Ronnie Lim, Business Times 27 Mar 08;
(SINGAPORE) Tuas Power is looking at building a $2 billion coal-fired plant - the first here - its president and CEO Lim Kong Puay told The Business Times. For this, it will tap on new owner China Huaneng Group's experience with the fuel.
As part of a plan to re-power its current steam plants, Tuas Power is also studying another option, which is to convert them to natural gas-fired plants.
Separately, the power generating company, or genco, plans to invest in a cogeneration plant on Jurong Island, which will supply steam and cooling water to petrochemical plants there, as well as produce electricity.
Speaking to BT after Huaneng completed its $4.2 billion purchase of Tuas Power earlier this week, Mr Lim said: 'It's business as usual.' The genco's name remains unchanged and the current Singapore management has been asked to continue running the company. But Huaneng officials will sit on Tuas Power's board, which meets next month for the first time since the purchase.
But what is clearly different is the company's plan to consider coal-firing. Singapore gencos looked at the option several years ago, but it has not resurfaced until now.
Still, the move is not surprising as Tuas Power, which produces about 26 per cent of Singapore's electricity, has to brace itself for keener competition from bigger rivals Senoko Power and PowerSeraya, especially once they are also sold to new owners with deep pockets, not unlike Huaneng.
Besides, Huaneng, China's largest coal-fuelled power producer, has expertise in techniques to reduce emissions, such as using enclosed storage to minimise pollution. It also recently joined an international coalition of power utility and coal companies which plans to design and build the world's first zero-emission, coal-fuelled power plant.
With a total licensed capacity of 2,670 megawatts (MW), Tuas Power now operates 1,460 MW of combined cycle gas turbines (CCGT) which use natural gas to produce electricity more efficiently and economically than conventional steam plants.
As standby capacity, Tuas Power also has 1,200 MW available from two 600 MW steam plants - and it is these which it is now looking to convert to either two CCGT units with a total capacity of 800 MW, or two 500 MW coal-firing units giving a total capacity of 1,000 MW.
'The coal-firing option would probably cost around $2 billion. By comparison, going the CCGT route would involve about $700-800 million of capital investment,' Mr Lim said. 'But coal-firing overall is cheaper than gas. While it involves higher capital costs, it will result in lower operating costs.'
Huaneng, which has installed generating capacity of more than 71,000 MW in China - eight times the combined 9,070 MW of the three biggest generators here - has considerable experience and expertise in coal-firing.
But ahead of the plan to re-power its steam plants, Tuas Power intends to proceed with a cogeneration (cogen) plant on Jurong Island first, although Mr Lim declined to go into details.
He disclosed the cogen plan to BT last September, after news of rival PowerSeraya's plan to go big on cogen by building some 1,550 MW of new cogen capacity by 2010.
Industry sources say that, typically, cogen plants should comprise at least 200 MW of electricity generating capacity and another 200 MW of steam capacity, and can cost as least $400 million to build.
'It's still early days though. We expect to decide on the plant investment some time this year,' Mr Lim said.
Separately, TPGS Green Energy - a 75-25 joint venture between Tuas Power and gas importer Gas Supply Pte Ltd - said on Tuesday that it had signed up titanium dioxide producer Ishihara Sangyo Kaisha (ISK) to use its small cogen plants.
The $20 million combined heat and power project, involving two 5 MW cogen plants at ISK's Tuas plant, is TPGS's third, after it installed cogen plants at Tuas pharmaceutical giants Schering-Plough and Pfizer.
