Philippines' Aboitiz Power to Add 1,400 Megawatts of New Generation Capacity

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Researched by Industrial Info Resources (Sugar Land, Texas)--The leading power generating company of the Philippines, Aboitiz Power Corporation (PSE:AP) (Cebu, Philippines), is proposing to augment its electricity generating capacity by 1,400 megawatts (MW). Erramon Aboitiz, the company's president and CEO, indicated that the expansion would be carried out by constructing new power plants and acquiring existing facilities.

Every power generating utility in the Philippines is allotted a capacity that is controlled by the government. On commissioning projects with a combined capacity of 1,400 MW, Aboitiz Power will have reached its generating limit. While a decision has not been taken on the nature of the power projects, media reports indicate that the company is proposing to build coal-fired power plants in Davao, Misamis Oriental and Subic. Aboitiz indicated that if the company decides to proceed with greenfield projects, it will spend $2.8 billion on the projects. The combined generation capacity of the three projects will be about 600 MW.

In Subic, the company will form a joint venture with Taiwan Cogen International Corporation (Taipei, Taiwan) to build a 300-MW clean-coal power project. The 150-MW Davao power project will supply electricity to the South Minadao region. The 150-MW Misamis Oriental plant will be constructed in the Phividec industrial estate as a joint venture with Steag State Power Incorporated (Makati, Philippines).

Presently, Aboitiz Power operates five hydropower plants, four oil-fired plants, one coal-powered plant, and one geothermal power generating facility. By the end of 2010, the company's power generating capacity is likely to increase 18% to 2,055 MW. Aboitiz has announced capital expenditure of about $397 million this fiscal year. The company is exploring the possibility of increasing investment in the hydropower sector. According to Chris Faelner, the senior vice president of Hedcor Incorporated (Cebu), in the next two years, the company will add 15 MW in hydropower capacity with an investment of $2.5 million per MW. Hedcor is the hydropower generating subsidiary of Aboitiz Power. To date, Aboitiz has spent $115 million on the 42.5-MW Sibulan hydropower project. The investment is considered to be one of the biggest in the country's hydropower sector. The power projects will be critical in meeting the growing power demand of the Philippines. The country's southern region, especially Mindanao, has suffered severe power outages. In February this year, the region generated only 842 MW, although peak power demand was about 1,200 MW.

The Philippines has a population of 92 million people and has the 12th-largest population in the world. The country relies heavily on oil for power generation. While oil accounts for 52.1% of the primary energy demand, renewable energy, coal, hydropower and gas contribute 6.4%, 24.7%, 8.7% and 12.8%, respectively, to the country's power generation.

According to the 'Philippines Q3 Power Report--2010' published by Business Monitor International (London, England), by 2014, the country's population is likely to increase to more than 100 million people. During this period, power consumption will increase from 53.2 billion kilowatt-hours (kWh) to 64.2 billion kWh. By 2019, electricity generation is expected to grow by almost 60% in comparison to capacity in 2009.

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