10-09-04

The Philippines, seeking to cut its reliance on imported oil and avert electricity shortages, will start work next year on its first sugar-fuelled power plant, one of the investors in the project said.

The 30-MW plant, which will use a sugar by-product from a mill in Talisay City on Negros island, will be built by a unit of Britain’s Bronzeoak and state-owned Philippine National Oil. Bagasse, the pulp left behind when sugar cane is crushed, is already used by the country’s 28 sugar mills to generate steam that powers turbines for electricity.

The proposed 3 bn peso ($ 53.6 mm) Bagasse-fired plant in Talisay is expected to be the first of many that will be set up alongside sugar mills, most of which are on Negros in the central Philippines.
"Bronzeoak Philippines is in various stages of talks with five other sugar mills throughout the country to develop and generate up to 170 MW of electricity," managing director Jose Maria Zabaleta said.

Including the Talisay plant, the six could generate a total of about 200 MW and bring investments of more than $ 250 mm to rural areas, he said. Zabaleta said the Talisay plant will take two years to build and is likely to sell electricity to the power distributor on Negros from 2007.

"The new plant will be built alongside the First Farmers sugar mill and refinery and will generate steam and electricity for both the factory and the local power grid," Zabaleta said. Negros produced about half the country’s estimated 2.34 mm tons of sugar in the 2003/04 crop year that ended in August.

The Philippines is promoting renewable energy from sugar, coconut oil, the sun, wind and water to reduce its dependence on oil as high global crude prices ramp up its import bill. It shipped in more than 91 mm barrels of crude oil and 37 mm barrels of oil products in 2003.

The country is also trying to lure investors to set up new plants to raise generating capacity and prevent power shortages that are forecast to hit as early as next year. Oil accounted for 39.2 % of the country’s energy mix as of the end of last year, followed by renewables at 31.3 %. Coal accounted for 10.94 %, natural gas for 6.65 %, geothermal for 6.55 % and hydro for 5.27 %.

In August, sugar millers and planters unveiled a plan to use a projected surplus of the sweetener to produce ethanol as an additive for gasoline.

The Philippines, which sold sugar in Asia this year for the first time in a decade, aims to divert 267,000 tons of its raw sugar output to produce ethanol by 2007.

Source: Business Day