Victorias City, Negros Occidental: The country’s biggest sugar producer Victorias Milling Co. Inc. (VMC) said on Tuesday it expects to complete the construction of its P2-billion cogeneration biomass power plant by September this year.
The 40-megawatt (MW) facility, located in its compound in Victorias City, is part of the listed sugar firm’s venture into power generation and will run mainly on bagasse, a byproduct of sugarcane.
Eduardo Concepcion, VMC president and chief executive officer, said that once complete, the company will be able to export to the grid about 25 MW and the remaining 15 MW will be used for the operation of its own sugar mills.
“We are also applying this under FIT (feed-in-tariff),” Concepcion said, “If the project becomes qualified under FIT, the power plant will get priority dispatch in the spot market with a fixed price of power at P6.63 per kilowatt hour for at least 20 years.”
If successful, the executive said that they will proceed with the second phase of the biomass plant, which could generate the same amount of electricity.
The biomass power plant will have a 40MW capacity which will be used to power turbines at the mills.
“But we will just export 20 MW of power to the grid from Phase 2, which will electrify the turbines to convert them to use electric power so that steam from the sugar mill will be concentrated on the power plant to maximize the power generation we will use to run the mill,” he said.
Meanwhile, Concepcion said that they are now discussing bagasse supply agreement with other companies – including the Zabaleta group – that are planning to put up their own biomass power plants on the island.
But the discussions are still in the early stage as the current setup makes it difficult to acquire feedstock, he said.
Last year, Zabaleta-led Bronzeoak Philippines Inc. said that the International Finance Corp. (IFC) has already approved funding for three biomass plants.
“Those are three plants, San Carlos, South Negros and North Negros. The IFC already approved funding of up to $161 million, which covers the three biomass plants,” Bronzeoak director Don Mario Dia recently said.
Aside from biomass power projects, VMC is also upgrading its distillery to be able to produce bioethanol aside from potable alcohol.
“Under the law, bioethanol needs to be sourced from local produce so the demand and the price is high compared to potable alcohol that could be imported,” VMC chief manufacturing officer Linley Retirado said during the same event.
He said the upgrade will likely cost P50-P80 million and upgrade the distillery’s current capacity of 30,000 liters to 50,000 liters per day with a projected annual production that can reach up to 8.3 million liters.
The amount to be invested in the distillery upgrade will mostly be spent on the installation of a dehydrator to enable the conversion of potable alcohol to bioethanol.
Molasses, also a byproduct of sugar cane milling, is a raw material for bioethanol and feedstock for alcohol production.
The Biofuels Act of 2006 mandated a 10 percent bioethanol blend in gasoline but at present, the country still enforces 2 percent blend due to supply issues.