energy generation.
“Aside from it is only 20 MW, the feed-in tariff is also high at between P20 to P26 per kilowatt-hour,” he said. “If we get this power source and computing it with the other power sources that we have, we would expect an addition of P2.50 to the current P6.68 per kWh.”
The new electric rate would be near the rate of P8.20 per kWh collected in the Visayas franchise and Cagayan de Oro City. Luzon collects a higher rate of P11.40 per kwh.
“We have to get more sources of power so that the growth of Mindanao would not be stifled by the inability of the distribution companies to provide the power requirement,” he said. Davao City’s power requirement grows by an average of 6.1 percent yearly “and if not for the rotation brownouts last year, it could have been 8-percent growth.”
At peak demand of 297 MW, the Davao Light supply of 306 MW was only barely enough. “This is the peak power consumption under normal conditions, without the El Niño.”
Citing industry sources, he said that it would need 10 MW for every one-degree rise in temperature. During the El Niño weather phenomenon, temperature rose by five degrees.
“That would need at least 50 MW,” he said.
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