Coal and Power Coal and Power in the Philippinesin the PhilippinesKalikasan PNE

National Consultation on CoalIloilo CityDecember 3, 2009

Global Coal SituationGlobal Coal Situation

Coal provides 26.5% of global primary energy needs and generates 41.5% of the world's electricity

Proven coal global reserves are estimated to last 122 years. In contrast, proven oil and gas reserves are equivalent to around 42 and 60 years at current production levels respectively

Top Producer

Top Exporter

Top Importer

China Australia Japan

USA Indonesia Korea

India Russia Taiwan

Australia Columbia India

Russia USA Germany

Indonesia South Africa

Chian

South Africa

China UK

Global Coal SituationGlobal Coal Situation

In the IEO2009 reference case, world coal consumption increases by 49 percent from 2006 to 2030, and coal’s share of world energy consumption increases from 27 percent in 2006 to 28 percent in 2030

COAL PRODUCTION, IMPORTATION AND COAL PRODUCTION, IMPORTATION AND CONSUMPTIONCONSUMPTION

Philippine COAL CONSUMPTIONPhilippine COAL CONSUMPTION

COAL CONSUMPTIONCOAL CONSUMPTION

Philippine POWER SOURCESPhilippine POWER SOURCES

POWER GENERATION MIXPOWER GENERATION MIX

PRIMARY ENERGY SUPPLY MIXPRIMARY ENERGY SUPPLY MIX

ENERGY FRAMEWORKENERGY FRAMEWORK

POWER GENERATION 2010-14POWER GENERATION 2010-14

SUPPLY AND DEMAND OUTLOOKSUPPLY AND DEMAND OUTLOOK

COAL RESOURCESCOAL RESOURCES AND PROPOSED PROJECTS AND PROPOSED PROJECTS

September 2008, 44 coal September 2008, 44 coal operating contracts (26 operating contracts (26 development/production development/production and 18 exploration)and 18 exploration)

September 2009, DOE September 2009, DOE awarded another 11 awarded another 11 coal-operating contracts coal-operating contracts to seven coal-mining to seven coal-mining companies which companies which expected to bring in expected to bring in investments amounting investments amounting to around $580 million in to around $580 million in the next 2 yearsthe next 2 years

November 2009, another November 2009, another 5 coal contracts worth 5 coal contracts worth Php235 million in the Php235 million in the next two yearsnext two years

Coal POWER PLANTSCoal POWER PLANTS

Calaca Power PlantCalaca Power Plant

Calaca-1Location: BatangasOperator: National Power CorpConfiguration: 1 X 300 MWOperation: 1984Fuel: coalBoiler supplier: FWT/G supplier: ToshibaQuick facts: Unit-1 was the first 300-MW class coal-fired plant in the country. A second unit was added in 1995.

Quezon Coal Power PlantQuezon Coal Power Plant

Location: Mauuban, QuezonOperator: Quezon Power LtdConfiguration: 1 X 490 MWOperation: 1999Boiler supplier: FWT/G supplier: GEEPC: Bechtel

Union Bank of Switzerland agreed to underwrite up to $600mn of bank financing for the $860mn project.

The project has a 25yr PPA with Meralco. In late 1997, lead developer InterGen sold a 26% stake in Mauban to Global Power Investments LP, formed in 1994 by GE Capital, Soros Fund Management, and International Finance Corp. InterGen retains a 46% stake, with Covanta having a 26% share and PMR holding 2%. The plant has a long-term coal supply contract with Indonesia’s PT Adaro and Kaltim Prima

Sual Coal Power PlantSual Coal Power Plant

Location: Bangayao Point on Lingayen Gulf, PangasinanOperator: TeaM Energy CorpConfiguration: 2 X 647 MWOperation: 1999Fuel: coalBoiler supplier: SteinT/G supplier: GEC_AlstomEPC: Alstom, Arup, Slipform

Development started when Consolidated Electric Power Asia Ltd (a subsidiary of Hopewell Holdings) bid and won a $900mn BOT tender for a 1,000-MW power station at Sual. Site prep started in 1995 and construction started in Feb 1996. 

Masinloc Power PlantMasinloc Power Plant

Location: ZambalesOperator: Masinloc Power Partners Co LtdConfiguration: 2 X 300 MWOperation: 1998-1999Boiler supplier: MHIT/G supplier: MHI, MelcoEPC: Stone & Webster, Commonwealth Engineers, MHI

In Dec 2004, PSALM awarded the Masinloc plant to a consortium of YNN Holdings Corp and Great Pacific Financial Group for $561.7mn. in Jul 2007 and eventually sold to a consortium led by AES Corp. Financing closed in mid-April 2008, with the participation of the ADB, IFC and a syndicate of commercial banks. A new 600-MW unit is in planning.

Mindanao Coal Power PlantMindanao Coal Power Plant

Location: Misamis OrientalOperator: STEAG State Power IncConfiguration: 2 X 116 MWOperation: 2006Fuel: bituminous coalBoiler supplier: KawasakiT/G supplier: ToshibaEPC: Kawasaki, Commonwealth Engineers Co

The lead financing was by Taiwan’s State Investment Trust which has an 11% stake in the project with STEAG  taking an 89% stake. The project dates to 1996 when a 25yr PPA was signed. This was formalized in Oct 2001 and in Apr 2002, Kawasaki was awarded the EPC contract for the plant, which burns Indonesian coal.

Construction started in Jan 2004 and the plant cost $305mn. Financial close was in Dec 2003 with a group of lenders including JBIC, Nippon Export and Insurance Corp,and Germanys KfW, Bayerische Hypo-und Vereinsbank, and Dresdner Bank.

Pagbilao Coal Power PlantPagbilao Coal Power Plant

Location: Quezon, Southwestern tip of Pagbilao Grande islandOperator: TeaM Energy CorpConfiguration: 2 X 367 MWOperation: 1996Fuel: coalBoiler supplier: MHIT/G supplier: MHI, MelcoEPC: B&V, Slipform

While about $45mn over the initial budget, and not inexpensive at $1,300/kW, Pagbilao was a model for fast-track IPP deployment in developing countries.

In Jun 2007, Mirant sold the Pagbilao and Sual coal-fired plant and a 20% stake in the Ilijan combined-cycle plant to TeaM Energy Corp for $3.424bn.

Marubeni CorporationMarubeni Corporation

In 2007, Marubeni was successful in acquiring the Philippine Assets of Atlanta based Mirant Corporation. Marubeni jointly owns with Tokyo Electric Power Corporation, the 1218MW Sual Coal Fired Power Plant and 735MW Pagbilao Coal Fired Power Plant

It also has a 20% stake in the 1251MW Natural Gas-Fired Ilijan Power Plant in Ilijan, Batangas City. The Joint Venture Company now owning and operating these power plant assets is Team Energy Corporation.

Marubeni is now the largest foreign IPP in the Philippines holding around 14% of the installed plant capacities in the country; more than 32% of the installed plant capacity in Luzon, and making Marubeni the largest foreign investor in the Philippines.

List of IPP Projects In Operation: Mindanao I Geothermal Plant, 48 MW Leyte Mahanagdong Geothermal Plant, 240 MW Mindanao II Geothermal Plant, 49 MW San Roque Multi-Purpose Hydro Plant, 345 MW Pagbilao Coal-Fired Plan, 735MW Sual Coal-Fired Plant, 1218MW Ilijan Natural Gas-Fired Plant, 1251MWRelated Power Projects• Batangas II Coal, 300 MW • Limay Combined Cycle A & B, 600 MW • Malaya Gas Turbines, 30 MW• Manila Oil Fired, 200 MW• Tiwi 5&6 Geothermal, 110 MW• Rehabilitation of the Tiwi 1&2,5&6   Geothermal • Malaya Oil Fired, 650 MW• Rehabilitation of the Malaya Oil Fired• Sucat Oil Fired, 850 MW• Rehabilitation of the Sucat Oil Fired • Leyte-Luzon HVDC, Interconnection Converter

Station • San Roque-San Manuel 230KV Transmission Line

Clean Technology FundClean Technology Fund

International Finance (IFC)Corporation

Asian Development Bank (ADB)

International Bank for Reconstruction and Development (IBRD)

$2.8 billion dollarsMedium Term

Development Plan“Renewable” energy“Efficient”

TechnologyEnergy and mining

ConclusionsConclusions

Increasing use of coal for power both at the national and global level

Big TNCs are the one who owns, control and profit from coal production and usage

Capitalist countries through their government and financial institutions support and promote the use of coal and related technologies

Philippine government under their globalization policies in energy and mining is pushing for the unbridled exploitation and plunder of our coal resources

We should brace and campaign against the influx of coal power plant and coal mining projects in the coming years