Cusi downplays Indonesia ban, says coal supply stable

MANILA, Philippines - There is no imminent threat to the country’s power supply amid ample coal supply to power up coal-fired power plants, more than a week after Indonesia banned its vessels from entering Philippine territory, energy industry officials said yesterday.

While the ban on Indonesian flag-bearing ships is a security concern, it would not negatively impact on the country’s coal power supply, newly-installed energy chief Alfonso Cusi said.

He said the ban only covers Indonesian-flagged vessels while the country’s coal supply is delivered by bigger ships bearing other foreign flags.

“Those serving the coal plants, they are being serviced by foreign flagged vessels other than Indonesia, which are not covered by the ban,” Cusi said.

Indonesia is the country’s main supplier of coal while the Philippines’ major source of electricity supply is from coal-fired power plants, which are among the reasons why there were speculations over the power supply situation.

DOE’s 2015 data showed Indonesia accounts for 95 percent of the country’s total coal imports. In terms of coal usage, 79.77 percent is used in power generation.

Currently, more than half of the country’s power supply comes from coal-fired and diesel-fired power plants, 30 percent from natural gas plants and 10 percent from renewables, which include geothermal, wind, hydropower and solar.

In separate text messages to The STAR, officials of key power players also echoed the Energy chief’s pronouncements.

Semirara Mining and Power Corp. chairman Isidro Consunji said the Indonesian ban does not affect most power plants because they are using large ships.

“Only tug [boats] and barges are affected. These are used mainly by cement plants [to ship coal],” he said.

Semirara is the country’s largest coal producer and also owns 2x300 megawatt (MW) coal-fired power plants in Calaca, Batangas, through its wholly-owned subsidiary Sem-Calaca Power Corp.

Alsons Power Group, meanwhile, has not experienced any interruption in coal supply after the ban, Alsons vice president for business development Joseph Nocos said.

“The Indonesian ban on coal shipments applies to vessels carrying the Indonesian flag. Our coal is delivered by vessels not flying the Indonesian flag and are thus not covered by the prohibition,” he said.

Alsons owns the 2x105 MW coal-fired power plant under Sarangani Energy Corp.

For Aboitiz Power Corp., its president and COO Antonio Moraza said there are also no issues in coal supply. “Coal is coming through normally at the moment,” he said.

AboitizPower owns the Therma Luzon Inc. power plant in Pagbilao, Quezon; the 300-MW Therma South Inc.plant in Davao and Davao del Sur; the STEAG State Power Inc. plant inMisamis Oriental, where it has a 34 percent interest; and the Cebu Energy Development Corp. plant in Toledo, Cebu, where it owns a 26.4 percent effective interest.

On the other hand, AC Energy Holdings Inc.’s “supply use vessels not covered by the ban, so we are ok,” company president and CEO John Eric Francia said. AC Energy’s coal-fired power facilities include the 2x135 MW South Luzon Thermal Corp. (SLTEC) plant, a joint venture with Trans-Asia Oil and Energy Development Corp., and the 600-MW GN Power Mariveles plant, where it owns a 17 percent stake.

A check with gencos also showed there is no disruption in coal supply as they have enough coal reserves, Cusi said.

“We have something like 30 days, which is the required amount. When I asked, [they said] we have more than that. We are okay as far as coal (supply) is concerned,” he said.

In the critical Mindanao grid, the SEC plant has more than enough coal inventory, Alson’s project implementation vice president and head of coal operations Nicandro Fucoy said in a phone interview.

“We have also sufficient inventory of around 50 days. It’s more than what is required. We just had a recent shipment. But our average (inventory) is 40 days,” he said.

In any case, some local coal producers have already expressed willingness to shoulder a portion of the local demand.

Last week, at the height of the issue, Consunji assured Semirara is ready to shift 700,000 tons of monthly coal exports to meet the local requirement.

In a text message yesterday, Consunji reiterated the company’s stance to meet local coal demand “anytime.”

Meanwhile, Coal Asia Holdings Inc. said it stands ready to partially meet the requirements of its clients in light of the ban through wholly-owned unit Titan Mining and Energy Corp.

“Due to Indonesia’s recently repeated ban of its flagged coal vessels to sail to the Philippines, Coal Asia and its subsidiary Titan Mining are prepared to assist their clients to cushion the impact of the shortfall in coal import by making available its equivalent local resources,” the firm said in a disclosure to the Philippine Stock Exchange yesterday.

In fact, it announced it just completed 1,000 metric tons coal shipment to the SEC plant, which Fucoy said is only a “minuscule volume.”

However, Nocos said the purchase of coal from Coal Asia is not related to the Indonesian ban.