THE Philippine National Oil Company-Exploration Corp. (PNOC) is scouting for a suitable location for the Department of Energy’s (DOE) planned coal-blending facility-a first in the country aimed at maximizing the utilization of local coal to feed the power-hungry nation.
‘We are also pursuing a coal terminal in the Philippines. We lack a blending facility here, meaning we can only use one type of coal: Indonesian coal. In fact, we import 95 percent of our coal from Indonesia,’ said Energy Secretary Sharon Garin during the 15th Energy Smart Forum organized by the European Chamber of Commerce of the Philippines (ECCP) held in Makati City.
The importation of Indonesian coal is mostly influenced by the quality of the coal, citing how this perfectly fits the turbines of coal power producers. Garin said if the Philippines puts up a coal blending facility then it will no longer be restricted to Indonesian coal. ‘For example, we get from local and it’s not good enough then we can mix it with something else.
There are some who get it from Australia. Before, we used to get from Russia also. Other than that, there are not many providers, so our options are limited.
We don’t have energy security as far as coal is concerned. Because 95 percent of our coal is imported from Indonesia. Anything can happen, so what we need is to have a diversification of our risk. We need to source it from different countries, if there’s an option, or the best option is to source it in-country. Most of our coal, they say, is not good enough for our coal power plants, but there is a way to fix that. We can mix our coal with something that can make it useful for our coal power plants,’ said Garin.
She plans to pitch the proposed terminal to power industry stakeholders since this will be a private-sector led investment in which government will only have a minimal stake.
‘I hope to sell the idea to our stakeholders. I hope that our gencos [generation companies], or even our coal mining firms or traders, will start thinking about it and maybe they can form an organization that could embark on that.
It’s not a complicated project, it just requires a terminal, along with the necessary machines and equipment to do that, but it might take time. There is one location we are looking at in Mindanao, and because we don’t know yet if it’s feasible, so we’re conducting a feasibility study,’ Garin said.
The PNOC will take the lead, and it has started studying, scoping areas in Mindanao and the rest of the country. Garin said the government might participate through a minimum shareholding just maintain an overview or supervision. ‘Other than that, I would not put government as an operator,’ she added.
She noted that electricity prices are likely not be affected by the capital intensive project that will be financed by the private sector. ‘That’s part of our feasibility study-ensuring its commercially viable and won’t increase the price of power.
‘Offhand, I don’t think it will, because we’ll use local materials and probably mix them with some imports. I think local coal should be cheaper.’
Garin, as Energy secretary, acts as the ex-officio chairperson of the PNOC-EC.