“Mindanao will be facing a continuing and debilitating power crisis unless new power plants are built to cover the shortfall!” That’s the doomsday scenario painted by Erramon Aboitiz, president and chief executive officer of Aboitiz Power.
To support his contention, Aboitiz said the shortfall between Mindanao’s power supply and demand is projected to reach 484 megawatts from 2010 to 2014. The shortfall will deprive five major cities in Mindanao of power, namely, Davao, General Santos, Cagayan de Oro, Zamboanga and Butuan.
If the consequences of such a prediction have not dawned on their inhabitants yet, then they better be prepared to suffer up to six hours of rotating brownouts during the dry season.
Aboitiz Power’s announcement of further doom in Mindanao’s power situation is not, however, new to Dabawenyos. The company also said the same thing to make people understand the need for putting up the recently-completed hydropower plant in Sibulan, Davao del Sur which can provide up to 42.5 MW and was the object of President Benigno S. Aquino III’s praise when he inaugurated the plant during his visit here last month.
While the putting up of the plant in Sibulan encountered problems, mainly due to conflict with the Davao City Water District over the issue of who has the prior right to use the city’s water resources, the fact that it is a renewable and sustainable source of energy after all is not lost to all concerned.
The problem with hydroplants, Aboitiz admitted, is that “it is highly vulnerable to weather conditions. In times of drought or dry spell, a hydropower plant becomes unreliable. Take the case of the Angus and Pulangui hydropower plants which failed to provide power to Mindanao when the water dried up due to the recent El Nino phenomenon.
Mindanao power crisis
The solution, according to Aboitiz, is the construction of a “circulating fluidized-bed coal plant within Davao City which will significantly reduce our dependence on hydropower.”
“Coal costs substantially lower than fuel oil, so a coal-powered plant will have a significant and favorable impact on electricity rates,” he said.
While the company is prepared to build the plant even without bilateral contracts with wholesale buyers of electricity due to the urgency of the need, Aboitiz said they have not yet identified any area for the plant.
The coal-powered plant is envisioned to cost up to $400 million or roughly P15 billion, provide employment to at least 200 people, and produce up to 200 MW for the city.
“This could be the largest investment in the city,” he said.
The company executives headed by Aboitiz have met with Vice Mayor Rodrigo Duterte and members of the city council even before they announced their plans to the media.
The vice mayor said he would always welcome initiatives that will help improve the power supply in Mindanao, since a more stable power supply will make the city more attractive to investors.
However, Mayor Sara Duterte-Carpio was not impressed by the Aboitiz-proposed coal-powered plant. The mayor, who earlier declared that she will always prioritize the protection of the environment when confronted with the Hedcor-DCWD issue, advised the company to present their proposal to the council and to the people.
Earlier, Duterte-Carpio said such a project, like mining, will only “bring more problems than benefits and solutions since it will have a long term effect on the environment.” The mayor instead urged the company executives to look for alternative sources of power (like a wind farm) or an alternative location for the coal-powered plant.
Aboitiz said it is but logical to locate the coal-powered plant in the city since Davao is the biggest user of power in Mindanao –hence, it is best that the power plants be built here to ensure the sustainability of power supply.”
He said the project can be ready by middle of 2014 if they start construction soon. The project is expected to take up to 40 months, including the 6-month period for finding a location and procuring the necessary permits, plus 36 months for construction.
Coal plants
Coal-powered plants exist in other countries, including the United States which started using coal back in 1880 as a reliable source of generating power. Such plants make use of coal chunks which are crushed into powder form and made to undergo the combustion process. The burned coal produces heat that generates steam which is then used to activate power-generating turbines. Coal accounted for 55 percent of the generated electricity in the US in 1995.
The technology is not new in the Philippines where there are at least nine listed coal-powered plants, six in Luzon, two in the Visayas and one in Mindanao.
The $305 million-Mindanao Coal Plant operated by STEAG in Misamis Oriental commenced in 2006 (constructed in three years time) after the Department of Energy projected an 850MW shortfall in Mindanao’s power between 2006 and 2014. The plant produces 232 MW.
The STEAG website claims that the Mindanao Coal Plant, which was constructed under a build-operate-transfer (BOT) scheme, provides 20 percent of the total power supply in Mindanao. It is saddled by a 25-year contract which requires the company to deliver the power it generates to the National Power Corporation.
In 2007, Aboitiz Power bought 34 percent share of the Evonik Industries AG, which is in turn the majority shareholder of STEAG State Power, Inc. with a 55-percent share. German-based Evonik operates in 100 countries, is an expert in power generation and is known as the fifth largest power producer in Germany,
A 200-MW coal-powered plant worth $450 million is also being built in Maasim, Sarangani by Conal Holdings. The Kamanga Power Plant, which is a joint venture between the Alcantara Group and Thailand power firm Electricity Generating Plc EGCO.BK, is expected to become operational by 2011.
Environmental implications
Despite the large amount of electricity generated by most coal-powered plants at a generally lower cost, scientists are still wary about such projects because of their possible negative effects on the environment. A group of scientists stationed in Cambridge, Massachusetts emphasized the effects of coal-powered plants in terms of air pollution, waste generation, fuel supply and water use.
The burning of coal is expected to result to the emission of acid rain and smog which can further add to global warming and climate change problems. Scientists claim that in one year, a typical coal-powered plant will generate 2.3 million tons of carbon dioxide, 10,000 tons of sulfur dioxide which results to acid rain, 500 tons of airborne particles that can aggravate asthma and can cause chronic bronchitis, 170 pounds of mercury and 225 pounds of arsenic that can possibly cause cancer.
A coal-powered plant can also yield 10,200 tons of nitrogen oxide which would be tantamount to the NO2 emission of about half a million old cars. Coal-powered plants will also generate sludge, ash and toxic chemicals. But more than that, the plants will need billions of gallons of water, the scientists said.
They added that at least 2.2 billion gallons of water is needed by a 500-MW coal-power plant every year to create steam for its turbines. The same amount of water can already support the requirements of 250,000 people.
Coal-powered plants are expected to leave lots of carbon footprints since the coal will be mined, transported and stored. In the case of Davao, Aboitiz suggested Kalimantan in Indonesia as a possible and proximate source of coal for the plant.
Aboitiz assured Dabawenyos that “coal fuel generation has now become greener because of new technologies that are cleaner and more efficient.” He said the old image of coal as a high polluting power source is based on old technology.
“Aboitiz Power guarantees that the operations of this coal plant will meet stringent international and the Philippines’ environmental, safety and health standards,” he said.
Mindanao needs new power sources because of its growing requirement for power. Coal plants have proven to be reliable power sources for years unlike hydropower plants which are reliant on weather conditions. And with the company’s promise of more stable and cheaper electricity, a coal-powered plant might be the answer to Mindanao’s power problems. But then again, considering the environmental degradation that is part and parcel of developments like this, building a coal-powered plant might not be as simple as it looks at all.
