Monday, 8 March 2010

SMEC to put up coal power plant in Mindanao

Paul Anthony A. Isla
Business Mirror

SAN Miguel Energy Corp. (SMEC), the power arm of food-and-beverage giant San Miguel Corp., is looking at building a coal-fired power plant in Mindanao.

“We are now in the process of filing and securing needed permits such as environmental compliance certificate with the Department of Environment and Natural Resources and other government agencies,” Ramon Ang, SMEC chairman and president, said in an interview.

He added that San Miguel is building the plant to take advantage of its coal mine in General Santos City, which has the capacity to generate electricity by as much as 2,000 megaWatts (mW).

Ang clarified that the plan is to build the power facility in several phases.

“Initially, we plan to put up a 150-mW to 300-mW mine-mouth coal power plant, which is projected to be relatively cheaper than other conventional coal-fired power plant. However, we plan to develop the project slowly, as well, as we also have to study the demand,” said Ang, adding that there is a need to build based on demand projection.

He said San Miguel can build 150 mW to 300 mW per stage.

The San Miguel executive said SMEC decided to put up the mine-mouth coal-fired power plant to make it more cost-effective for the company. “As a rule of thumb, it usually costs a little over a million dollars, but I think since what we plan to put up is a mine-mouth facility, then it should be cheaper,” he said.

A mine-mouth power plant refers to a power plant built near the source of coal to save on the cost of transporting the fuel to the facility.

Ang added that SMEC has already identified the ideal sites where it could build its green-field coal facility.

Ang declined, however, to reveal the plant’s possible locations. He said SMEC would be able to reveal details in the next two to three weeks.

The San Miguel executive added that SMEC is optimistic it would be able to start the construction phase within the year. “Within the year, we plan to start this project. And this green-field project could take 24 months to construct,” he said.

A coal-fired power plant is deemed critical for Mindanao, according to Ang, since the island-region already suffers from power shortfall due to its reliance on hydroelectric power plants.

“The coal-fired power plant would be a great help and alternative to hydroelectric power facilities in Mindanao,” he added.

“This is a way for us to help in alleviating the power supply problem of the country. Our company believes that we need this kind of project as part of our corporate social responsibility,” Ang said.

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