SPI exec: Jakarta coal ban unlikely to affect Mindanao’s power needs

by Bong FabeJuly 4, 2016

from Business Mirror

CAGAYAN DE ORO CITY—The recent imposition of a ban on coal shipments to the Philippines by the Indonesian government will not adversely affect Mindanao’s daily power requirements, the spokesman of Mindanao’s first coal-fired power plant said.

Jerome Soldevilla, communications officer of the Steag State Power Inc. (SPI) said on Monday that the Mindanao Power Plant (MPP), which it operates, remains unaffected by the ban.

“As we understand it, the ban is imposed only on coal ships carrying the Indonesian flag. But since our coal imports are shipped on [board] non-Indonesian flag-carrying vessels, it will have no negative effect on us,” Soldevilla told this reporter.

He assured power consumers of a stable supply of electricity from SPI, which operates the first coal-fired power plant in Mindanao, the 210-megawatt (MW) MPP within the 55-hectare Phividec Industrial Estate in Villanueva, Misamis Oriental. The MPP supplies about a fifth of Mindanao’s power requirements.

The Indonesian government extended on June 24 the ban on coal shipments to the Philippines until Manila can guarantee security in its waters, especially in the Sulu Sea. The ban was imposed in April, following the spate of kidnappings by the Abu Sayyaf Group off the Sulu Sea.

The ban has left official of the Department of Energy (DOE) worried, saying that Indonesia supplies the bulk of the country’s total imported coal. Based on DOE’s data, Indonesia accounts for about 95 percent of the Philippines’s total coal imports for a total of 16.56 million metric tons in 2015. The bulk of this, or 79.77 percent, was used in power generation.

But Soldevilla said the ban will not negatively affect SPI’s operations, adding that SPI has from 20 to 30 days coal inventory as required by the DOE. “We also get a regular shipment of 50,000 metric tons of coal from Indonesia every month, which are shipped on non-Indonesian vessels,” he said.

The Therma South Inc. (TSI), wholly owned subsidiary of Aboitiz Power Corp., which operates the largest baseload coal-fed power plant in Mindanao, also assured power consumers of a stable supply.

An Aboitiz Power official, who requested not to be identified, said that TSI’s coal shipments do not pass by the Sulu Sea. TSI operates the 300-MW coal-fired power plant that straddles the contiguous area in Barangay Binugao, Davao City, and Barangay Inawayan in Santa Cruz, Davao del Sur.

However, Luis Miguel Aboitiz, Aboitiz Power chief operating officer, was earlier quoted as saying that Aboitiz Power can source its coal requirements from other sources, such as Australia or South Africa, but at a higher cost.

With enough inventory, coal-fired power plants in Mindanao is expected to continue its normal operations despite the ban and will not affect the island’s daily power needs.

The National Grid Corp. of the Philippines said that as of 6 a.m. on July 4, Mindanao’s power capacity was at 1,676 MW with a system peak at 1,432 MW or a reserve of 244 MW.