MANILA -Tycoon Isidro Consunji’s Semirara Mining and Power Corp. is earmarking P1.5 billion in capital expenditures this year to boost its power output and avert power outages in the country, a top official said on Tuesday.
Semirara president and chief operating officer Maria Cristina Gotianun said the amount would be allocated mainly to improve the integrated energy company’s asset management program.
This commitment comes after two units in the power plants of its subsidiary, SEM-Calaca Power Corp. (SCPC), suffered outages that stretched up to 86 days last year.
Specifically, SCPC Unit 2 had a 42-day unplanned outage due to defective equipment from American firm GE, according to Gotianun.
“GE has so far been cooperating with us and Unit 2 is performing right now even at a de-rated capacity. The root cause analysis will come out [this month], and hopefully [GE] can continue to support us and even improve performance,” she said at the Semirara annual stockholders’ meeting.
The company last year saw a 146-percent growth in profit at P39.9 billion on the back of robust domestic coal shipments and higher spot electricity rates.
Record sales
Semirara chair and CEO Isidro Consunji noted that their “record-high” domestic coal sales—up by 33 percent to 7.7 million metric tons (MT)—translated to powering at least 4,000 megawatts (MW), or 20 percent of the country’s energy mix.
Coal production in 2022 was at 16 million MT, the maximum allowable capacity under Semirara’s environmental compliance certificate.
Last year, the company sold 50 percent of its coal output abroad. This year, Consunji said Semirara expected to reduce this to 30 percent and increase domestic coal sales to 70 percent of the total output.
As for other technologies, Consunji announced that Semirara was considering opening a liquefied natural gas (LNG) plant in Calaca, Batangas province.
“Calaca is ideal for LNG as well as coal. So the question is really just an issue of business liability. But physically and technically, there’s no reason why Semirara will not go to LNG,” he said.
‘Difficult to exit’
At present, Semirara remains the largest coal producer in the Philippines, and its power generation business has an installed capacity of 900 MW and around 600 MW in the pipeline.
While both the government and the private sector are ramping up efforts to increase the share of renewables, such as solar and wind power, in the country’s energy mix, Consunji said his company found it “difficult” to exit the coal business.
“However, our approach is a carbon mitigation plan, which is to offset the carbon emission of our coal and power plants with carbon credits and other mining activities or reforestation that will mitigate a lot of this carbon that is being emitted by our existing business,” he added.
Semirara’s Molave-Narra mine is expected to produce 16 million MT again this year, according to Gotianun.
While the company is open to buying other power plants, Consunji clarified that current market prices “makes it better for us to pursue developing new plants than purchase existing plants.”
Last year, Semirara said it intended to pursue construction of the 700-MW Calaca expansion project that is under its subsidiary, St. Raphael Power Generation Corp.
The project was delayed due to the termination of the joint venture agreement signed in 2016 by Semirara, Meralco Powergen Corp. and St. Raphael. INQ
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