Aboitiz changing power generation mix

MANILA, Philippines - The Aboitiz group is changing their power generation mix by reducing the share of hydroelectric power plants in favor of clean coal facilities.

 Aboitiz Power Corp. president and CEO Erramon Aboitiz, told reporters over the weekend that the company sees the need to “diversify” in the light of the recent El Niño phenomenon that happened a few months back.

“We want to take advantage of hydro, no question about it but we also have to diversify our fuel sources. Like this year what happened with El Niño? They were totally dependent on hydro they had a water problem with no rain, all of a sudden we’re out of power. You really want to have some diversification,” he said.

He said as much as they want to engage in more renewable energy resources development, there are some factors that should be considered with regard to pursuing this type of power projects.

“Because right now we like renewable, but renewable is more , you have to go little by little, depending where the resource is, whereas coal, like for example, Mindanao needs 200,300MW, if you wanna solve the problem you got to basically build it and I think personally, especially for Mindanao,” he said.

Aboitiz said they will trim down the share of RE in the company’s generation mix. “Right now we’re probably about 42 percent RE so I think that’s going to shift, where RE will probably end with 30 percent,” he said.

 But Aboitiz was also quick to point out that they would not abandon their hydro projects.

“We’re also developing hydro so we’re not stopping with that, so we’re continuing to develop. We have about 250MW of small hydro identified but when we say identified, we still have to develop like studies, see if these are feasible. These are run of river (projects),” he said.

In line with this diversification tack, he said they would be putting up more than 300MW clean coal projects in Subic and Davao.

He said they are now pursuing their 300 (2 X 150 megawatt) (MW) Subic power plant which is expected to be completed by 2013.

According to Aboitiz, they are likely to borrow some funds to finance the Subic project which is estimated at $500 million.

He said they are now in discussion with Formosa Heavy Industries for the engineering, procurement and construction (EPC) contract for the Subic power plant. “Well, you remember our Subic plant, we said that we were going to slow down because we wanted to see how the economy was doing, the consumption is very strong, so we’re going to proceed with that. We’re actually finalizing our EPC contract with the contractor so hopefully by sometime next year, we will start construction, so the plant will be ready by the middle of 2013,” he said.

He said they are planning to source the coal from Indonesia and some from Semirara.

Aboitiz said they are also looking at the possibility of mixing biomass and clean coal technologies.

Talks with offtakers of the power from Subic, he said, would come after they have firmed up the construction schedule of the plant.

On top of the Subic coal-fired facility, Aboitiz said they are also eyeing another 150-MW coal plant in Davao.