Thursday, July 26, 2012

Aboitiz Eyes Further Visayas Expansion

MANILA, Philippines - The Aboitiz Power group is targeting to expand further its electricity generation portfolio with a greenfield 200-megawatt power facility in the Visayas. In an exclusive interview, AP president and chief executive officer Erramon I. Aboitiz disclosed that ''in the Visayas, we're looking at greenfield developments there also... probably around 200 megawatts.'' He indicated that technology deployment for the planned Visayas facility may still be coal as this is intended to beef up baseload capacity needs of the region beyond 2015 when demand is expected to outstrip supply once again. ''We're looking at other technologies, but to be honest at this point in time, coal is the cheapest,'' he stressed, qualifying further that the country's baseload supply problems must be addressed first before diversifying into other sources, such as renewables or liquefied natural gas (LNG). The planned Visayas power project will be an addition to the growing investments of the Aboitiz group in Luzon and Mindanao grids. The conglomerate previously lined up multi-year capital expenditures of P170 billion to bring all of its power projects to completion. The commercial operation date, the design as well as the siting of the proposed Visayas facility are among the items being firmed up yet by the Aboitiz firm. As coal is manifestly the preferred technology in a number of their projects for lack of current options, Aboitiz has indicated that diversification is very much in their plan for the future. It must be noted that aside from its coal fleets, the Aboitiz group already has a highly-diversified generation capacity that similarly covers hydro, geothermal and oil-fired facilities. ''No question about it, we really need to diversify. But from a national policy and energy security standpoint, it's important to look at the price and it is also important to look at the resource when it comes to sustainability,'' he stressed. The AP chief executive has emphasized that one technology option they are seriously looking at is LNG, albeit he asserted that the main concern they're trying to unravel is how to possibly bring down the cost for this market similar to what has been happening in the United States and Canada. ''We are looking at it, and we're trying to understand it because we think that LNG is the fuel of the future. And we think that prices can become cheaper, and that is being made possible now with the shale gas in the US, Canada and other parts of the world,'' he stressed. Aboitiz opined that the country needs to balance its energy mix, noting that fossil fuel-fired facilities as well as renewables would be the sector's inescapable future. ''I would be concerned if we are totally reliant on coal, for example, in the future. We should have a balance of coal, LNG, geothermal as well as other renewables,'' he said. ''You have to bring in big baseload capacity and diversify the energy sources. It's not choosing coal or renewable, it's doing both together. But it's about doing the renewables that make financial sense, those that are feasible and will not require huge subsidies,'' he concluded.