Philippines: DOE reviews plan for more mine-mouth plants

Philippines: DOE reviews plan for more mine-mouth plants

Even amid the push for cleaner power sources, industry players are still
promoting the development of coal mine-mouth plants which they believe are
viable investments to lower electricity costs and ensure supply security by
stripping out importations and transportation of fuel to power plants.

The development of coal mine-mouth plants is being studied by the Department
of Energy (DOE) since it allows the country to develop indigenous fuel
sources and not rely on importation, Energy Secretary Alfonso Cusi said
during the Coal Business and Policy Forum yesterday.

"We have our own resources. So what I said is, let's use the natural
resources of the country," he said.

Cusi said the agency would undertake a study on the concept of putting up a
coal plant near the mine site.

Coal mine-mouth plants are built close to a coal mine and this translates to
lower electricity cost by removing the transport cost, Philippine Chamber of
Coal Mines Inc. (PhilCoal) executive director Arnulfo Robles said in the
same event.

"If the plant is separate from the mine site, there's handling that will
add up to the cost of coal [power]. So if you put up the plant near or
adjacent to the mine site, you remove that cost. and that basically reduces
the cost for coal, which is the fuel for the power plant," he said.

Based on a study co-authored by Robles, the cost of generating electricity
from mine-mouth plants is estimated between P2.61 per kilowatt-hour and
P4.45 per kwh.

The study showed there are 10 potential mine sites for mine-mouth plants
which are near the electricity grid and substations.

"The only way these mines can be viable is by putting up the power plant as
close as possible," PhilCoal chairman Rufino Bomasang said in the same
event.

"Otherwise, if you do not put up these mine-mouth power plants, these
available resources will never be developed," he said.

However, the development of mine-mouth plants face transmission issues,
since coal mines are usually located in remote areas, and public acceptance.

"Mines are site specific, normally they are in the remote areas where the
power need is not huge. So what you do is come up with a transmission
highway," Robles said. "The second is social acceptability. Those are the
things you have to consider as well other than the cost of producing
electricity."

Environment groups are urging the government not to allow the development of
coal plants which are seen as a major contributor to carbon emissions and
the degradation of the environment.

But Marcial Ocampo, a financial consultant for energy projects, said there
is potential to shift from coal to renewable energy by developing mine-mouth
plants.

He said mine-mouth power plants using circulating fluidized bed combustion
technology and low calorific value lignite - a type of coal mostly found in
the country - are convertible to biomass-fired power plants, which converts
waste materials to energy.

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Link to Original Article:
http://www.philstar.com/business/2016/11/19/1645081/doe-reviews-plan-more-mi
ne-mouth-plants

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com