Frequently Asked Questions (FAQs)

210 MW (net) Coal-Fired Power Plant

EMPOWERING MINDANAO. EMPOWERING YOU. VISION We are a world-class energy provider, a trustworthy partner to the nation’s quest for progress. MISSION We are committed to: Help provide solutions to the expanding energy demands of the country; Conduct our business with honor, integrity and professionalism in the best interest of all our stakeholders; Ensure optimum efficiency, reliability and safety in our operations through state-of-the- art technology and innovative processes in a culture of continuous improvement; Meet the growth needs and aspirations of our people in a productive and collaborative team-environment; Preserve mother-earth and help build self-reliant communities to uplift the quality of life of the people.

2 | Frequently Asked Questions Frequently Asked Questions | 3 Mindanao’s First What is coal? SPI owns and operates Mindanao’s first coal-fired power plant located at the PHIVIDEC Industrial Estate in Villanueva, . Coal is a combustible, sedimentary, organic rock formed from It pioneered the use of world-class and proven technologies that vegetation, which has been consolidated between other rock strata to enabled the company to sustain a highly efficient, reliable and responsible form coal seams, and altered by the combined effects of microbial action, electric power generation process. pressure and heat over a considerable time period. The power plant was established through a BOT (Build-Operate- Transfer) partnership with the state-owned National Power Corporation (NPC) over a period of 25 years. Since start of operations in November 2006, the power plant has supplied the additional baseload capacity and has thus far helped stabilize electric supply needed to sustain the island’s growth and progress.

Our core competence is power generation and our strengths are efficiency, reliability and responsibility

SPI is a world-class energy company and a leader in advanced coal- power generation technology. Its strengths are efficiency, reliability and responsibility. It was established as a special purpose company to own, finance, build, operate and maintain Mindanao’s first coal-fired power plant. SPI’s parent company Steag GmbH is one of the largest power producers in Germany. Established in 1937, the company has evolved to become one of the leading power companies engaged in the planning, construction and operation of highly-efficient power plants using fossil fuels and renewable energy sources such as biomass, mine gas, geothermal and wind. Steag GmbH Philippine partners are Aboitiz Power Corporation and La Filipina UyGongco Corporation. With solid technical know-how and expertise plus a workforce complement of about 200 highly competent and dedicated personnel, SPI fulfils its mandate of helping provide solutions to the growing energy needs of the country and lives up to its vision of being a reliable partner to the nation’s quest for progress.

4 | Frequently Asked Questions Frequently Asked Questions | 5 Where does the Power Water used in the power plant is drawn from Plant draw the nearby Tagoloan River in Misamis Oriental water for its and pumped via an underground pipeline to the operations? water treatment facility inside the power plant.

Where does the power plant draw water for its Why use coal for electricity generation? Is the water There is no effect on the seasonal river water operations?level of the level because the volume of water extracted Coal is one of the most abundant and affordable natural fossil Tagoloan is relatively low and represents only a fraction fuels. It plays a major part in supplying the world’s power demand, thus, RiverWater affected used in the power plantof the is volume drawn flfrom ow rate the ofnearby the river. Tagoloan Water underscoring global economic and social development. It underpins riverby in theMisamis water Oriental and pumpedconsumption via an isunderground regulated by the pipeline National to Water the nearly all key industrial economies including the United States, Australia, waterconsumption treatment facility inside theResources power plant. Board (NWRB). Japan and Germany. of the power plant? River Discharge Flow vs. Plant Requirement Lowest River Flow Rate 22.5 m3/sec (81,000 m3/hr) Is the water level of the Tagoloan riverAllowable Extractionaffected Flow Rate 0.225by m3/sec the water consumption of the power plant? (810 m3/sec) Plant Requirement Flow Rate 0.043 m3/sec (155 m3/hr) There is no effect on the seasonal river water level because the volume of water extracted is relatively low and represents only a fraction of the volume flow rate of the river. Water consumption is regulated by the National Water Resources Board (NWRB).

How is a. Fuel Delivery power generated Coal is landed by handy-sized vessels via a special from purpose jetty and stockpiled in a specially prepared coal coal? storage area at the plant. Coal is pulverized to fi nes and blown together with a pre-heated combustion air to the boiler furnace where it is combusted under controlled conditions to minimize emissions in the fl ue-gas. Where does the power plant get its coal?

SPI uses coal that is mined in Indonesia and transported to Mindanao by self unloading handymax-size vessel. The coal is of high quality and fully meets the efficiency and environmental requirements as designed for the power plant.

6 | Frequently Asked Questions Frequently Asked Questions | 7 c. Electric Power Generation The high-pressure steam releases its energy through expansion across the blades of the turbine causing these to rotate a turbine rotor. The rotor is directly coupled to the generator which through revolution generates electricity.

d. Electricity Distribution Generated electricity from the unit transformers is conveyed through a special purpose inter-connector to the Mindanao grid substation in Tagoloan, Misamis Oriental. From there, the electricity is distributed through a 138kV high voltage grid to the electric power cooperatives and franchise distributors and finally to the power consumers.

How is power generated from coal?

a. Fuel Delivery Coal is unloaded via a special purpose jetty and stockpiled in a specially prepared coal storage area at the plant. Coal is pulverized to fines and blown together with a pre-heated combustion air to the boiler furnace where it is combusted under controlled conditions to minimize emissions in the flue-gas.

b. Water for Steam Generation At the water treatment plant, the water is filtered and stored in a water storage tank. The water is further treated such that minerals are removed. The de-mineralized water is then fed as boiler feed water. The heat generated through combustion is transferred via the boiler heating surfaces to the feed water for conversion to steam. With continuous heating at high temperature, the steam is pressurized. The live steam is directed by high pressure piping to the steam turbine.

8 | Frequently Asked Questions Frequently Asked Questions | 9 10 | Frequently Asked Questions Frequently Asked Questions | 11 What environmental challenges are there that affect How are emissions controlled during the power the use of coal in electricity generation? generation process?

Most human activities and all forms of energy, including renewable Emissions are controlled in the flue gas by air cleaning devices energy, have environmental consequences and raise their own such as flue-gas desulfurization (to neutralize sulphur) nitrogen dioxide environmental issues. Coal is not exempt from having issues and how reduction (by using low-NOX burner) and fly-ash removal (using bag these may affect the environment. The Mindanao Power Plant, however, filters). uses suitable and well-proven technologies that can mitigate coal Solid by-products such as bottom ash and fly ash/gypsum, once combustion’s impact to the environment. collected, are stored in a specially prepared and water-tight ash disposal area located within the power plant site. What measures has SPI taken to address the concerns regarding pollution? What are the measures taken to prevent dust in the air? The power plant is equipped with modern technology designed to minimize, emissions in the process of power generation. To ensure the Coal dust suppression from stockpiles is maintained by regular water integrity of the ecological systems within its sphere of operations, SPI spraying. Moreover, the active coal stockpiles are covered and all conveyor has initiated a sound environmental conservation program that is geared lines enclosed to prevent coal dust dispersal. The receiving hoppers at the towards improving the general welfare of its host communities and jetty are also equipped with water sprays for dust suppression. fulfilling its obligations to the environment.

12 | Frequently Asked Questions Frequently Asked Questions | 13 How can water The coal hoppers at the jetty are equipped with water contamination be sprays which provide a water fi lm during release of prevented when coal from enclosed grabs into the hoppers. Coal unloadingHow cancoal waterfrom dusts contamination are caught by the be fi lm prevented and washed to when the the vessels? hoppers. The hoppers are equipped with guide unloading coal fromvanes the to collect vessels? any coal falling from the grabs.

The coal hoppers at the jetty are equipped with water sprays which provide a water film during release of coal from enclosed grabs into the hoppers. Coal dusts are caught by the film and washed to the hoppers. The hoppers are equipped with guide vanes to collect any coal falling from the grabs.

What are the effects of the Power Plant’s discharges on Macajalar Bay and its marine resources?

There is no discernible long-term effect on the marine life of Whatthe Macajalarare the Bay. SPIThere conducts is no discernible regular marinelong-term gene effect surveyson the marine and is life of Macajalar Bay. SPI conducts regular marine effectsestablishing of the trends and statistics. The off-shore structures that were gene surveys and is establishing trends and statistics. Powerestablished Plant’s in fact serves as marine habitats, thus creating new marine discharges on It is anticipated that off-shore structures will in fact act Macajalarenvironments. Bay as new marine habitats, thus creating new marine and its marine environments. resources? Does run-off water from the plant affect the groundwater or deepwells? Does run-off There is no run-off to the ground water. The ash water fromThere isthe no run-offdisposal to the areaground is lined water. with The impermeable ash disposal layers area which is lined plantwith affectimpermeable the layersdirect which rainwater direct to rainwater drainage channelsto drainage for fichannels ltering and for groundwaterfiltering and treatment. or treatment. deepwells?

14 | Frequently Asked Questions Frequently Asked Questions | 15 b. Urban Forestry Program In its host communities in Tagoloan and Villanueva, about 1,000-hectare urban forestry project is also being implemented. A plant nursery has been established to produce the seedlings required to reforest the area within the 25-year plant operation period.

c. Coastal Marine Resource Development Program A comprehensive program to develop and protect the marine resources in Macajalar Bay is underway. Program component includes mangrove development and rehabilitation coastal resource protection advocacies and ecological solid wastes management.

What other actions has SPI implemented to protect the environment?

SPI has taken steps in developing and implementing a comprehensive environmental conservation program within its 25-year plant operation period. a. Forest Development Program SPI, together with E. Pelaez Ranch, Inc.(EPRI) and the Department of Environment and Natural Resources (DENR), is undertaking a 1,200-hectare Mapawa Reforestation Project in Cugman, City. The goal is to establish a 500-hectare plantation forest, maintain and protect another 500-hectare tree plantation, and conduct Timber Stand Improvement (TSI) on an existing 200-hectare natural forest. The project is considered as one of the pioneering private-led carbon sink initiatives in Mindanao.

16 | Frequently Asked Questions Frequently Asked Questions | 17 d. Multi-Partite Monitoring Team (MMT) e. Environmental Transparency A Multi-Partite Monitoring Team (MMT) was organized to oversee The power plant is equipped with a Continuous Emission Monitoring project compliance with the Environmental Compliance Certificate System or CEMS that is hooked directly online with the Environmental (ECC), the Environmental Management Plan (EMP) and all applicable Management Bureau (EMB). The CEMS provides computer-generated environmental rules and regulations. data indicating the power plant’s conformity with local and international The MMT is composed of representatives from SPI, the air quality standards. Environmental Management Bureau (EMB) of DENR, representatives Furthermore, ambient monitoring on the quality of air, noise levels, from the concerned provincial, municipal and barangay governments, groundwater and seawater within the vicinity of the power plant is accredited Non-Government organizations (NGOs), Peoples Organizations periodically conducted. (POs), the National Power Corporation (NPC) and the PHIVIDEC Industrial Authority.

18 | Frequently Asked Questions Frequently Asked Questions | 19 f. Information and Education Program What are the benefits that the power plant provides? SPI is implementing a comprehensive Information, Education and Communication (IEC) Program to inform communities about the power plant, its safety features and environmental protection and community SPI goes far beyond providing efficient and reliable electric power to development programs. The IEC program aims to develop a sense of community stakeholdership and to ensure wider community participation Mindanao. in efforts geared towards the attainment of sustainable development. Apart from sustaining responsible business operations and adhering to the ethical standards of safety, environment, transparency and accountability, SPI is actively engaged in numerous social development programs aimed at helping address a wide array of community concerns.

For a decade now, SPI invested material time, resources and expertise in helping secure a much brighter and prosperous communities where it is part of.

On an ongoing basis, SPI is collaborating with many different stakeholders that allow a multi-stakeholder approach on poverty alleviation and environmental conservation.

SPI’s commitment to help bring about development in its host communities is manifested through its various Corporate Social Responsibility (CSR) programs.

20 | Frequently Asked Questions Frequently Asked Questions | 21 CSR Flagship Programs SPI’s Corporate Social Responsibility (CSR) programs focus on the following areas : Improving Health through the Water, Sanitation and Health (WaSH) Program Improving Education through the Social Empowerment through Education (SEED) Program

Improving Governance through the Enhancing Governance in Improving Income through the Livelihood and Economic Local Development (EGoLD) Program Enterprise Development (LEED) Program

22 | Frequently Asked Questions Frequently Asked Questions | 23 Improving Quality of the Environment through the Improving Access to Electricity through the Fostering Rural Environmental Conservation (ECo) Program Electrification and Energization (FREE) Program

Inspiring people to excel through a continuing Information, Education and Communications (IEC) Program

ER 1-94 Program Pursuant to ER 1-94 of the Department of Energy (DOE), SPI sets aside one-centavo per kilowatt hour of electricity sales to fund programs and projects along the areas of rural electrification, livelihood development, reforestation, watershed management, environment enhancement and health improvement. Proceeds of the one-centavo share are allocated to the host region, host province, host municipalities, host barangays and the relocation site. Program or projects are administered and implemented by the concerned local government entities and/or agencies of the national government.

24 | Frequently Asked Questions Frequently Asked Questions | 25 FAST FACTS

Power Plant Type : Coal-Fired Fuel : Sub-bituminous Coal Operation Mode : Baseload Plant Installed Capacity : 232 MW Plant Location : PHIVIDEC Industrial Estate Villanueva, Misamis Oriental (55.42 hectares) BOT Cooperation Period : 15 November 2006 - 12 November 2031

26 | Frequently Asked Questions Frequently Asked Questions | 27 HEAD OFFICE POWER PLANT 20th Floor Yuchengco Tower PHIVIDEC Industrial Estate RCBC Plaza, 6819 Ayala Avenue Villanueva, Misamis Oriental Makati City 1200, 9002 Philippines Tel : +63 2 8451437 Tel : +63 32 2308200 Fax : +63 2 8453396 Fax : +63 32 2308283 Email : [email protected] Website : www.steagstatepower.com