prospects for coal and clean coal technologies in the

Prospects for Coal and Clean

Coal Technologies in the

Philippines

John Kessels

IEA Clean Coal Centre

10 October

London, United Kingdom

Introduction

Series of studies of ASEAN countries

Philippines economic and constitutional

background

Philippines energy plan (PEP)

Coal, how much is there and where is it?

Primary energy

Imports versus exports

Current and future demand for coal

Clean coal technologies, why not

supercritical?

Conclusions

Series of ‘country studies’

• indigenous energy resources (coal, oil, gas,

nuclear, hydro, renewables) and the relative

importance of each in the national economy

• coal production (types produced, status of

national mining industry, and future prospects)

• coal imports and/or exports (coal types, scale,

sources and locations)

• scale of national coal consumption and future

prospects in all main market sectors

Series of ‘country studies’

• environmental issues associated with the use

of coal

• current deployment of clean coal technologies

and future prospects in relevant market

sectors; types of technologies being deployed

or planned

• measures being adopted to encourage

increased uptake of CCTs (funding

programmes, energy policy, etc)

The Philippines

Background to the Philippines

• Population 94 million estimated in 2010

growing annually at around 2.3%

• 7107 islands with a land area of 300,000 km²

stretching over an area of 800,000 km²

• Three main island groups, Luzon (northern)

with the capital Manila,Visyas (central and

Palawan), and Mindanao (southern)

Background to the Philippines

• Much of the country is mountainous and the

region is geologically active with 20 active

volcanoes.

• Democratic republic with a presidential

system

• In 2010 Benigno Aquino III was elected

President for a six year electoral term

• Average economic growth around 4%

• Average per capita earnings of US$2000

Country overview

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Philippines’ Energy Plan

• The Philippine Energy Plan (PEP) is the

Government blueprint for the energy sector for

the period 2009-2030.

• The three key policy elements are:

• Ensuring energy security

• Pursuing effective implementation of energy

sector reforms and,

• Implementing social mobilisation and cross-

sectoring monitoring mechanisms

• To achieve the above elements, measures are

being taken to encourage renewable energy,

energy efficiency and identify new fossil fuel

reserves

Major Coal Basins in the Philippines

2010 COAL RESERVES (in Million MT)

By Region in Million MT CAGAYAN VALLEY

Resource Potential - 336.00

In-situ Reserves - 82.57

MINDORO



SEMIRARA



NEGROS



BUKIDNON


ZAMBOANGA



MAGUINDANAO


SULTAN KUDARAT


SOUTH COTABATO



QUEZON



SAMAR



SURIGAO



DAVAO



SARANGANI


MASBATE



CEBU



BATAN-POLILLO-

CATANDUANES



Coal in the Philippines

• Total coal production (2010 estimate) 7.3 Mt

• Total coal demand (2010 estimate): 12.5 Mt

• Imports (2010 estimate): 11 Mt

• Proven reserves (2010 estimate) 316 Mt

• Potential coal resources range 19-270 Gt

COAL SUPPLY & DEMAND

• Coal Consumption (Run-of-Mine): 13Mt

• Power Generation : (72.44%)

• Cement : (23.42%)

• Other Industries : (4.14%)

• Coal Production (Run-of-Mine): 7.3 Mt

• 98.12% came from large-scale coal mine operators

• 96% came from the Semirara mine

• 1.88% came from small-scale mines

• Coal Importation (Run-of-Mine): 10.9 Mt

• Indonesia : 10,602,291.24 (96.68%)

• Vietnam : 277,516.68 (2.53%)

• Australia : 65,000.00 (0.59%)

• China : 18,018.00 (0.16%)

• US : 2,992.65 (0.03%)

2010 Coal Supply and Demand

Situation

Philippines Coal Supply 1980-2010

Coal Production 1980-2010

Outcome for coal

• Coal imports and coal demand will continue

to increase year on year

• Domestic production coal cannot currently

meet local demand

• Without confirmation of new coal reserves

the Philippines will become increasingly

dependent on importing coal

• Government is encouraging development of

new coal mines with incentives

• Diversification is needed in regard to coal

mines as Semirara currently supplies

around 96% of domestic coal

POWER SECTOR

Primary Energy Demand

POWER DEVELOPMENT

2010 and 2009 Comparative Generation, Philippines

Plant Type

2010 2009 Difference

GWh % Share GWh % Share GWh % Change

Coal 23,039 35.0 16,476 26.6 6,563.1 39.83

Oil-based 5,873 8.9 5,381 8.7 492.7 9.14

Natural Gas 19,226 29.2 19,887 32.1 (660.4) (3.32)

Geothermal 9,931 15.1 10,324 16.7 (393.0) (3.81)

Hydropower 7,652 11.6 9,788 15.8 (2,136.0) (21.82)

Other RE

(wind, solar,

biomass)

72 0.1 79 0.1 (7.0) (8.86)

TOTAL 65,795 100 61,934 100.00 3,860.8 6.23

Coal Demand Trend

Coal-fired Capacity build trend GWe

PAGBILAO 1 & 2

(2 x 364 MW)

TEAM Energy

CALACA 1 & 2

(2 x 300 MW)

Calaca Holdco Inc.

MASINLOC I & II

(2 x 300 MW)

AES Transpower Pte

Ltd.

QUEZON POWER

(1 x 511 MW)

Quezon Power Phils.

Toledo Power Plant

(88.8 MW)

Global Power

Mindanao Coal-fired

Power Plant

(1 x 232 MW)

STEAG

Cebu TPP 1 & 2

(52.50 & 56.8 MWs)

Salcon Phils.

SUAL I & II

(2 x 647 MW)

TEAM Energy COAL-FIRED

POWER

PLANTS

CEMENT & INDUSTRIAL COAL END-

USERS

Clean Coal Technologies

• Focus on CFBC technology

• All coal fired generation is subcritical

• The Philippines have no plans to build

large scale supercritical plants and is

unlikely to go down the same path as

India and Indonesia

Clean Coal Technologies

• The reasons why subcritical is the

technology of choice is supercritical is

perceived as technically more difficult

to apply and not cost effective for power

plants below 500 MWe

• A further area to improve with the

current coal fleet is to increase plant

utilisation from the current 50% to 75%

resulting in up to an additional 8.6 TWh

or equivalent to 14% of national

generation

NAGA, CEBU

(2 x 100 MW)

Legend:

COMMITTED

INDICATIVE

TOLEDO,

CEBU

(3 x 82 MW)

LA PAZ, ILOILO

(2 x 82 MW)

MARIVELES,

BATAAN

( 2 X 300 MW)

MAUBAN,

QUEZON

(1 x 500 MW)

MABALACAT,

PAMPANGA

(1 x 50 MW)

CAWAG,

SUBIC

(1 x 300 MW)

CALACA,

BATANGAS

(1 x 270 MW)

PAGBILAO,

QUEZON

(1 x400 MW)

PROPOSED

COAL-FIRED

POWER

PLANT

PROJECTS

SOUTHERN

MINDANAO

(2 x 100 MW)

CURRENT COAL EXPLORATION &

DEVELOPMENT ACTIVITIES

Underground Mining Methods

Longwall

PNOC-EC Coal

Mine

Shortwall

Room & Pillar

Almost all

Philippine

underground

coal mines

The 2009 PECR

awarded sixteen (16)

Coal Operating

Contracts

2009 Philippine

Energy Contracting

Round (PECR)

Coal Contract

Contract Term

Exploration : 2 years initial + 2 years extension

Development/Production to : 10-20 years + series of 3 years extension

not exceed 12 years

Signature Bonus : Negotiable

Cost Recovery : 90% of gross income

Depreciation : in 5-10 years for capital equipment

Taxes : exempted from national taxes except

income tax

Profit/Share : Government : 30% of net proceeds

Contractor : 70% of net proceeds

Tax Exemption : for imported equipment, materials, spare

parts and materials

Conclusions

• The goal of the PEP to achieve energy independence will

be difficult

• Current proven coal reserves of 316 Mt will run out in 20-

25 years

• Potentially 270 Gt of coal resources but unless new

reserves are confirmed with further surveys the

Philippines will become increasingly reliant on coal

imports

• To date, only one large gas field discovered and utilised

and although there are major potential gas reserves they

are located in the disputed Spratley Islands where

ownership is disputed with China, Malaysia, Viet Nam

and Taiwan

Conclusions

• CFBC is the technology of choice and several new power

stations are being built using mostly imported coals

• There are major renewable energy resources with hydro

geothermal and biomass the most likely to be further

developed

• Renewable energy is an area the Government wants to

increase by the current 4500MWe to 9000MWe within 20

years

• Obstacles to some renewable development is transport

and storage of biomass, high cost of electricity with

typhoons limiting wind farms

Conclusions

• The Philippines has privatised and deregulated the

power sector with the reforms yet to benefit consumers

• The country has one of the highest electricity prices per

kWh in Asia at around 18 US c/kWh

• One area that could increase power supply is to increase

the current low utilisation of 50% in the coal fleet to 75 %

this could result in an additional 8.6 TWh

Thank you for listening

[email protected]

www.iea-coal.org

mailto:[email protected]





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