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Mining & Resources

Meeting the rising energy demand in South East Asia

25 Jun 2014, by Informa Insights

Dr Bodo Goerlich, President & Chief Executive Officer, STEAG State Power Inc.
Dr Bodo Goerlich, President & Chief Executive Officer, STEAG State Power Inc.

As the lone provider of power using sub-bituminous low sulfur coal for Mindanao, STEAG State Power Inc.’s (SPI) power plant accounts for about 18% of the island’s electricity demand.  As energy demand in South East Asia is expected to increase by as much as 80% in the future, the Mindanao electricity mix will see the rise of coal-power in the next five years.

Dr Bodo Goerlich, President & Chief Executive Officer from STEAG State Power Inc. joined us recently for a Q&A. He will be a panellist on the “Coal Procurement Roundtable” at the upcoming Kalimantan Coal Conference, taking place on the 2nd and 3rd September in Balikpapan, Indonesia. Here he shares with us some insight into SPI’s energy generating technologies and how SPI balances economic goals and social responsibilities.

SPI plays a major role in meeting the energy requirements needed to sustain the island’s economic growth and development – what is the scale of this role, and is there a strong market outside the Philippines as well?

Bodo: SPI’s power plant in Mindanao accounts for about 18% of the island’s electricity demand. Since start of our commercial operations in November of 2006, we have delivered more than 10.4billion kWh of electric power to the Mindanao grid.

Energy demand especially in the South East Asian region is expected to increase by as much as 80% from the current state. I believe that coal will continue to emerge as the fuel of choice citing coal’s relative abundance and affordability. It is projected that coal-power generation in South East Asia will increase from the current 1/3 today to almost ½ in the next 20 years. Coal will be used mainly for base load.

What is the composition of the Mindanao electricity generation mix, particularly coal? How much of this is purchased from Kalimantan and what are the future projections? 

Bodo: At the moment, Mindanao has SPI as the lone provider of power using sub-bituminous low sulfur coal in a volume of approximately 900,000 MT per annum, all coming from Kalimantan.

The prospect of coal in Mindanao is quite promising. The island posted the highest economic growth rate of 8.2% in 2012 (outpacing the national growth of 6.8%) amidst the crippling power shortages in the island in the past few years. Between 2015 – 2018, about 905MW of new coal-fired power plant capacities (Sarangani Energy – 200MW; Aboitiz Power – 300MW; FDC – 405MW)  will come on-line. This is on top of the more than 2,200MW indicative additional capacities projected to come in Mindanao until 2020, as follows:

  • 1,200 MW San Miguel Corporation
  • 405 MW GN Power
  • 100MW San Ramon Power
  • 300MW Aboitiz Power
  • 200MW Minergy

From the current 18% market share, coal-power will dominate the Mindanao electricity mix beginning 2019 at around 56%.

SPI’s power plant is considered as Mindanao’s most modern – what are some of the technologies implemented and what is the impact on SPI’s operations?

Bodo: SPI’s power plant is designed at an efficiency of 36%, compared to the South East Asian average of 34% and the world’ average of about 30%. It is equipped with low NOx burner that optimizes combustion and substantially reduces nitrogen oxides. It utilizes modern SOx control system using Flu Gas Desulphurization (FGD) – Novel Integrated Desulphurization or NID system).

SPI has pioneered in the Philippines an on-line Continuous Emission Monitoring System (CEMS) that has elevated environmental transparency into a much higher level. It also operates fully automated and state of the art of control systems:

  • Distributed Control System
  • Programmable Logic Controller
  • Burner Management System
  • Turbine Control System
  • Vibration Monitoring System

These modern and state of the art facilities enabled us to:

  1. Achieve and sustain 100% compliance to local and international environmental standard (by keeping emissions and effluents way below the regulatory limits);
  2. Achieve and sustain above-industry standard reliability rate of more than 92% for the period 2006-2013; [automated process has reduced risk of human error]
  3. Achieve fuel economy (through higher efficiency)
  4. Cut back CO2 emission by as much as 2 million MT (thereby addressing the concerns of global warming).

How does SPI balance economic goals along with their social and environmental responsibilities?

Bodo: SPI believes in the principles of sustainable development. Beyond providing efficient and reliable source of power to Mindanao, we are engaged in a strong partnership with our host communities in making positive and long-lasting impact through the various social responsibility programs and projects. These include a 2,200 hectare Forest Development and Urban Forestry Projects (one of the biggest private-sector led initiatives in the Philippines), a 16 hectare mangrove rehabilitation project, a comprehensive community development program that provide for quality education to local children, improving potable water supply and sanitation, promoting livelihood enterprises for women, and an electrification program benefitting hundreds of communities in hinterland villages of Mindanao.

Join Dr Bodo Goerlich and 120+ industry professionals at the highly anticipated Kalimantan Coal Conference this September, for insightful discussions on Kalimantan coal market dynamics – Maximising the operational and commercial opportunities. For detailed conference program and to register, please visit the Kalimantan Coal Conference website.


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