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1 Jul 05 Singapore PowerSeraya Eyes Coal Conversion Plan Story by Edgar Ang SINGAPORE - PowerSeraya, Singapore's second-largest power generator, may convert idle, oil-fired electricity units to run on coal or other fuels in the face of high prices, the company head said on Thursday. The move is part of Singapore's broader effort to reduce its dependence on fuel oil, the country's primary source of electricity until the start of this decade. State-owned PowerSeraya is in the final stage of a study on switching 500 to 750 MW of generation -- half its oil-fired capacity -- to run on other fuels. It would then be able to switch between the two fuel sources at will. "We are not just looking at the switch to coal. It is just one of the alternative fuel options we are looking at," managing director Neil McGregor told Reuters. The company would take another six to 12 months to secure approval for a change from the Ministry of Environment, which manages emission standards. McGregor said the project would cost about S$450 million to S$600 million ($270 million to $360 million), the same as a new 750 MW dual-fuel combined-cycle generator. An industry source said PowerSeraya aimed to commission a coal-powered generator in 2007-2008 if the board approved the project but the exact date would depend on approval from the Ministry of Environment. PowerSeraya, owned by state investment agency Temsasek Holdings [TEM.UL], and other power generators want to lower costs in a competitive and oversupplied market. The oil-fired generation capacity, used only for back-up, is idle because it is more expensive than combined-cycle units. About 50 percent of Singapore's capacity is built to run on fuel oil, diesel and orimulsion, but 80 percent of daily demand is met from gas-fired combined-cycle units, industry sources say. Singapore's total generating capacity is 10,106 megawatts, while peak demand is around 5,100 MW, government figures show. PowerSeraya, which has 27 percent of the country's capacity, has 750 MW of combined-cycle generation, 750 MW of new orimulsion-fired capacity -- commissioned this week -- and 1,600 MW of oil-fired steam generation. Oil prices have doubled in the past two years, raising costs dramatically for oil-fired power producers, but coal costs have also risen as China's rapidly rising electricity demand draws in more of the black fuel. "The (coal) commodity's price has been on the high side this year, and we will continue to monitor the situation," McGregor said, adding that PowerSeraya would seek coal from an unnamed nearby supplier. Indonesia, Australia, China and South Africa are major coal exporters to Asia. A switch will not mean a direct reduction in the company's fuel oil inventories, since it could still hold oil reserves as back up for gas or coal generation, industry sources say. Power companies in Singapore are required to stock 45 days of fuel stocks and ensure suppliers hold another 45 days. An industry source estimated the company's fuel oil stockpiles for 45 days would be around 260,000-270,000 tonnes, based on its average operating rate. McGregor declined to give an estimate of the company's current fuel oil stocks. This year, Taiwan halted fuel oil imports as Taiwan Power, the country's main producer, switched to cheaper fuels such as liquified natural gas (LNG) and coal. links Related articles on Singapore: green energy renewable energy, energy saving: issues, efforts, discussions |
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