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Environmental Assessment Report

Summary Environmental Impact Assessment Project Number: 43906 March 2009

Philippines: Visayas Base Load Power Project

The summary environmental impact assessment is a document of the Borrower. The views expressed herein do not necessarily represent those of ADB’s Board of Directors, Management, or staff, and may be preliminary in nature.

Prepared by Korea Electric Power Corporation (KEPCO)–SPC Power Corporation (KSPC) for the Asian Development Bank (ADB).

CURRENCY EQUIVALENTS (as of 9 March 2009)

Currency Unit – peso/s (P)

P1.00 = $.020585 $1.00 = P48.58

ABBREVIATIONS

AAQMS – Ambient Air Quality Management System ADB – Asian Development Bank BOD – biochemical oxygen demand CEMS _ Continuous Emission Monitoring System CFBC – circulating fluidized bed combustion CO – carbon monoxide CO2 – carbon dioxide COD – chemical oxygen demand DENR – Department of Environment and Natural Resources DOE - Department of Energy EIA – environmental impact assessment EIS – environmental impact statement EMP – environmental management plan EPC – engineering, procurement, and construction EP – electrostatic precipitator HDPE _ High density polyethylene KEPCO – Korea Electric Power Corporation KSPC – KEPCO–SPC Power Corporation LMP - League of Municipalities in the Philippines LGC - Local Government Code MMT - Multipartite Monitoring Team NO2 – nitrogen dioxide NOx – nitrogen oxide NPC – National Power Corporation NPCC _ National Pollution Control Commission PAGASA – Philippine Atmospheric, Geophysical and

Astronomical Services Administration PSALM - Power Sector Assets and Liabilities Management

Corporation SO2 – sulfur dioxide SOx – sulfur oxide SPM – suspended particulate matter TransCo – National Transmission Corporation TSP – total suspended particulates TSS – total suspended solids

WEIGHTS AND MEASURES

oC – degrees Celsius dB – decibel g/Nm3 – gram per normal cubic meter GWh – gigawatt-hour kg/cm2 – Kilogram per centimeter square

kV – Kilovolt m3/hr – cubic meters per hour m/s – meter per second m3/s – cubic meters per second mg/l – milligrams per liter ml – Milliliter mm – millimeter MW – megawatt PCU – Platinum cobalt unit ppm – part per million tpd – ton per day µg/m3 – microgram per cubic meter µg/Ncm – microgram per normal cubic meter

GLOSSARY

barangay – the smallest administration division in the

Philippines and is native term for village, or district.

poblacion – the central barangay of a municipality sitio – is a territorial enclave inside a barangay

especially in rural areas.

In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

CONTENTS

Page MAPS

I. INTRODUCTION 1 II. DESCRIPTION OF THE PROJECT 1

A. Project Facilities 1 B. Associated Facilities 5

III. Design and Construction 5 A. Design 5 B. Power Plant Operations 6 C. Land and Right-of-Way Acquisition 7 D. Project Schedule and Contracts 7 E. Project Management and Operations 7

IV. DESCRIPTION OF THE ENVIRONMENT 8 A. Physical Environment 8 B. Biological Environment 15 C. Sociocultural Environment 16

V. ALTERNATIVES 17 A. With- and Without-Project Alternatives 17 B. Alternative Project Locations 18 C. Alternative Fuels 19 D. Alternative Boiler Technologies 19 E. Alternative Cooling Systems 20 F. Design Alternatives for the Intake and Discharge Canal Systems 20 G. Alternative Water Resources 21

VI. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES 21 A. Physical Environment 21 B. Biological Environment 26 C. Sociocultural Environment 26 D. Induced Development 27 E. Cumulative Impact 27 F. Impacts of Associated Facilities 28

VII. ECONOMIC ASSESSMENT 29 A. Project Costs 29 B. Project Socioeconomic Benefits 29

VIII. ENVIRONMENTAL MANAGEMENT PLAN 30 A. Objectives and Scope of Environmental Management 30 B. Organization for Project Environmental Management 30 C. Mitigation Measures 30 D. Monitoring and Evaluation Program 31 E. Social Development Plan 32 F. Emergency Response Plan and Disaster Preparedness Program 33 G. Ash Utilization Plan 33

IX. PUBLIC CONSULTATION AND DISCLOSURE 34 X. CONCLUSIONS 34

APPENDIXES

1. Summary of the Main Design and Operational Data of the Project 36 2. Location Map of Ambient Air Quality Sampling Stations 37 3. Environmental Management Plan 38

Naga City

Construction Area

National Capital

City/Town

National Highway

Boundaries are not necessarily authoritative.

PHILIPPINESVISAYAS BASE LOAD POWER PROJECT

PROJECT SITE LOCATION MAP

N

Manila

LUZON

VISAYAS

MINDANAO

126 00'Eo118 00'Eo

118 00'Eo126 00'Eo

Naga City,Cebu Island

Project Location

8 00'No

16 00'No

8 00'No

16 00'No

09-0793c EG

Map 1

Existing Naga Power PlantProposed KPSCPower Plant Site

Water Intake Channel Existing Pier

Proposed Pier

Proposed Water Discharge Channel

C E B U I S L A N D

Natio

nal H

ighw

ay

Existing WaterDischarge ChannelTo

Cebu C

ity

GT

GT

DD

D

C

C

Pulang Lupa

San Jose

Roxas

Bansud

San Agustin

Boracay

Caticlan

Kalibo

Sara

Victorias

Bacolod

Panilan

Cadiz

San Carlos

Sta. BarbaraSan Jose

Culasi

Dumarug

Alcoy

Danao

Toledo

Borbon

Tagbilaran

Quiat

Trinidad

Alicia

G. Hernandez

Baybay

Abuyog

St. Bernard

Tacloban

BiliranBorongan

Oras

CatubigCatarman

San Enrique

Maasin

Nabas

Sibonga

Caibayog

Bulan

Gubat

Quinapundan

Telesa

Limasawa

Dumaguete

Binalbagan

Cauayan

Sipalay

Bindoy

Sagay

Bayawan

Carmen

Balingoan

Gingoog

Santiago

Surigao

Butuan

Agusan

OroquietaDapitan

Siom

Bantayan

CEBU

NEGROSORIENTAL

NEGROSOCCIDENTAL

AKLAN

MASBATE

LEYTE

SAMAR

BOHOL

ZAMBOANGADEL NORTE

MISAMISOCCIDENTAL

MISAMISORIENTAL

AGUSANDEL NORTE

AGUSANDEL SUR

OCCIDENTALMINDORO

SURIGAODEL NORTE

CAPIZ

ILOILOANTIQUE

NORTHERNSAMAR

EASTERNSAMAR

SOUTHERNLEYTE

ORIENTALMINDORO

SORSOGON

GUIMARAS

RomblonIsland

SiquijorIsland

TicaoIsland

CamoteIsland

CamiguinIsland

PanaonIsland

09

-07

93

b E

G

Ma

p 2

Project Area

National Capital

City/Town

Cable Terminal Station (existing)

230kV Substation (existing)


115kV Substation (ongoing)


Coal-Fired Generating Plant (existing)

Gas Turbine

Diesel Generating Plant (existing)

230kV Transmission Line (existing)


115kV Transmission Line (ongoing)


Provincial Boundary

Boundaries are not necessarily authoritative.

PHILIPPINESVISAYAS BASE LOAD POWER PROJECT

TRANSMISSION LINE – CEBU GRID MAP

Kilometers

0 25 50 100

N

Manila

LUZON

VISAYAS

MINDANAO

Cebu

Project Location

126 00'Eo118 00'Eo

118 00'Eo126 00'Eo

16 00'No16 00'No

8 00'No8 00'No

10 00'No

123 00’Eo

123 00’Eo

10 00'No

121 20’Eo

121 20’Eo

12 00'No12 00'No

Visayan Sea

S ibuyan Sea

Ley te Gu l f

Boho l Sea

Panay Gul f

I. INTRODUCTION

1. KEPCO–SPC Power Corporation (KSPC), a joint venture between KEPCO Philippines Holdings (a wholly-owned subsidiary of Korea Electric Power Corporation or KEPCO) and SPC Power Corporation, is developing the Visayas Base Load Power Project. The Project is located in Colon barangay (district) of Naga, in the province of Cebu (Map 1). It was conceptualized under a new scheme of a merchant power plant, on a build–own–operate basis, characterized by the execution of power sales contracts with distribution utilities and electric cooperatives, instead of purchase power agreements with the Government of the Philippines. Under this concept, the generating company is responsible for the whole construction, operation, and maintenance of the plant, including fuel supply—without any Philippine government guarantees. 2. The project area covers 8.4 hectares (ha) that were previously utilized as an ash pond of the existing Naga power plant complex, operated by SPC Power Corporation. The Project will construct a coal-fired power plant utilizing circulating fluidized bed combustion (CFBC) 1 technology—a clean coal technology with more 1,300 units operating worldwide. The plant will consist of two 100 megawatt (MW) units, which will utilize coals from PT Kasih Industri and PT Surya Sakti Darma Kencana (both in Indonesia) and qualified local suppliers. 3. Completed project milestones include the signing of the engineering, procurement, and construction (EPC) contract with Doosan Heavy Industries & Construction on 10 December 2007, excavation on 14 February 2008, and boiler steel structure erection on 10 December 2008. The overall construction accomplishment status for EPC as of 31 December 2008 had reached 31.5%. The target for commercial operation is February 2011 for the first 100 MW and in May 2011 for the second 100 MW. 4. This summary environmental impact assessment was prepared by KSPC for use by the Asian Development Bank (ADB) in accordance with ADB’s environmental and social safeguard policies and information disclosure requirements for environmental category A projects. It summarizes and consolidates the major findings and recommendations presented in the environmental impact statement (EIS).2 The environmental compliance certificate for the Project was issued on 5 December 2005 by the secretary of the Department of Environment and Natural Resources (DENR). As part of the EIS, a public hearing was held on 6 August 2005 and further consultations were conducted with local people.

II. DESCRIPTION OF THE PROJECT

A. Project Facilities 5. The project facilities to be constructed by KSPC include the power plant and support facilities. The main project facilities will include two 100 MW CFBC units, main transformer, switchyard, control system, coal handling system (unloading and stockpiling), ash handling system, electrostatic precipitator, feed water system, condensate system, circulating water system, and closed cooling water system. However, the 1 kilometer (km) transmission line to

1 The power plant will use the CFBC process, one of the better technologies in the type of power plant using coal as

fuel. CFBC technology has better efficiency in the regulation of gas emissions—an inherent weakness of coal-fired power plants—making it more environment-friendly and a better alternative to conventional pulverized coal boilers such as the existing power plant in the area.

2 SPC Power Corporation. 2005. Environmental Impact Assessment for the Proposed 2 x 100 MW Coal-Fired Thermal Power Plant Project. Naga, Cebu (October).

2

convey electricity to the new Naga substation will be engineered, owned, and operated by National Transmission Corporation (TransCo). These facilities are described below.

1. Facilities to be Constructed by KEPCO–SPC Power Corporation 6. Power Plant. The power plant will consist of two 100 MW CFBC boiler units, steam turbines, and generators. Each boiler will have a boiler proper, a draft system (including primary air fan), a secondary air fan, an air preheater, an induced draft fan, fluidizing air blowers and air and flue gas ducts. The operating steam conditions for the boiler will be 128 kilograms per square centimeter (kg/cm2) absolute main steam pressure, and 538 degrees Celsius (oC) main steam and reheat steam temperature at the inlet to the turbine. Sub-bituminous coal will be the main fuel, and light oil will be used for start-up. The main plant will consist of three interconnected structures: (i) boiler building, (ii) turbine and generator building, and (iii) control building. It will be erected on an abandoned ash pond fronting the existing power plant operated by SPC Power Corporation. Figure 1 shows the process flow of power generation. 7. Electrostatic Precipitators. Each steam generating unit will be provided with an electrostatic precipitator (EP) with parallel gas paths. Each gas path will consist of five electrostatic fields for the collection of fly ash. The EP will have a dust collection efficiency of 99.68% with inlet gas concentration of 12.32 g/Nm3 (for design coal) and 99.82% with inlet gas concentration of 21.72 g/Nm3 (for range coal). 8. Coal Handling and Processing System. The Project will install new facilities only for the coal handling system. Coal will be brought via coal barge from coal suppliers and will be docked in the barge docking facility with a dead weight of 8,000 tons. The coal from the barge will then be unloaded by a screw-type system to the conveyor and finally to the coal stacking area. The coal will be crushed to the specified size in accordance with recommendations from the boiler manufacturer. The coal handling system covers continuous service 24 hours a day. The coal consumption rate of the Cebu coal-fired power plant is about 52.7 tons per hour (hr) per unit at the boiler maximum continuous rating condition. 9. Cooling Water System. The circulating water system will be a once-through seawater cooling system. It will draw seawater from the existing intake canal for Naga power plant, with appropriate modifications. Installation of screen will be introduced at its intake to control trash and debris, and chlorination will be established to manage organic growth. The Project’s total seawater requirement will be about 45,000 cubic meters per hour (m3/hr), including 128 m3/hr processed through a desalination plant for plant service and potable water and demineralized water for the boilers. 10. Water Supply System. Seawater will be the source of all water requirements of Visayas Base Load power plant project. The circulating water system will be a once-through cooling system, drawing water from the existing Naga power plant seawater intake channel. Modification by adding a new intake canal for this proposed power plant will be provided. Hypochlorination3 at the intake will be done by an on-site hypochlorite generator. From the intake facility, seawater pumps will supply the water treatment plant—producing water for the plant process, boiler water, plant service, and domestic requirements.

3 A system composed of a chemical feeder, a liquid chlorine solution (e.g. blender or sodium hypochlorite) and a

drinking water supply.

3

11. Water Treatment System. Seawater will undergo ultrafiltration and first stage desalination for domestic and service water requirements. The balance will be further processed at the second stage desalination and electrodeionization4 to produce demineralized water for the boiler’s steam cycle make-up, auxiliary cooling systems, and the chemical laboratory. The Project will require about 528 m3/day of demineralized water, 349 m3/day of service water make-up to the reuse water storage tank, and 35 m3/day of domestic water requirements. 12. Wastewater Treatment System. Most of the wastewater produced will be in the form of boiler blowdown5 is collected at the normal wastewater pond. Oily wastewater from the fuel storage, transformer areas, and turbine area is collected, oil skimmed, and separated. The three streams will accumulate at the normal wastewater pond for homogenization. Thereafter, pH adjustment, coagulation, flocculation, clarification, and filtration by pressure sand filter and activated carbon filter will take place; and the filtered water will be sent to the reuse water storage tank. This reuse water will supply the plant systems service water, including the coal handling and storage, ash handling system, and firefighting system. The wastewater treatment plant is designed to handle and recycle 1,080 m3/day. Sludge from the clarifier and thickener will be further dehydrated and the cake sludge disposed of properly as landfill or fertilizer. 13. Ash Disposal System. The ash generated from the system will be from the furnace bottom (bed ash), air preheater hopper, and electrostatic precipitator (EP) hoppers (fly ash). The collected ash will be transported by pneumatic conveying system to the bed and fly ash silos. A portion of the bed ash will be reinjected to the furnace through the bed media regeneration system. During abnormal operations, the bed ash silo will be unloaded to the truck by a wet unloader and transported to the ash disposal area. The bed and ash silos each have a 48-hour storage capacity.

4 A water treatment process that removes ionizable species from liquids using electrically active media and an

electrical potential to affect ion transport. This is commonly used as a polishing process to further deionize Reverse Osmosis (RO) permeates to multi-megohm-cm quality of water.

5 The boiler blowdown is water containing accumulated dissolved solids and/or sludge left at the bottom of the boiler.

4 Figure 1: Process of Power Generation

Source: SPC Power Corporation. 2005. Environmental Impact Assessment for the Proposed 2 x 100 MW Coal-Fired Thermal Power Project. Naga, Cebu (October).

5

14. Site Drainage. Storm water will be collected from roads, hand standings, and impervious areas not contaminated by ash or wastewater. It will be directly discharged to the discharge structure within the site or the sea. 15. Pier Expansion. The existing 160 meter (m) pier being used by Naga power plant will be extended to 220 m to unload coal from barges to be used by the new KSPC power plant. B. Associated Facilities

1. Transmission Lines and New Naga Substation

16. A transmission line will be engineered by TransCo to transport the generated electricity from the plant to the grid. The transmission line is about 1 km away from the proposed power plant and is near the existing 138 kilovolt (kV) substation. Out of the proposed 16 steel towers to be erected by TransCo, the new KSPC power plant will only require 4 towers and a 260 m transmission line up to the new Naga substation.

III. DESIGN AND CONSTRUCTION

A. Design

17. The Project is being designed in accordance with international standards for subcritical steam power plants using a CFBC boiler. The design of support facilities and associated works is in accordance with national and international standards. The plant design will cope with local seismic conditions.6 18. The plant site is in the coastal city of Naga, province of Cebu, about 22 km south-southwest of Cebu City, the premier urban center of the southern Philippines. The main project area is about 8.4 ha. The proposed site, which was previously utilized as an ash pond of the existing Naga thermal power plants, had been reclaimed with cutting soil during the construction of the existing power plant. The elevation of the ash pond was about +8.0 m based on the mean low low water, and was finally graded to +4.5 m based on the following considerations: site preparation works, approach road, underground utilities connected with existing facilities, and site drainage. 19. The design life of the equipment will be 30 years. All equipment and materials will be brand new, in accordance with specifications, and proven in service in similar applications and conditions. The buildings, structures, and auxiliary works will be designed in accordance with the best engineering practice—complying with all applicable Philippine standards and aesthetically designed to be in harmony with the surroundings. The station layout and the operability of equipment will require a station operation and maintenance staff team of about 180 persons. 20. The general arrangement and layout of the plant is being designed to ensure safe and convenient access to the equipment for operation and maintenance. It conforms to National Fire Protection Agency and Philippine regulations concerning classification of hazardous areas. The 6 The Project is located in seismic zone 4, in accordance with section 208 in volume 1 of the National Structural Code

of the Philippines 2001.

6

plant is designed to operate satisfactorily under any normal usage operating conditions, without undue vibration and emitting the least possible noise. Equipment will be interchangeable; of the same type and manufacturer; proven against dust, humidity, and tropical environment; and designed to prevent ingress of vermin, insects, or animals that could cause short circuits or mechanical damage. A complete system of interlocks and safety devices will be provided, ensuring personnel and equipment safety during operation and maintenance under normal and emergency conditions. The main plant will include the turbine house, boiler house, EP and stack, coal yard, water and wastewater, and the seawater intake system. Appendix 1 summarizes the Project’s main design and operational data.

1. Construction

21. The site required minimal earthworks, considering that it had been reclaimed when it was utilized as an ash pond. Excavation of unsuitable ash, filling with satisfactory soil materials, and final grading were carried out to finalize the landform. 22. Civil works will involve construction of the main power plant, auxiliary facilities, and buildings. Mechanical and electrical works will include both on-site and off-site fabrication, assembly, installation, and erection of power plant equipment, pollution control and monitoring equipment, stack structure, seawater intake, desalination and demineralization plant, wastewater treatment plant, control system, power system, and various utility systems. 23. Construction will require 500–1,000 skilled and unskilled workers. Construction workers will be engaged by contractors responsible for different construction packages. The power supply for construction will be provided by a single circuit 23 kV distribution line of about 2.5 MVA rating from a local distribution company. Construction water will be sourced through a local water distributor and from groundwater sources prior to the operation of the plant water supply pipeline.

B. Power Plant Operations

1. Coal Supply and Transport

24. Coal will be supplied by PT Kasih Industri and PT Surya Sakti Darma Kencana (Indonesian companies), and some qualified local suppliers. It will be transported by coal barge from the coal suppliers. A coal handling system will be designed and constructed for the use of the Project. In accordance with the EPC contract, the maximum ash content will be 12% for range coal and 8% for design coal. Daily consumption, based on the boiler maximum continuous rating, is typically 2,530 tons.

2. Fuel Oil Transport and Storage

25. The light diesel fuel oil will be used for boiler start-up, flame stabilization, and low load operation. It will be transported to the site by road tankers from nearby oil depots. A storage tank with a capacity of 600 m3 will be provided for the oil. Two light oil service pumps are connected to the firing systems of the two steam generating units.

3. Ash Transport and Storage

26. The ash handling system will be designed for a coal consumption of 54.25 tons/hr. This amount of coal will produce 5.52 tons/hr of ash based on the boiler maximum continuous rating

7

operation. The ash will consist of bed ash (22.2%), air pre-heater hopper ash (3.6%), and EP ash (74.2%).

4. Bottom Ash

27. The bottom (bed) ash will be transported to the bed ash silo via a pneumatic conveying system. Three units of water-cooled ash screw coolers will be provided to cool the ash to below 200°C. A bottom ash surge hopper will receive the ash, which will be transported to the bed ash silo. A portion of the bottom ash will be reinjected to the furnace for recirculation through a bed media regeneration system.

5. Fly Ash

28. The fly ash handling system will collect fly ash from the air preheater hopper and electrostatic precipitator (EP) hoppers. The fly ash will be transported to the fly ash silo by pneumatic conveying system. Fly ash may also be reused as raw material for cement manufacturing.

6. Seawater Abstraction 29. During operations, about 45,000 m3/day of seawater will be used for cooling and freshwater production. The spent cooling water and the reject from the desalination plant will be discharged back into the sea after proper treatment. C. Land and Right-of-Way Acquisition

30. The Project requires about 8.4 ha of land for the main plant area. KSPC has entered into a land lease agreement with National Power Corporation (NPC) and Power Sector Assets and Liabilities Management Corporation (PSALM) together with SPC for the use of the abandoned ash pond in front of the existing Naga power plant. 31. The proposed route of the TransCo transmission line will affect 11 private landowners and 8 houses. Out of the proposed 16 steel towers, only 4 will be required for the new KSPC power plant. Of these 4 steel towers, 3 will be erected inside the existing Naga power plant and 1 outside the periphery of the existing Naga power plant compound. Negotiations regarding purchase of the land required and the compensation package are expected to be completed and mutually agreed by June 2009. D. Project Schedule and Contracts

32. The design and construction of the two 100 MW Visayas Base Load Power Project is contracted on a turnkey basis with the main EPC contractor. The target for commercial operation is February 2011 for the first 100 MW and in May 2011 for the second 100 MW. KSPC will be supported by EPC contractor and other consultants in overseeing the construction.

E. Project Management and Operations 33. The EPC Contractor will be the main entity responsible for implementation of the Environmental Management Plan (EMP) during construction and commissioning stage. The EPC contractor has established an Environment, Health and Safety Department composed of five staff members, including a manager and four technical personnel to handle environment,

8

health and safety matters. During operation, KSPC will be responsible to implement the EMP. KSPC has established an environment department, including a manager and a pollution control officer, to facilitate the Project’s environmental requirements. The department also receives support from the vice-president of SPC Power Corporation to ensure harmony between the existing plant and the new plant.

IV. DESCRIPTION OF THE ENVIRONMENT A. Physical Environment

1. Overview of the Project

34. The Project will be located in Colon barangay, Naga city, Cebu province. Naga is about 22 km south–southwest of Cebu, the capital city of Cebu province. The Project will be constructed in a reclaimed area that was previously utilized as an ash pond for Naga power plant, which is presently operated by SPC Power Corporation. Naga, identified as an industrial city, is home to the largest power generation (SPC Power Corporation), cement manufacturing (CEMEX), and limestone quarrying in the province.

2. Climate

35. The island province of Cebu has generally moist air. It experiences the northeast monsoon from October to May and the southwest monsoon from June to September. The project site will also experience the wet season (June to November) and dry season (December to May). Average annual rainfall is 1,519.4 millimeters (mm) and the number of rain days is 135. The mean annual temperature is 28°C and relative humidity is 79%. The average annual wind speed is 2 meters per second (m/s), with the highest value registering 55 m/s. 36. According to the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), the project area lies in a region that can expect the passage of one tropical cyclone (depression, storm, or typhoon) per year. This is likely to occur in November or December and has been taken into consideration in the structural design.

3. Drainage and Hydrology

37. The project area comprises mainly mountain ranges on the western side and Bohol Strait on the eastern side. The Project is located at the foothills of mountain ranges Settlement and residential areas occur from the lower regions to mid-height of the mountains. Most of the silt and sediment-laden waters discharge directly into Bohol Strait. Colon barangay and poblacion (adjacent barangay) are drained by two rivers—Colon River and Pandan River. Colon River is smaller, with headwaters west of the project site. It flows from northwest to southeast and exits to Bohol Strait about 0.5 km from the project site. Further west and south is Pandan River, which flows from north to south and then west–northwest to east–southeast to Bohol Strait about 1.5 km south of Naga poblacion. A large alluvial plain and delta have formed at the mouth of the river. It has a larger watershed than Colon River and could produce a larger water supply.

4. Geology

38. Cebu mainland is a long and narrow island located in the central Philippines, extending 200 km north to south and 20–50 km east to west. It has a 500–1,000 m high mountain range

9

with steep slopes in the central part and 100 m high hills spreading toward the coast. Coastal plains are limited. The coastline is fairly straight, with a few harbors, indicating long-shore current erosion. 39. A core of pre-cretaceous metamorphic basement rocks (trapped remnants of primitive plutonic arcs) underlies Cebu Island. Fault-bounded slivers of serpentinite schist, associated with deformed basement rocks, are thrust over the metamorphic basement.

5. Ambient Air Quality

40. The ambient air quality was monitored at seven different locations within a 1.2 km radius of the project site in October 2004, and additional sampling was conducted during construction in August and November 2008 (Appendix 2). These monitoring stations are based on the EIS prepared in 2005 for the environmental compliance certificate. The sampling and analysis methods, results, and location of the sampling sites are summarized in Table 1. Four parameters are monitored: sulfur oxide (SOx), nitrogen oxide (NOx), total suspended particulates (TSP), and carbon monoxide (CO). Generally, the results are significantly below DENR limits.

10 Table 1: Summary of Ambient Air Quality Monitoring Results

TSP (µg/Ncm) SO2 (µg/Ncm) NO2 (µg/Ncm) CO (ppm)

Sampling Station EIS

(2005)Aug 2008

Nov 2008

EIS (2005)

Aug 2008

Nov 2008

EIS (2005)

Aug 2008

Nov 2008

EIS (2005)

Aug 2008

Nov 2008

Station 1: Tangke barangay, basketball court 30.22 260.8 9.25 2.5 ND ND 6.1 2.19 10.59 NA 0 0 Station 2: Sitio Lower Colon, in front of

barangay hall 37.41 60.5 ND ND ND ND 10.1 5.41 8.36 NA 0 0

Station 3: Colon barangay 2.37 31.1 1.33 ND ND ND ND 3.82 6.78 NA 0 0 Station 4: Alinganga Street, near perimeter

fence of SPC Power Corporation 65.9 69.7 43.88 ND ND ND ND 4.36 19.69 NA 0 0

Station 5: Naga municipal hall, plaza area 7.64 6.2 14.77 ND ND ND 12 4.36 10.21 NA 0 0 Station 6: Construction site, near pier area 11.05 ND 6.60 ND 2.54 ND 16 ND 20.84 NA 0 0 Station 7: In front of Mangikis Chapel, Sitio

Mangikis 8.96 73.1 2.66 ND ND 7.12 3.94 NA 0 0

Minimum Detection Limit 1 7 1 0 DENR Standard 300 340 260 30

CO = carbon monoxide, DENR = Department of Environment and Natural Resources, EIS = environmental impact statement, NA = not analyzed; ND = not detected, NO2 = nitrogen oxide, SO2 = sulfur dioxide, TSP = total suspended particulates. Note: As part of monitoring activities during construction, sampling activities were conducted by Korea Electric Power Corporation (KEPCO)–SPC Power Corporation (KSPC) in August and November 2008 to monitor air emissions. a Samples were collected over a 1-hour period during October 2004, August 2008, and November 2008 to monitor the CO, NO2 , SO2, and TSP. b The method of sampling and analysis is based on United States Environmental Protection Agency methods and Philippine standard methods for air and water,. c Method of sampling and analysis: (i) TSP = high volume – gravimetric; USEPA App. B Part 50; (ii) SO2 = gas bubbler - Pararosaniline; USEPA App. A Part 50; (iii)

NO2 = gas bubbler – Griess Saltzmann; (iv) CO = direct reading – using electrochemical sensors. Source: SPC Power Corporation. 2005. Environmental Impact Assessment for the Proposed 2 x 100 MW Coal-Fired Thermal Power Plant Project. Naga, Cebu

(October).

11

6. Noise

41. Ambient noise was also monitored in five stations in October 2004 (Stations 1-5 in Table 1). Stations 6 and 7 were added to complete the seven monitoring stations of the ambient noise quality in August and November 2008. Daytime analysis was done for the three monitoring periods and the results range from 41 decibel (dB) to 67 dB for an industrial categorized area. The proposed plant will not significantly increase these levels once noise control and management are implemented. During nighttime, if the coal-handling facilities are not operating, the expected noise level outside the plant complex will be close to the background noise. Noise quality monitoring results showed that the values are below Philippine and World Bank standards and is satisfactory (Table 2).

Table 2: Noise Quality Monitoringa (dB)

Station/Location EIS

(2005) August

2008 November

2008 Station 1: Tangke barangay, basketball court 67 41 42.3 Station 2: Sitio Lower Colon, in front of barangay hall 64 58 56.2 Station 3: Colon barangay front of Nestor Cadia Res. 43 50 47.5 Station 4: Alinganga Street, near perimeter fence of SPC

Power Corporation 55 55.5 53.3

Station 5: Naga municipal hall, plaza area 61 47 48.6 Station 6: Construction site, near pier area — 53 47.1 Station 7: In front of Mangikis Chapel, Sitio Mangikis — 45.6 46.6 Minimum Detection Limit — DENR and World Bank Standard (industrial area) 70 (NPCC Standard)

dB(A) = decibel, DENR = Department of Environment and Natural Resources, EIS = environmental impact statement, NPCC = National Pollution Control Commission. a Noise quality monitoring is done via direct reading using electrochemical sensors. Daytime analysis were done

for the three monitoring periods and the results are ranging from 41 dB(A) to 67 dB(A) for an industrial categorized area.

Source: SPC Power Corporation. 2005. Environmental Impact Assessment for the Proposed 2 x 100 MW Coal-Fired Thermal Power Plant Project. Naga, Cebu (October).

7. Water Resources

42. Surface Water. Discharge and wastewater quality sampling in three stations was carried out for the cooling water discharges and ash pond from the existing power plant on October 2004, to be used as baseline data. Sample 1 was taken from the existing ash pond of the existing power plant about 200 m from the coast. Sample 2 was taken at the discharge/outlet (open-lined canal) of the existing thermal-fired power plant and sample 3 was taken at the discharge/outlet (open-lined canal) of the existing diesel-fired power plant. Results were then compared to DENR standards,7 and were found to be satisfactory except for the considerably high chemical oxygen demand (COD). These values will serve as benchmark discharge data of the existing power plant. The surface water quality monitoring results are shown in Table 3.

7 DENR. 1990. Department of Environment and Natural Resources (DENR) no. 35 Series of 1990 Subject: Revised Effluent Regulations of 1990, Revising and Amending the Effluent Regulations of 1982.

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Table 3: Summary of Surface Water (Discharge and Wastewater) Quality Monitoring

EIS, October 2005 Parameter Sample1 Sample 2 Sample 3

DENR Standards

pH 8.1 8.3 8.3 6.5–9.0 Turbidity (NTU) 20.97 5.24 6.03 — Total Coliform Count (MPN/100mL) 2 14 130 10,000

BOD5 (mg/l) 3 4 2 50 COD (mg/l) 887 804 670 100 TSS (mg/l) <2 <2 <2 70 Color (PCU) <5 <5 <5 150 Oil & grease (mg/l) <0.1 <0.1 <0.1 5.0 Dissolved oxygen (mg/l) 4 2 2 5.0 Cyanide (mg/l) <0.002 <0.002 <0.002 0.2 Arsenic (mg/l) <0.01 <0.01 <0.01 0.2 Chromium VI (mg/l) <0.003 <0.003 <0.003 0.1 Lead (mg/l) 0.21 0.22 0.22 0.30 Mercury (mg/l) <0.001 <0.001 <0.001 0.005 BOD = biological oxygen demand, COD = chemical oxygen demand, DENR = Department of Environment and Natural Resources, EIS = environmental impact statement, mg/l = milligram per liter, ml = milliliter, MPN = most probable number, NTU = nephelos turbidity unit, PCU = platinum cobalt unit, pH = potential of hydrogen, TSS = total suspended solids. Source: SPC Power Corporation. 2005. Environmental Impact Assessment for the Proposed 2 x 100 MW Coal-Fired Thermal Power Plant Project. Naga, Cebu (October).

43. Groundwater. Four stations were analyzed for the EIS, comprising of sampling stations from the two deep wells of the existing plant, public well located in Colon barangay and private well located in Tangke barangay. The resulting analyses of the four sampling stations show that the groundwater resources within the project site are of relatively good quality, with the exception of total dissolved solids, with reference to the Philippine National Standards for Drinking Water. In November 2008, the monitoring focused on the three stations from the Upper Colon barangay deep well, south tower deep well (existing plant), and Colon barangay deep well (near barangay hall). The results are similar to those of the EIS, and the level of total dissolved solids remained above the limits of the Philippine National Standards for Drinking Water. Groundwater has not been monitored intensively because the Project will use a desalination plant for water consumption during operations. No groundwater will be tapped during the construction and operation stage of the new power plant. Construction water will be sourced from the existing Naga City Water District. The groundwater quality monitoring results are shown in Table 4.

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Table 4: Summary of Groundwater Quality Monitoring

Parameter EIS, October

2005 August

2008 November

2008 DENR

Standards pH 7.3–7.7 7.1–5.5 7.0–7.1 6.5–9.0 Turbidity (NTU) 1.34–3.28 0.4–0.5 0.9–1.9 5.0 Total Coliform Count (MPN/100ml) <2.2 2–23 2 <2.2 Color (PCU) <5 5 1–3 5 TDS (mg/l) 612–859 640–1,054 679–901 500 Cyanide (mg/l) <0.002 <0.05 <0.05 0.07 Chromium VI (mg/l) <0.003 <0.01 <0.01 – Iron (mg/l) <0.001 <0.02 0.02–0.18 1.0 Lead (mg/l) <0.005 <0.01 <0.01 0.01 Manganese (mg/l) <0.006 <0.003 <0.003 0.50 Mercury (mg/l) <0.001 <0.0001 <0.0001 0.001 Sulfate (mg/l) 3.71–65.03 47–83 47–63 250 Nitrate Nitrogen (mg/l) 3. 54–4.39 3.2–3.69 3.91–13.21 50 DENR = Department of Environment and Natural Resources, EIS = environmental impact statement, mg/l = milligram per liter, MPN = most probable number, NTU = nephelos turbidity unit, PCU = platinum cobalt unit, pH = potential of hydrogen, TDS = total dissolved solids. Source: SPC Power Corporation. 2005. Environmental Impact Assessment for the Proposed 2 x 100 MW Coal-Fired Thermal Power Plant Project. Naga, Cebu (October).

44. Marine and/ or Coastal Water. Marine water quality was monitored at five different stations in the coastal area near the project site in October 2004, August 2008, and November 2008. These sampling stations were at the coastal water of Bohol Strait within the periphery of an APO Cement (CEMEX) plant and the existing Naga thermal power plant, as well as the NPC coal yard and existing private pier. The results were compared to the DENR standards for class SC marine water.8 COD exceeded the desirable limits in October 2004 for almost all of the stations. Some stations exceeded the pH limits in August 2008, with the exception of the station near the Naga City Hall. This was primarily because of the constant rainstorms during the monitoring period. In November 2008, the pH parameters had normalized. The marine water quality monitoring results are shown in Table 5.

8 DENR. 1990. Department of Environment and Natural Resources (DENR) no. 34 Series of 1990 Subject: Revised

Usage and Classification and Water Quality Criteria Amending Section Nos. 68 and 69, Chapter III of the 1978 National Pollution Control Commission (NPCC) Rules and Regulations.

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Table 5: Marine Water Quality Monitoring

Parameter EIS, October

2005 August 2008 November

2008 DENR

Standards pH 8.4–8.6 8.4–9.3 8.0–8.1 6.0–9.0 Turbidity (NTU) 5.97–9.11 0.5–1.2 0.5–1.6 — Total Coliform Count

(MPN/100mL) 2–1,600 7–240 2–8 1,000-

BOD5 (mg/L) <1 1–2 <1 100 COD (mg/L) 192–1,030 100–230 129–178 200 Color (PCU) <5 3–5 1 — TSS (mg/L) <2 – 4 2–40 7–42 Dissolved Oxygen 2 — — 70 Oil and Grease <0.1 3 Cyanide (mg/L) <0.002 <0.05 <0.05 0.05 Chromium VI (mg/L) <0.003 <0.01 <0.01 0.1 Iron (mg/L) - <0.02 <0.02 — Lead (mg/L) 0.10–0.17 <0.01 <0.01 0.05 Manganese (mg/L) - <0.003 <0.003 — Mercury (mg/L) <0.001 <0.001 <0.001 0.002 Sulfate (mg/L) — 2,621–2,668 2,516–2,551 — Nitrate Nitrogen

(mg/L) 0.01–0.15 0.04–0.48 —

BOD = biological oxygen demand, COD = chemical oxygen demand, DENR = Department of Environment and Natural Resources, EIS = environmental impact statement, mg/l= milligram per liter, ml = milliliter, MPN = most probable number, NTU = nephelos turbidity unit, PCU = platinum cobalt unit, pH = potential of hydrogen, TSS = total suspended solids. Source: SPC Power Corporation. 2005. Environmental Impact Assessment for the Proposed 2 x 100 MW Coal-Fired Thermal Power Plant Project. Naga,Cebu (October).

8. Land Use

45. The total land area for the Project is 8.43 ha. It is situated in Colon barangay, Naga City, Cebu. Naga City has a total land area of 9,650 ha. The project site is owned by NPC and a land lease agreement was entered into between NPC and KSPC for its utilization. 46. Naga City has 1,146 ha of arable land; about 4,694 ha are forest and/or reservation and/ or timberland and 7.8 ha are national parks and playground. From Naga’s total land area, 4,694 ha are declared alienable and disposable by the government of the Philippines. About 90% is rural area and the remaining 10% is the urbanized area. A combination of industrial, commercial, and residential area usage is found in Naga. The project site is situated in the industrialized area, along with the existing Naga power plant.

9. Soil

47. There are five types of soil composition in Naga area: Faraon clay, Lugo clay, Faraon Steep phase, Mandaue clay loam, and Baguio clay loam. The project site is characterized by Mandaue clay loam which has a surface soil color of light brown to dark, depending on the amount of organic matter and moisture content. It is friable when just moist, thick and sticky, soft when wet, and hard when dry. The substratum is made up of compact clay loam.

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B. Biological Environment

1. Terrestrial Environment

48. There is no distinct natural forest vegetation in the area of observation although there are some naturally grown trees, shrubs, and grasses—especially on the mountainous area near the existing power plant. Some lots in the upper portion of the barangay, especially those near the mountainous area, were planted with trees (Acacia auriculiformis), fronting both sides of the road separating the existing power plant and the project site. Fruit trees, ornamental trees, and flowering plants are commonly found in the landscape and almost every household in the community. 49. The coastline of Naga has lost many of its natural distinctive features, as most of it has been inhabited by local residents.

50. Flora. No significant floral communities are found in the area and there are no endangered flora species in the study area. Cogon grass is dominantly found in uninhabited areas. In terms of vegetation, the area can be classified as distributed brush land vegetation. There are no significant residual secondary forest growths in the area, although several tree species (both naturally grown and planted) proliferate throughout. The most notable vegetative feature along the shoreline is the propagation of Acacia farnesiana, locally known as Aroma. 51. A variety of weeds and shrubs, such as Chromolaena odorata and Imperata cylindrical, is abundant in the open fields. The dominant vegetation type on the construction site is planted trees, such as Acacia auricoliformis, Acacia mangium, and Acacia farnesiana, which grows closely with shrubs, grasses, and weeds. 52. Fauna. There are no significant wildlife habitats or endangered species within the project site, except for some common domestic animals (dogs, cats, goats, etc.). The only natural habitat that could be considered significant to fauna is the bushland at the back of the existing power plant. Most of the area has been designated as industrial, residential, and commercial establishments, which limits the opportunity for wildlife to proliferate or survive.

2. Marine Environment 53. The species inventory was limited to the benthic macroalgae and seagrasses observed within and outside the transects made in four of six sites examined, including those that were found outside the quadrats.9 Large brown seaweed Sargassum dominated in the area but small algae found as understory community, was likewise recorded and their percentage frequency and cover was estimated. A total of 53 species, comprising 20 greens, 12 browns, and 21 reds, of macrobenthic algae and four seagrass species have been found to date in the six sites visited within Naga municipal waters. The marine algae were mostly recorded in the reef areas; only three species (Enteromorpha clathrata, Intestinales, and Halimeda simulans) were recorded in the intertidal zones where the substrate is predominantly sandy.

9 The frequency of occurrence, defined here as the number of times a species occurs over a given number of

quadrat placements, was estimated in reference to a transect line laid out across the reef and intertidal zones (perpendicular to the shore). The percentage cover, defined as the area of the bottom surface occupied by a species, was estimated using a 0.25 m2 quadrat placed at 10 m intervals along the same transect line used for the frequency estimate.

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54. Phytoplankton. The plankton community structure of the waters fronting the proposed coal-fired thermal power plant site hosts a variety of species. A total of 54 plankton taxa were identified (38 phytoplankton and 16 zooplankton). Cyanobacteria or blue green algae (45.17%) were the major group comprising the phytoplankton population; it attained the highest numerical abundance (cells/liter) but not number of species. Dinoflagellates followed, with an average of 18.21% in numerical abundance and the highest number of taxa (16). More usually, as in nearshore areas, the diatoms (centric, pinnate, and silicoflagellates) contributed to the bulk of the phytoplankton biomass (36.62%). The buildup of this large stock of diatoms has been attributed to their high growth rates. Most of the dinoflagellate Peridinium quinquicorne Abe' form blooms in Maribago Bay, Mactan. Some other planktonic cyanophytes (such as Trichodesmium) can also make up a significant part of the oceanic phytoplankton and form blooms. 55. Zooplankton. The three most numerically abundant zooplanktons are the Acartia naupli, Acartia copepodites, and Tintinnopsis species. There were no major differences in the zooplankton structure between stations, as evidenced by the nearly similar compositions. The presence of large algal communities (Sargassum), which are documented to be breeding places for a variety of fish and other marine organisms, could partly explain the high counts of this type of zooplankton in this area. 56. Coral. Coral coverage was generally poor, particularly in the areas immediately in front of the proposed site for the new power plant and toward the southern areas. These were dominated primarily by large stands of the brown algae. Sarsagasum tends to overgrow the area and prevents the corals from recruiting new coral into their community successfully. The large formerly living coral colonies now serve as substrate for growth and proliferation of the more hardy algal species. The coral colonies may never be able to recover completely, as the high nutrient coming from untreated domestic sewage continuously released by nearby residents will always tend to favor seaweed rather than coral. Toward the north of the proposed site, the patch reefs were much more successful in terms of cover. However, the percentage of live coral cover was still fair at best and was predominantly composed of the massive coral of the genus Porites. Nevertheless, isolated areas had good whole coral colonies of the table-forming Acropora. The relatively strong tidal currents in these areas experienced during the field surveys could be partly responsible for the good growth of the corals, as they carry away the suffocating sediment load discharged by adjoining rivers. Particularly in stations to the south of the proposed site, the high sediment load in the water was obvious, with low horizontal visibility experienced by the team during the survey. 57. KSPC will conduct a detailed marine ecological study as the basis for the final design of the discharge tunnel. The result of the marine ecological survey work will determine the exact location of the coral reef and other existing marine biota to be avoided by routing the proposed discharged tunnel. According to the project schedule, the design of the discharge tunnel will be completed by 16 March 2009; modeling of thermal impacts is to be done in the 3 subsequent months, and excavation of the tunnel is to commence on 17 June 2009. 58. There are no rare, endangered, or threatened floral or faunal species present at the proposed project site and surrounding areas, in either the terrestrial or marine environment. C. Sociocultural Environment

59. Population. The city of Naga, with 28 barangays, had a population of 80,189 persons as of 2000. There are 15,806 households in the city, with a growth rate of 3.3% (1990–2000). Nine

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out of the 28 barangays are urban. The urban population was 26,984 persons in 5,490 households (2000 figures). The population growth rate was 8.8%, which is higher than the city growth rate. The urban population density was 2,776 persons/km2 against a city population density of 831 persons/km2. 60. Health Services. Health services are being delivered to the residents of Naga through two rural health units and their respective barangay health stations. In addition, one hospital, two medical clinics, and two dental clinics provide health care. The CEMEX hospital, located in Tinaan barangay, services the health care needs of CEMEX staff and dependants. Serious medical cases are referred to the nearby Minglanilla District Hospital or Don V. Sotto Memorial Hospital in Cebu City. Based on records, pneumonia, arteriosclerosis, heart disease, and cancer were the leading causes of mortality. The prevalence of these diseases is common in industrialized and urbanized areas. 61. Social Infrastructure and Services. Naga, an industrialized city, has a sufficient supply of electricity (Visayan Electric Company) and water (springs, deep wells, and Naga Waterworks Systems). Basic social infrastructure and services include schools, health and medical services, public transportation, highways and roads, communication services, sports amenities, churches, and public markets. Almost all basic necessities can already be provided by the city. 62. Economy and Employment. The main products of the city include agricultural, industrial, agro-industrial, mining products, and electricity. Commercial establishments are widespread throughout the urban area of the city, which includes public markets, convenience stores, and some financial institutions. The city government’s income is mainly sourced from individual retirement accounts, real estate property taxes, and business and license fees. Employment opportunities are high, since there are big industries in the area (such as the power plants, cement factories, and chemical manufacturing plants). 63. Historic and Religious Sites. St. Francis de Assisi Church (about 1 km from the site) is one of the most historical and important structures in Naga. Its construction in 1829 marked the creation of the town. It is made of coral stone and hard wood. Other small parishes and churches are located throughout the barangay.

V. ALTERNATIVES

A. With- and Without-Project Alternatives

64. In 2008, the Visayas grid only has limited reserves based on the last two columns of Table 6. If there will be no new power plants to be constructed in the Visayas grid by 2011, there will be a deficit of power supply because demand continues to increase annually. Based on the TransCo Visayas System Operation, the Visayas Grid (Map 2) has the following status:

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Table 6: Visayas Grid Power Sector Situationer for 2008 and 2011

Reserve Year

Dependable Capacity

(MW) Maximum Peak Demand (MW) Low Dependable

Capacity (MW) High Dependable

Capacity (MW) 1089 (max) 14 (max) 121 (max) 2008 1103-1210

1037 (weekdays ave. peak demand)



1343 (max) (240) (max) (133) (max) 2011 1103-1210


(240) (weekdays ave. peak demand)

(133) (weekdays ave. peak demand)

() = negative, MW = megawatt Source: TransCo Visayas System Operation. 65. With the construction of the new power projects in the Visayas grid (such as the 200 MW KSPC coal plant and 20 MW Nasulo geothermal project), the deficit in power supply will be reduced. Table 7 shows the Visayas Grid Power Sector Situation for 2011.

Table 7: Visayas Grid Power Sector Situation, 2011 (with new power plants) (MW)

Reserve

Year Dependable

Capacity

Maximum and Weekdays Average Peak

Demand Low Dependable

Capacity High Dependable

Capacity 2011 1,323–1,430 1,343 (20) (max) 87 (max)

( ) = negative, max = maximum, MW = megawatt Source: TransCo Visayas System Operation.

66. The “without-project” scenario is undesirable because the power shortage would hamper the economic growth of the region.

B. Alternative Project Locations

67. The criteria for selection of project location include accessibility to the transmission grid or substation, availability of reliable water supply, and access to coal transport. Three options were provided for the project location within Cebu: (i) in front of the existing Naga power plant, Colon barangay, Naga; (ii) Talavera barangay, Toledo, near the Talavera substation in western Cebu; and (iii) in Medellin, near the Medellin substation in northern Cebu. 68. As much as possible, the plant has to be located near the grid transmission lines and substations to minimize transmission losses. Accessibility to the transmission grid system allows the cost-effective evacuation of power to the grid. This criterion is present in the three options given. 69. Reliable water supply is also a major criterion for locating the plant, as thermal plants utilize a significant amount of cooling water. Options 1 and 2 provide reliable and sufficient seawater supply for cooling water, as they areas are situated on the coast.

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70. The majority of the coal supply will be imported from Indonesian suppliers, so it is important that the project location be near coastal areas. Choices 1 and 2 provide better options for the construction or establishment of pier facilities. 71. Option 1 provides better accessibility and connectivity to the grid, as the substation in Talavera barangay (option 2) would still have to be transferred to Naga substation to connect fully to the Visayas grid. Therefore, less transmission loss would be expected if the Project were constructed in Naga.

C. Alternative Fuels

72. During the project planning stage, various types of power plant were considered. Natural gas could be used as a base load or peaking plant; and it generates minimal carbon dioxide, particulate matter, and sulfur dioxide compared with coal. However, accessibility to supply from other islands is a big issue as there are no existing piping systems. Geothermal and hydroelectric power plants would be good base load plants but they are location-specific and there is no known source in Cebu. A wind power plant, utilizing renewable energy, is a location-specific plant; and needs a large area for a wind turbine, which is not available in Cebu. This leaves two options, which are not site-specific and can be used as base load plants—nuclear and coal-fired power plants. Nuclear plants that do not produce smoke or any gas emissions are a good option, but it would be difficult to achieve social acceptance of such a plant. Radioactive waste disposal is a major concern for nuclear power plants. A coal-fired power plant would be the most appropriate plant to be constructed in Cebu, with accessibility to coal suppliers (through sea ports), availability of coal supplies (both imported and locally), low capital cost, and availability of clean coal technology.

D. Alternative Boiler Technologies

73. Pulverized coal, also known as conventional coal technology, is one of the most widely used power generation technologies worldwide. However, because of the availability of new coal technology, most new coal-fired power plants are already adopting CFBC. A comparative description of CFBC and pulverized coal boilers is in Table 8.

Table 8: Comparative Description of CFBC and Pulverized Coal Boilers

Parameters CFBC Pulverized Coal Operation Simple Complex Firing Temperature 750°C–950°C 1,200°C–1,500°C Coal Size Wide Range (under 15 mm) Limited (under 0.07 mm) Appurtenant Facility Crusher Crusher and Pulverizer Environmental Control SOx NOx

Direct Limestone Injection CFBC CFBC

LSD or FGD

None Bed Media Limestone None

CFBC = circulating fluidized bed combustion, FGD = flue gas desulfurization, LSD = Lime Spray Drying, mm = millimeter, NOx = nitrogen oxide, SOx = sulfur oxide, °C = Celsius.


74. Projected levels of emissions of air pollutants for CFBC and pulverized coal boilers are compared in Table 9. The results shown in the table below support the choice of CFBC over the conventional or pulverized coal boiler.

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Table 9: Air Emission Criteria of CFBC and Pulverized Coal Boilers (mg/Nm3)

Emissions

Pollutants Philippine DENR

Standards World Bank Standards CFBC Pulverized

Coal SOx 700 (245 ppm) 50 560 1700

NOx 1,000 (487 ppm) 2,000 or maximum level of 0.2 tpd per MW up to

500 MW, 0.1 tpd per MW > 500 MW

410 ~1000

PM (dust) 150 750 (365 ppm) for coal, 460 (225 ppm) for gas

100 @ 12% CO2

~200

CFBC = circulating fluidized bed combustion, CO2 = carbon dioxide , DENR = Department of Environment and Natural Resources, mg/Nm3 = milligram per normal cubic meter, MW = megawatt, NOx = nitrogen oxide, PM = particulate matter , ppm = parts per million, SOx = sulfur oxide, TPD = tone per day. Source: SPC Power Corporation. 2005. Environmental Impact Assessment for the Proposed 2 x 100 MW Coal-Fired Thermal Power Plant Project. Naga, Cebu (October).

75. While CFBC appears to be the preferred technology option for the proposed Project, based on its comparison with conventional pulverized coal technology, there has been no effort globally to adopt supercritical technologies for a project size of 100 MW unit capacity. Cost-effectiveness has been the main reason for larger-scale coal-fired power plants (about 500 MW or higher) to consider adopting a supercritical option worldwide, as seen in India or China. E. Alternative Cooling Systems

76. Two cooling system alternatives were considered: (i) a closed or recirculation system; and (ii) an open, or once-through, system. The closed system cools the cooling water in cooling towers before recycling it. It is typically considered in areas where the source comes from rivers, lakes, or reservoirs and there is no open and large receiving body of water for its discharge. The location for the blowdown discharge and its volume to maintain the quality of water also has to be considered, depending on the available source and environmental guidelines in the area. The once-through system, on the other hand, typically has its source in an open body of water such as the sea and discharges the entire volume of warm cooling water back into it. 77. The once-through system was selected because of the proximity of the project location to the sea and the unavailability of a large volume of water sources such as river, lake, or reservoir. Further, it was determined that the existing seawater intake canal of Naga power plant would be sufficient to supply the Project’s requirement—except for minor modifications and improvement. F. Design Alternatives for the Intake and Discharge Canal Systems

78. The existing intake canal will be used by the new power plant. However, a new discharge canal will be constructed, depending on the results of thermal modeling, to ensure that the nearby patch of coral reef does not experience a temperature rise of 0.5°C to protect the remaining coral and biota. Initially, it was proposed that the discharge tunnel be directed to the east, going directly to Bohol Strait, but this may directly hit the existing coral reef in the area. Thus, an alternative is under consideration that would redirect the discharge tunnel to the north, going to the discharge canal of the existing Naga power plant. In this manner, no coral reef

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would be directly hit and the risk of recirculating the warm water from the discharge canal would be minimized. These scenarios will be compared and the option with the least impact to the coral reef will be chosen for the plant after DENR approval. Therefore, a final marine ecological survey and thermal modeling will be undertaken for final analysis of the discharge canal system.

G. Alternative Water Resources

79. Three options for water sources are available for this Project: underground water, seawater, and combination of both. The total water consumption of the plant on a daily basis is about 912 m3. A hydro-geological study has been conducted to investigate the maximum safe groundwater extraction rate, which was found to be 3,960 m3/day. The projected total domestic and industrial (including the new power plant’s requirements) water requirement for 2025 is 1,945 m3/day. However, since the plant has its own desalination plant for the total water requirements, the community’s groundwater aquifer is secured from water extraction. VI. ANTICIPATED ENVIRONMENTAL IMPACTS AND MITIGATION MEASURES

A. Physical Environment

1. During Construction

80. The project construction stage could cause environmental impacts, including air pollution, noise pollution, waste generation, water quality interruption, and traffic. These impacts are basically short-term and coterminous with the construction phase. Through the implementation of a sound EMP, these impacts can be mitigated and minimized.

81. Air Quality. Possible sources of air pollution during the construction stage are (i) dust emissions from soil disturbance activities and continuous vehicle movements; and (ii) exhaust from generators, heavy equipment, and vehicles. These impacts could be mitigated through (i) constant water spraying on roads and the construction site, covering loading trucks, and constant sweeping; and (ii) proper maintenance of equipment, use of low-emission vehicles, and use of electrically-driven construction equipment. 82. Noise Quality. Noise pollution is inevitable during construction because of the use of heavy equipment, generators, and vehicles. To mitigate this concern, operation of heavy equipment producing high noise levels will only be allowed during daytime. If it is necessary to operate such equipment during nighttime, permission and coordination will be undertaken with local authorities for proper notification. Use of equipment with no noise emissions, such as hydraulic static pile driving equipment, will be utilized for pile driving works. Maintenance of equipment, generators, and vehicles will also help control noise levels. 83. Soil. Silt contamination in the immediate surrounding is projected to occur during construction phase of project implementation. Vegetation in the immediate project area will be covered by layers of soil and affect natural growth patterns. Animal habitats may also be covered by layers of soil that affect growth, or be covered with silt that could disrupt normal living patterns. Silt contamination of natural waterways will increase invariably, resulting in elevated levels of turbidity—affecting water quality for drinking and other domestic purposes. Silt traps and silt curtains will be established to minimize or eliminate adverse impacts. 84. Coastal Erosion and Sedimentation. Coastal sedimentation will bury the natural coastline and affect marine biota. Water quality along the coast will worsen because of an

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increase in suspended materials from earthmoving and construction activities. Hydraulic on conveyance facilities should be installed to handle increased runoff. Drainage lines and other hydraulic structures should be constructed adequately, preferably at the start of project development. Runoff velocities should be kept low through the development of milder slope or breaking the slope, to decrease the erosive force of water. Sediment basins may be constructed to prevent eroded ash pond materials or sediment from leaving the site. Sedimentation basins can trap large volumes of sediment. These can be constructed during the construction phase, in anticipation of the large volumes of silt that go with runoff. This can protect beach areas from being murky or silted. 85. Water Quality. Areas cleared and stripped of vegetative cover and slope cuts are the primary sources of materials that may induce siltation and sedimentation of nearby water bodies. Loose soil during earthmoving activities, as well as construction debris during the construction phase, may affect the water quality of surface water flowing in the area. The operation of heavy equipment will likewise contribute to sedimentation by silt and mud at the project site. Erosion rates may increase because of heavy equipment traffic in work areas. Proper management, handling, and disposal of spoils and unsuitable materials will be practiced during project implementation to prevent siltation and sedimentation of nearby water bodies. Physical and operational measures—such as the construction of bund walls of adequate capacity around fuel, oil, and solvent storage tanks—will be undertaken to minimize the risk of contamination of nearby receiving bodies of water. Oil and grease traps in drainage systems (from workshops, vehicle and plant washing facilities, and service and fuelling areas) will be established to prevent contamination of the water bodies. All effluents from work areas and relevant facilities will be within water quality standards established by the Environmental Management Bureau. 86. Traffic. Constant movement of vehicles and equipment to and from the construction site will cause traffic volume along the national highway to increase considerably. Traffic enforcers and road signage will be placed on the highway near the construction site main gate to help ease and control the traffic, and prevent accidents. 87. Oil and Chemical Spills. Oil and chemical spills can be mitigated through the storage of these materials in sealed tight containers that are properly labeled. Fire suppression and spill control measures will also be provided. 88. Runoff. Construction of access roads as well as excavation and leveling could contribute to water contamination, increase in turbidity, and siltation. Containment and construction of siltation dams and minimum vegetative removal will mitigate this issue. 89. Construction Waste. Various waste materials will be produced throughout the construction phase, including metals, concrete, used oils, and domestic waste. This will be thoroughly addressed by the formulation and implementation of a sound waste management plan. Each type of waste will have specific collection and disposal procedures for proper handling—in compliance with local rules and regulations. 90. Excavated Ash Spoil. About 169,482 m3 of ash was disposed of from the construction site during site grading works. The excavated ash was utilized by the city of Naga as backfilling material for city’s reclamation project. Some of it was also utilized by individuals as backfilling material; prior certifications were secured from DENR. Prior to hauling and transportation of the excavated spoil, laboratory testing showed that the ash contained no hazardous waste element and DENR approved the transportation of the ash materials.

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91. Sanitation and Hygiene. At the peak of construction activities, 500–1,000 workers (both skilled and unskilled) will be required. Toilets with septic tanks will be provided in the construction site for sewage disposal. Workers are also required to produce medical certification prior to recruitment to determine if they are fit to work on the construction site. Domestic and solid waste will be managed through implementation of the waste management plan to maintain cleanliness on the construction site.

2. During Operation

92. During plant operations, the main environmental impacts will be continuous emissions from the plant’s operation. This includes air emissions, noise emissions, liquid effluents, thermal pollution, and ash production. The corresponding mitigating measures, such as installation of pollution control devices, are being addressed in the EIS and the EPC contract. 93. Air Emissions. During operations, coal-fired power plants produce the following major pollutants: SOx, NOx, SPM and CO2, which is a major contributor to greenhouse gases.10 With utilization of CFBC technology, (i) SOx production will be reduced significantly because of the introduction of limestone for sulfur capture, and (ii) NOx production will be significantly reduced because of the lower firing temperature at 750°C–900°C. An electrostatic precipitator will be installed with a minimum of 99.68% efficiency for design coal to reduce particulate matter emissions. The emission standards of the World Bank’s Pollution Prevention and Abatement Handbook (PPAH)11 guidelines and Philippine standards set by DENR are in Table 9. 94. Ambient Air Quality. The plant will discharge gases through a 110 m high stack, in compliance with DENR emission requirements. The ambient air quality was predicted using the United States Environment Protection Agency (USEPA) formulated air pollution Gaussian plume dispersion model CALPUFF12 system. The predictions were based on data in Table 10. Model assumptions include (i) computational domain of the model covering an 8 x 6 km2 area centered project site, and (ii) simulation of pollutants’ concentration for eight wind directions. 95. For the proposed KSPC 200 MW power plant, Table 10 shows that the 1 hour average concentrations for SO2 are significantly below the DENR standard of 340 µg/Nm3 that ranged from 39.2 µg/Nm3 to 44.2 µg/Nm3. For NO2, the simulated 1 hour concentration ranged from 24.3 µg/Nm3 to 27.3 µg/Nm3, which is within the 260 µg/Nm3 DENR standard. The predicted 1-hour average for particulate matter showed a very low level, from 6.3 µg/Nm3 to 7.1 µg/Nm3, which is considerably below the standard of 300 µg/Nm3. For a 24-hour average, the three pollutants (SO2, NO2, and particulate matter) are within the DENR standard. 10 The amount of CO2 generated by burning 729,500 metric ton (mt) per annum of Indonesian coal would be about

1,006,148 ton per annum. 11 The World Bank Group. April 1999. Pollution Prevention and Abatement Handbook 1998. Washington, D.C. 12 CALPUFF Is a multi-layer, multi-species, non-steady state puff dispersion model which can simulate the effects of

time- and space-varying meteorological conditions on pollutant transport, transformation, and removal.

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Table 10: Proposed KSPC 200 MW Power Plant Simulation

(µg/Nm3)

1 Hr Average 24 Hr Average Wind Direction SO2 NO2 PM SO2 NO2 PM North 43.0 27.0 7.0 23.4 14.5 3.8 Northeast 41.6 25.7 6.7 22.5 13.9 3.6 East 41.2 25.4 6.6 22.2 13.7 3.6 Southeast 39.2 24.3 6.3 20.9 12.9 3.4 South 2.3 26.2 6.8 22.8 14.1 3.7 Southwest 44.2 27.3 7.1 23.5 14.5 3.8 West 41.6 25.7 6.7 22.6 13.9 3.6 Northwest 43.4 26.8 7.0 23.1 14.3 3.7 DENR Standard 340 260 300 180 150 230

DENR = Department of Environment and Natural Resources, KSPC = KEPCO SPC, MW = megawatt, NO2 = nitrogen dioxide, PM = particulate matter, SO2 = sulfur oxide, µg/Nm3= microgram. Source: SPC Power Corporation. 2005. Environmental Impact Assessment for the Proposed 2 x 100 MW Coal-Fired Thermal Power Plant Project. Naga, Cebu (October).

96. Noise Levels. The noise from a thermal power plant comes from different sources. During operations, it may come from blowers, air compressors, hydraulic pumps, electrical motors, turbines, safety and relief valves, and high pressure pipe vents and drains. Noise levels from these sources may range from 80 dB to 100 dB. Noise levels of the present condition have already been characterized, and they vary on average from 41 dB to 67 dB during daytime and nighttime. The Project will not significantly increase the noise levels once noise control management is implemented. 97. To control noise generation, the following measures will be implemented: (i) usage of low noise equipment; (ii) installation of soundproof walls and doors; (iii) installation of fans, pumps, compressors, and motors indoors; (iv) provision of steam vents with silencers; (v) operation of a coal stockyard and ash disposal system during daytime; (vi) enclosure of the coal yard with embankments and trees for noise damping; and (vii) usage of ear protection gear for workers. 98. Coastal Erosion and Sedimentation. During operation of the power plant, it is perceived that the threat and problems associated with coastal sedimentation would be minimized. It would be advisable to continue sedimentation mitigation and minimization measures during the construction stage to prevent further degradation of the physical environment and effects on the social environment. 99. Water Quality. The major impact on the quality of water bodies within and near the proposed project area is the discharge of heated water, utilized to cool the power generating units. This is discharged with a much higher temperature than the ambient temperature of the receiving water body, disrupting the ecological equilibrium in the receiving body of water. Aside from having a high temperature, the discharged cooling water contains anti-fouling chemicals that may prove toxic to nearby living organisms. Impacts of the release of thermal effluents and anti-fouling chemicals may be localized in scope but may produce significant effects because of constant release into the environment. Cooling facilities and other cooling technologies will be constructed and employed to address the discharge of heated water into the receiving bodies of water.

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100. Coal Dust. Coal will be received via coal barge and unloaded through the coal unloading facility. It will then be transported to the coal yard (open and closed) by enclosed conveyor system. Crushed coal will be sent to the coal silo for storage and will be fed to the mill. Coal will be stockpiled in the coal yard and reclaimed on a regular basis. From the crushing facility and stockpiling, fugitive dust are bound to be observed. 101. The dust collection system will include a dust collector; exhaust fan; air compressor; screw conveyor for the screen and crusher building; scraper transfer tower and coal silo. A dust suppression system will comprise a coal pile spray pump, coal pile spray gun, piping support and valves for the coal storage pile, underground hopper, and transfer towers. Water containing coal dust will be directed to the coal settling pond and will be reused as dust suppression water. 102. Water Use. Daily water consumption for plant operation will be about 900 m3, including demineralized, service, and domestic water requirements. All the water requirement of the plant will be sourced from the desalination plant and no groundwater extraction will occur. 103. Effluent Discharge Quality. The plant will generate normal and abnormal wastewater from boiler blowdown, laboratory, sampling and chemical dosing system, EP washing, and boiler cleaning. Wastewater will be treated on-site, primarily reused, and excess will be occasionally disposed of in the sea. The effluent discharge quality complies with Philippine and World Bank standards (Table 11).

Table 11: Effluent Discharge Quality

Parameters KSPC Design

Criteria Philippine Standards World Bank

pH 6~8 6~9 6~9 BOD (ppm) 10 100 — COD (ppm) 20 200 - Suspended solids (ppm) 10 150 50 N-Hexane extraction matter (ppm) 0.5 — — Turbidity (NTU) 2 — — Color intensity (degree) 20 — — Temperature rise (°C) 3 3 3 °C = degree centigrade, BOD = biological oxygen demand,, COD = chemical oxygen demand , KSPC = KEPCO SPC , NTU = Nephelos turbidity unit , ppm = parts per million, pH = potential of hydrogen.


104. Ash Disposal. The plant will generate ash at a rate of about 250 tons/day. Ash will be transported to a nearby cement plant to be used as a raw material on a regular basis. Ash collection will be in a dry form and will be stored in the ash silo. It will be transferred though a closed truck to minimize the release of fugitive dust. In emergencies, ash will be transferred from the silo in a humidified form and stored in the emergency ash pond. High density polyethylene (HDPE) will be lined in the ash pond area to ensure that there will be no ground seepage of the wet ash.

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B. Biological Environment 1. During Construction

105. Since the species (flora and fauna) found are very common in the locality, minimal disturbance is expected during the construction stage. In fact, the construction site utilized previously as an ash pond houses only minimal floral and faunal community. The faunal community might be disturbed if vegetative cover is stripped, but this will only be temporary and will be regained after the construction stage. The overall impact on the environment will be negligible. Tree cutting will be avoided as much as possible to minimize disturbance to the faunal community. 106. In terms of marine ecology, the unavoidable disturbance of sediments caused by activities on land will cause a temporary increase in the turbidity of waters in the area, particularly during heavy rain. Total suspended solids (TSS) will be monitored regularly and appropriate measures will be taken in case of a noticeable increase in value.

2. During Operation

107. Potential impacts during plant operations will include disturbance in aquatic life caused by discharge of heated water and wastewater, soil and water contamination from oil spills, and deposits of suspended particles in some floral community. To protect the aquatic and marine life, the increase in water temperature will only be up to 3oC, which is within environmental standards. The wastewater effluent, aside from being minimal in generated volume, will be below DENR and World Bank environmental standards. Proper handling and storage will be ensured to facilitate the control of fuel and chemical spills. Installation of highly efficient EPs will significantly reduce the emission of particulate matter.

C. Sociocultural Environment

1. During Construction

108. Informal Dwellers and/or Settlement. The project site land is owned by the Government through NPC. Prior to the start of construction, 22 households (informal dwellers) were situated on the northern side of the site. To date, 17 families have voluntarily relocated their houses outside the boundary of the Naga land, with assistance from the local government unit of Naga and KSPC. The remaining 5 families will not be adversely affected by the plant, as they are located outside the areas fenced off by KSPC. 109. Social and Cultural Conflicts. Transient workers from other barangays or neighboring municipalities may increase as a result of construction of the Project. This would increase the risk of transmitting communicable diseases and creating social conflicts among the population. If skills required for the construction are available locally, local people will be given priority. Workers and laborers will be provided with accommodation by the contractor, and this will be coordinated with the local government. The workers will also be monitored by the contractor concerning health and sanitation matters.

2. During Operation

110. Employment and Livelihood. During operation, about 180 people will be employed (locals and expatriates) for the continuous operation of the plant. This will provide employment

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opportunities for qualified locals, and will contribute directly and indirectly to business opportunities in the area. Priority will be given to qualified residents of Naga for employment in operation of the plant. The hiring policy will minimize the influx of migrants, who would exert tremendous financial pressures on the delivery of basic services by the host municipality. 111. Health. Air pollution is the primary health concern of nearby residents and other stakeholders, as the fuel to be used is coal. Experience in other places has shown that high levels of carbon dioxide, nitrogen, and sulfur from a coal-fired power plant are emitted to the atmosphere. The proponent shall ensure that the anti-pollution technology and devices are functioning at all times. The CFBC technology will use calcium carbonate to trap and solidify the sulfur and its derivates present in the coal. Furthermore, the relatively low burning temperature in the furnace will lessen the derivatives of nitrogen to an acceptable level. The EP will be installed to eradicate the suspended particles from going into nearby communities. In addition, the storage area for coal will be enclosed by a roofed structure to prevent the carbon ash from going into nearby communities. KSPC will continue monitoring the health of local communities, and contribute to the improvement of health services and facilities. Periodic medical missions with free medicines will continue to be provided by KSPC. 112. Additional Revenues to the Local Government Units. The barangays, municipality, province, and region will benefit directly from the Project through additional financial resources provided by Section 289 of the Local Government Code13 and ER 1-94 from the Department of Energy14 (DOE). KSPC will assist the municipality in tapping the funds provided by Section 289 of the LGC and ER1-94 of DOE. D. Induced Development

113. Demand for food and skills will increase during the construction and operation stages of the Project. Employment opportunities will also increase because of the demand of labor to operate the power plant. This will likely promote the development of the local areas and encourage them to enhance their knowledge and skills in the technical aspects of an industrial community. There will be increasing economic activity within the area because of salaried employees of the company and the contractors. The Project will also spur new businesses and expansion of existing establishments for products and services, multiplying its economic effect. Traffic volume will increase because of the new establishments and influx of people. E. Cumulative Impact 114. The cumulative impact assessment focused on the effects of emission of the existing Naga power plant and the proposed KSPC 200 MW power plant, together with the APO Cement (CEMEX) plant—among other potential sources of pollution. For the existing Naga power plant, the simulation model results showed that the predicted 1 hour concentrations for SO2 ranged from 43.3 µg/Nm3 to 45.8 µg/Nm3 and for NO2 ranged from 29.0 µg/Nm3 to 36.4 µg/Nm3 while the particulate matter ranged from 407.0 µg/Nm3 to 482.4 µg/Nm3. The predicted concentrations

13 Republic Act 7160 Local Government Code of 1991, Section 289- Share in the Proceeds from the Development

and Utilization of the National Wealth states that Local Government Units shall have an equitable share in the proceeds derived from the utilization and development of the national wealth within their respective areas including sharing the same with the inhabitants by way of direct benefits.

14 ER No. 1-94 promulgated by the DOE on 24 May 1994 prescribed the provision of direct benefits to pertinent Local Government Units hosting energy generating facilities and/or energy resource development projects within their jurisdiction to Section 5 of Republic Act (RA) 7638-DOE Act of 1992.

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for SO2 and NO2 are within the 1 hour DENR standard of 340 µg/Nm3 for SO2 and 260 µg/Nm3 for NO2. The results of particulate matter or total suspended particulate (TSP) have exceeded the allowable 1 hour standard of 300 µg/Nm3. 115. For the 24-hr average concentration, the simulation model results showed that SO2 ranged from 23.5 µg/Nm3 to 26.0 µg/Nm3, which is significantly below the standard of 180 µg/Nm3. For NO2, the 24 hour concentrations ranged from 15.6 µg/Nm3 to 21.5 µg/Nm3—within the allowable standard of 150 µg/Nm3. The TSP 24-hour average concentration is from 89.5 µg/Nm3 to 263.2 µg/Nm3; however the two wind directions (northeast and south winds) exceeds the DENR standard of 230 µg/Nm3 . Table 12 presents the results of the existing Naga Power Plant simulation.

Table 12: Existing Naga Power Plant Simulation (µg/Nm3)

1-Hour Average 24-Hour Average Wind Direction SO2 NO2 PM SO2 NO2 PM

North 44.9 29.4 401.5 24.4 16.4 218.9 Northeast 43.5 31.3 428.9 25.1 19.2 239.7 East 45.7 34.4 359.0 25.3 19.7 191.6 Southeast 45.5 36.4 348.5 24.3 19.5 189.5 South 44.3 34.3 482.4 26.0 21.5 263.2 Southwest 45.8 30.3 426.3 24.8 17.1 227.9 West 43.3 29.0 416.1 23.5 15.8 221.2 Northwest 44.6 29.2 407.0 23.8 15.6 220.3 DENR Standard 340 260 300 180 150 230

DENR = Department of Environment and Natural Resources, NO2 = nitrogen dioxide, PM = particulate matter, SO2 = sulfur oxide, µg/Nm3= microgram. Source: SPC Power Corporation. 2005. Environmental Impact Assessment for the Proposed 2 x 100 MW Coal-Fired Thermal Power Plant Project. Naga, Cebu (October). 116. There are no other major industrial activities proposed near the project site, aside from the power plant project. There are existing major industries, such as Naga power plant and APO Cement (CEMEX), whose emissions are being quantified in the baseline ambient conditions. The predicted emissions for the Project have considered the contributions from these plants and levels remain within national limits. 117. Although it is difficult to predict the potential cumulative impact on the project area, the air and water qualities are not likely to be significantly worse than current levels if the existing Naga power plant and the proposed KSPC power plant operate at the same time. The existing Naga power plant may be forced to decommission and/ or rehabilitate because of the regulatory regime change and competitive efficiency of the new plant. This would create a cleaner environment because of the overall emission and/ or discharge reduction. However, it is assumed that APO Cement (CEMEX) will continue to operate as a major source of air pollutants in the area. In any case, KSPC has committed to the well-being of the community by allocating PhP 240,000 per year for social development plan, which will include community health programs such as free medical checkups and clinics. F. Impacts of Associated Facilities

118. Transmission Lines and New Naga Substation. The transmission lines to be constructed will not cause any significant impact because the total distance will be about 1 km

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from the new power plant to the substation. Some residential areas and private landowners that will be affected have been dealt in accordance with Philippine regulations and ADB involuntary resettlement policy by KSPC and TransCo. No environmentally sensitive areas will be crossed during construction of the transmission lines.

VII. ECONOMIC ASSESSMENT

A. Project Costs

119. Financial Cost. The annual operating and maintenance cost is estimated to be $20.45 million in 2011 prices. 120. Environmental Cost. The environmental cost of the Project primarily relates to the (i) use of about 45,000 m3/hr of seawater for desalination to be used for cooling water, service, and domestic water supply; (ii) discharge of flue gas to the atmosphere; (iii) discharge of heated water and wastewater to the sea; and (iv) disposal of ash. These environmental costs associated with water supply, discharge of effluent, and air pollution are difficult to quantify. However, the environmental cost for monitoring and compliance activities is in Table 13.

Table 13: Estimated Annual Cost of Environmental Management and Related Activities

(US $)

Item Estimated Cost Environmental Management Team Staff 100,000 In-House Environmental Monitoring (CEMS, AAQMS, water quality) 100,000 Third Party Environmental Monitoring 40,000 Environmental Management and Continuous Education for Staff of KSPC

Environment Department 5,000

Environmental Monitoring Fund for Multipartite Monitoring Team and Environmental Guarantee Fund

15,000

Permits and Licenses 20,000

Compliance with Environmental Regulations 20,000 Total 300,000

AAQMS = Ambient Air Quality Monitoring System, CEMS = Continuous Emission Monitoring System , KSPC = KEPCO SPC

Source: KSPC Chemist and Environment Department.

B. Project Socioeconomic Benefits 121. The primary economic benefit of the Project will be the generation of 1,489 gigawatt-hours (GWh) of electricity per annum (4.08 GWh per day). The generated power will be used to cope up with the increasing power demand of the Visayas grid, which is essential for the growing economy. Other socioeconomic benefits of the Project will include (i) employment; (ii) payment of income tax to the local government unit; (iii) indirect taxes during construction; (iv) social development programs with the local community; and (v) ER 1-94 funding, which states that for every kilowatt-hour of electricity generated, P0.01 will be allocated for this fund—intended for the development of the host community.

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VIII. ENVIRONMENTAL MANAGEMENT PLAN

A. Objectives and Scope of Environmental Management 122. To ensure that the ecological balance and environmental safety are preserved during construction until plant operations, an EMP (Appendix 3) will be established. Any adverse effect on the environment could be controlled if it is averted at an early stage and necessary mitigating measures are applied. The main objective of the EMP is to minimize the direct and indirect negative environmental impacts of the Project through sound planning and the introduction of proper construction and monitoring techniques during all phases of project implementation. To ensure that proper designs and operational standards are adhered to, and that the environment and public safety are not compromised, site practices and procedures of the EMP should be followed strictly throughout the lifetime of the Project. B. Organization for Project Environmental Management 123. KSPC will establish a chemist and environment department in line with its environmental policy. The environment department will lead and promote the environmental management of the Project during construction and plant operation. This department will be headed by an experienced manager and will be supported by adequate staff such as environmental and chemical engineers, chemists, and pollution control specialists. The department will coordinate closely with the operations and maintenance group for the smooth maneuver of the plant. Personnel from the environment department will have appropriate training and education to ensure that they have the proper knowledge and skills to handle environmental management programs. Figure 2 contains the organization chart. 124. KSPC will establish an environmental management system, led and monitored by its environmental department, with 3 staff and 1 management level positions. The Project will comply with all the relevant local laws and regulations regarding environmental protection. C. Mitigation Measures 125. The EMP consolidates the potential environmental issues in a thermal power plant project, which include the following: (i) air emissions and noise, (ii) water consumption, (iii) marine habitat alteration, (iv) effluents, (v) solid and hazardous waste, (vi) energy efficiency and (vii) greenhouse gases and its mitigating measures to be implemented during the construction and operations stage. Implementing and monitoring responsibilities are also identified (Appendix 3). 126. KSPC will ensure that all mitigating measures will be included in bidding documents and supply and construction contracts. KSPC will ensure that a full EMP is prepared for the project construction and operation. The chemist and environment department will be responsible for implementing the EMP and updating it periodically during construction.

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Figure 2: KSPC Organizational Chart

Boiler Dep’t

- Dep’t manager

- Lead engineer

- Engineer

- Technician

Turbine Dep’t

- Dept manager

- Lead engineer

- Engineer

- Technician

Electrical Dep’t

- Dep’t manager

- Lead engineer

- Engineer

- Technician

I&C Dep’t

- Dep’t manager

- Lead engineer

- Engineer

- Technician

Operation Dep’t

- Dep’t manager

- Shift assistant manager

- Shift operator

Performance Dep’t

- Dep’t manager

- Lead engineer

- Engineer

Chemist & Environment

Dep’t

- Dep’t manager

- Lead engineer

- Engineer

- Shift operator

Personnel & General Affairs

Dep’t

- Dep’t manager

- P&G officer

Procurement & Account

Dep’t

- Dep’t manager

- P&A officer

Material Management Dep’t

- Dep’t manager

- Officer

- Engineer

Market Analysis Dep’t - Dep’t manager

- Engineer

- Officer

- Quality - Safety

Maintenance Group - Group Manager

Administration Group - Group Manager

Operation Group - Group Manager

Plant Manager

Dep't = department, I & C = Instrumentation and Control, P & A = Procurement and Account, P & G = Personal and General. Source: KSPC Chemist and Environment Department. D. Monitoring and Evaluation Program 127. Online monitoring for flue gas, ambient air, and wastewater quality will be provided for the plant operations to facilitate real-time monitoring. Flue gas will be continuously monitored by the continuous emission monitoring system for the following parameters: SO2, NOx, O2, CO, dust content, temperature, and flow measurement. Ambient air quality monitoring systems will also be installed to monitor noise levels, SOx, NOx, and dust content in the immediate vicinity of the plant. Wastewater quality will be monitored continuously. 128. Aside from continuous in-house monitoring, periodic and manual monitoring will be conducted by a third party—a laboratory duly accredited by DENR. Flue gas, ambient air,

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wastewater, and marine water will be monitored at least on a quarterly basis. Marine and aquatic life monitoring will be carried out on a semiannual basis and an environmental audit will take place annually—conducted by a third party accredited by DENR. The results of this monitoring will be included in reports to be submitted to DENR. 129. During project implementation, a multipartite monitoring team will be established, composed of officials of relevant government agencies, contractor, consultants, and local government units. The team will be responsible for overseeing implementation of the monitoring program to ensure that ecological balance and environmental safety is preserved and that any adverse effect on the environment may be controlled if it is averted in the early stages and mitigating measures are applied. 130. KSPC has allocated an environmental monitoring fund of PhP 250,000 per year for multipartite monitoring team operations, covering expenses for training team members and honoraria. In addition, an environmental guarantee fund of PhP 450,000 will be replenished whenever utilized. 131. The total investment cost for the pollution control and monitoring facilities is estimated at $17 million. The annual cost of operating and maintaining these facilities is estimated at $2 million. The estimated annual cost of the environmental management and related activities is summarized in Table 12.

E. Social Development Plan

132. The social development plan incorporates the proposed interventions of KSPC in favor of the various project stakeholders. As part of its corporate social responsibility, KSPC aims to promote the stakeholders, especially directly affected residents, to become partners of development. As an active player in society, KSPC seeks to improve residents’ standard of living through various programs that will enhance their potentials. Table 14 presents the different activities and their projected budget cost.

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Table 14: Social Development Plan (PhP)

Projects/Activities Frequency Budget

Proposal Subtotal

(Annual) 1. Health and Sanitation and Nutrition

a. Medical/Dental mission

b. “Operation Tuli” (circumcision)

c. Deworming of Children

d. Health/Nutrition education of residents

e. Upgrading/improvement of rural health centers/facilities

Quarterly

Annually

(during summer)

Semiannually

Annually

Annually

10,000/quarter

20,000

10,000/ semiannually

10,000

20,000

40,000

20,000

20,000

10,000

20,000

2. Education a. Textbook and educational materials

donation for public school children

b. Scholarship assistance to deserving students

c. Literacy and skill training

d. Upgrading/Repair of school facilities

Annually

Annually

Annually

Annually

20,000

20,000

20,000

20,000

20,000

20,000

20,000

20,000

3. Donation in support of local government units’ community program

Annually 50,000 50,000

Total 240,000 Source: KSPC Chemist and Environment Department.

F. Emergency Response Plan and Disaster Preparedness Program 133. This program will provide a general system, designed to facilitate appropriate actions in response to emergencies during the construction and operation phase of the Project. Planning for emergencies is an important part of the safety of the all personnel and the environment. A general plan will be organized to address every possible emergency. The organization of a committee, represented by every functional group, will provide services during emergencies. First aid and evacuation procedures will be provided whenever there is a serious accident. Emergency drills and training will be performed to make personnel aware and alert when an actual emergency occurs. G. Ash Utilization Plan

134. Ash will be generated at a rate of 250 tons/day, comprising 200 tons/day of fly ash and 50 tons/day of bed ash. KSPC plans to recycle all ashes to a cement manufacturer as one of its raw materials. The fly ash and bottom ash produced during operations will be collected in dry form and transported to a nearby cement plant for reuse. An emergency ash pond will be constructed during cement factory shutdown, natural calamities, etc.

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IX. PUBLIC CONSULTATION AND DISCLOSURE 135. The community and various stakeholders were consulted in various venues for participation in the study. These consultations include informal interviews in the form of community meetings and/or focus group discussions and public consultations. Residents were given the opportunity to discuss the possible environmental and social impacts of the proposed Project. 136. The first level scoping meeting was conducted on 15 October 2004 in Quezon City, and attended by the DENR representative, EIA review committee members, EIA consultant, and KSPC proponent. Highlights of the scoping included the requirement for a comprehensive marine survey, further discussion on the geologic foundation of the reclaimed area, and the associated risk of failure of engineering design in the reclaimed area. The second level scoping was conducted on 6 November 2004 in Naga, Cebu. It was attended by 95 participants from the local government unit, representatives of civic organizations, nongovernment agencies, some concerned residents, and KSPC. The major issue discussed was plant emissions—including air, water, noise, and hazardous materials, which were thoroughly addressed by the KSPC. 137. A public hearing was held in Naga on 6 August 2005. It was well attended by more than 200 people from different sectors of the community, including representatives of the DENR Environmental Management Bureau from the national and regional office. It was chaired by the EIA division head, supported by the regional environmental management bureau. The main concerns discussed included the potential environmental and social impacts of the Project—including noise level elevation, air pollution, reliability of the technology, and waste generation. KSPC stated that operation of heavy equipment and other facilities would be limited during daytime and that they will be properly maintained to reduce noise emissions. The adoption of CFBC technology, together with the installation of highly efficient EPs and tall smoke stacks, will mitigate air pollution issues. CFBC technology is a proven technology with 1,300 units operating worldwide. SOx generation will be minimized because of the injection of limestone, and NOx emission will be significantly reduced because of the low firing temperature of 750°C–900°C. The volume of wastewater generated is expected to be low because it will reuse for the dust suppression system. The ash produced by the plant will be utilized by a nearby cement plant, and an emergency ash pond will be constructed in case of problems in the cement plant. 138. Local government officials from city and barangay levels have already shown their support to the Project through issuance of official endorsements such as (i) Resolution No. 04 Series of 2005 from the Office of the Barangay Captain Hon. Glenn Roderick A. Saya-ang dated 13 April 2005, (ii) Resolution No. 008-A-2005 from the Office of the Municipal Mayor Hon. Ferdinand M. Chiong dated 3 March 2005, and (iii) Resolution No. 015-S2005 from the League of Municipalities of the Philippines (LMP) dated 17 February 2005 signed by Hon. Ronal Allan G. Cesante, LMP-Cebu President.

X. CONCLUSIONS 139. To address power shortage in the Visayas grid, KEPCO–SPC Power Corporation will construct a 200 MW coal-fired power plant utilizing the latest clean coal CFBC technology. This technology reduces the production of unwanted air pollutants such as SOx and NOx because of the injection of limestone for sulfur capture and low firing temperature, which inhibits the production of NOx. The emission criteria of this plant will be within the limits set by the World Bank and Philippine DENR standards.

35

140. Coal-fired thermal power plants are the most cost-effective form of baseload power plant to be located in Naga, province of Cebu. The plant will be located in front of an existing power plant operated by SPC Power Corporation. It will construct a desalination plant for its freshwater requirements so that it does not compete with the local community’s water table supply. Ash produced during operations will be collected in dry form and will be transported to a nearby cement manufacturing plant as raw material. 141. The Project has helped the resettlement of informal dwellers who were utilizing the area of the previously utilized ash pond. This has been done in close coordination with the local government and the rightful owner of the land (NPC). Employment opportunities will increase in the area, especially during the construction stage which will require about 500–1,000 workers. In addition, a social development plan will be initiated and implemented to promote the working relationship of KSPC and the nearby community. Public consultation has been undertaken and the Project has received support from various local government offices and agencies. 142. The proposed KSPC power plant, by adopting CFBC technologies and other emission and pollution control measures, does not expect to create significant environmental impacts. An adequate EMP, including monitoring program, has been prepared and committed to by KSPC for implementation, with specific budget and staff resources allocated. This includes air emission, water quality, land use, ecological resources, and social aspects. An accredited third party laboratory will be engaged to conduct monitoring activities of the plant operations. No endangered species or protected areas are found in the project area. The Project anticipates improving the environment of the project area once the existing Naga power plant, goes off-line, which is likely to occur in the near future due to the regulatory regime change and its inferior efficiency.

36 Appendix 1

MAIN DESIGN AND OPERATIONAL DATA OF POWER PLANT

Item Data Power Generation Capacity 100 MW/unit Net Heat Rate at Delivery Pointa and at the conditions

of GNRC 2,488 kCal/kWh

Plant Design Concept Technology Subcritical, CFBC Number of Boiler and Steam Turbines Two units Number of Stacks One stack of 110 m height Gross Heat Rate at the conditions of MCR 1,955 kCal/kWh Fuel Firing System µg/Nm3 Main Fuel Sub-bituminous coal – 529.6 t/day

@ BMCR Start-Up and Stabilization Fuel Light oil Bed Material Limestone – 43.2 t/day @ GNRC;

Sand Water System Source Seawater Cooling System 44,700 m3/hr for once-through

cooling system Demineralized Water 528 m3/day Domestic (potable) Water (plant and offices) 35 m3/day Service Water 349 m3/day, as make-up to reuse

water system Wastewater Treatment Plant Capacity 1,080 m3/day, treated water to

reuse water system Ash Volume

‐ Fly ash 103.2 t/day ‐ Bottom ash 29.4 t/day

Power Transmission 138 kV double circuit BMCR = boiler maximum continuous rating, GNRC = guaranteed net rated capacity, hr = hour, kCal = kilocalorie, kV = kilovolt, kWh = kilowatt-hour, m = meter, m3 = cubic meter, MCR = maximum continuous rating, MW = megawatt, t = metric ton. a At high voltage side of unit transformer. Sources: EIS, October 2005; EPC contract between KSPC (Kepco SPC Power Corporation) and Doosan Heavy Industries & Construction (EPC contractor).

Appendix 2 37

MAPPING OF SAMPLING MONITORING STATIONS FOR AMBIENT AIR

38 Appendix 3

SUMMARY OF MATRIX OF ENVIRONMENTAL MANAGEMENT PLAN

Environmental Management Plan

Environmental Component

Project Activity

Potential Impact

Mitigating/ Enhancement Measures

Estimated Cost of Mitigation/

Enhancement

Responsible Institution

Supervisor or Monitor

Pre-Construction/Construction Phase

Landform/ Geology/ Geo-Hazard

Construction of access road

Leveling and regime modification

Perform selective revegetation; provide soil erosion structures; set network of drain canals

Included in contractor’s contract

Contractor Contract

Leveling, compaction, reinforcement of ash pond and basement foundation development

Ground collapse Engineering assessment and application of civil engineering methodologies


Contractor Contract

Power plant facilities construction and site development

Leveling and regime modification

Landscape development and design


Contractor Contract

Physical Environment

Weakened ground structure

Application of sound mechanical and civil engineering work/practices


Contractor Contract

Soil Construction of access road

Soil and/or silt runoff

Containment and/or construction of siltation dam(s) silt curtains; minimum vegetative removal


Contractor Contract

Drainage and treatment of toxic ooze and sludge from ash pond

Inland soil and runoff contamination of coastal waters

Collection and appropriate disposal and/or treatment of toxic waste material

O&M cost for the Project

Proponent KSPC Operational manual O&M monitoring report

Appendix 3 39



Project Activity

Potential Impact



Enhancement



Water Quality Construction of access road

Turbidity; siltation; sedimentation

Containment and/or construction of siltation damand/or silt curtains; minimum vegetative removal Proper management, handling, and disposal of spoils and unsuitable materials


Contractor Contract

Drainage and treatment of toxic ooze and sludge from ash pond and other sources

Water contamination

Collection and appropriate disposal and/or treatment of toxic


Contractor Contract


Water contamination, turbidity, siltation

Placement of temporary comfort facilities for workers; septic tanks, etc. Construction of silt ponds, diversion drains, silt curtains


Contractor Contract

Air and Noise Quality


Acute occurrence of elevated levels of TSPs, SOx, and NOx

Minimize and control dust generation Regular spraying of exposed areas


Contractor Contract

Acute elevated levels of noise

Operation of heavy equipment and appurtenant facilities will be limited during daytime If operation is required beyond daytime, proper modification and information of the concerned barangay (district) officials will be undertaken


Contractor Contract

40 Appendix 3



Project Activity

Potential Impact



Enhancement



Leveling, compaction, reinforcement of ash pond and basement foundation development


Minimize and control dust generation Regular spraying of exposed areas


Contractor Contract


Operation of heavy equipment and appurtenant facilities will be limited during daytime In case of operation beyond these hours is required, proper notification and information of the concerned barangay (district) officials will be undertaken.


Contractor Contract

Power plant facilities construction


Minimize and control dust generation Regular spraying of exposed area


Contractor Contract


Operation of heavy equipment and appurtenant facilities will be limited during daytime In case of operation beyond these hours is required, proper notification and information of the concerned barangay (district) officials will be undertaken.


Contractor Contract

Appendix 3 41



Project Activity

Potential Impact



Enhancement



Terrestrial Environment


Loss of habitat Cutting of trees and clearing of vegetative cover to be undertaken only when necessaryRelevant permits and clearances will be secured prior to cutting and clearing activities


Contractor Contract Biological Environment

Migration and/or loss of wildlife

Migration and/or Loss of wildlife

Habitat development and generation through planting of indigenous species Re-vegetation of cleared areas


Contractor Contract

Aquatic Environment


Migration; localized extinction

Runoff diversion; silt curtains; settling ponds


Contractor Contract

Drainage and treatment of toxic ooze and sludge from ash pond

Loss of habitat; localized extinction; migration

Collection and appropriate disposal and/or treatment of toxic waste


KSPC KSPC Operational manual O&M monitoring report

Power plant facilities construction

Dumping of solid waste; loading of organic waste

Proper waste disposal and management



Social Environment


Public resistance to development

Conduct IEC



42 Appendix 3



Project Activity

Potential Impact



Enhancement



Health hazards from dust emissions; construction accidents

Implement dust control management Implement road and construction safety procedures Conduct IEC


Contractor Contract


Public resistance to development

Conduct IEC



Health hazards from dust emissions; construction accidents

Conduct IEC



Job opportunities and local employment

Preference given to qualified local residents


Contractor Contract

Operational Phase

Physical Environment

Landform/ Geology/ Geo-Hazard

Plant operation Soil contamination from oil spills and leaks

Proper oil and fuel handling procedures, placement of containment bunds around fuel and oil storage tanks



Appendix 3 43



Project Activity

Potential Impact



Enhancement



Water Quality and Quantity

Freshwater extraction

Lowering of water table; saline water intrusion

Fresh water will be sourced mainly from desalination of seawater Groundwater sources will be utilized intermittently to reduce O&M cost of reverse osmosis.



Plant operation Discharge of heated water

Appropriate cooling technologies (i.e., use of seawater as cooling water) will be employed to reduce temperature or effluents before release to receiving body of water



Wastewater generation from facilities use and maintenance

Construction and maintenance of wastewater treatment facility



Water contamination from fuel and/or oil leaks and spillage

Proper safety and handling of fuel and/or oil storage areas and motor pool



Air and Noise Quality

Plant operation Increased levels of TSP,NOx and SOx

Installation and maintenance of electrostatic precipitators and other pollution control devices



44 Appendix 3



Project Activity

Potential Impact



Enhancement



Elevated levels of noise

Establish buffers and other noise abatement measures Proper maintenance of vehicles, heavy equipment, and other machinery Use of noise abatement accessories such as mufflers



Aquatic Environment

Plant Operation Thermal effluents released into sea

Appropriate cooling technologies (i.e., use of seawater as cooling water) will be employed to reduce temperature of effluents before release to receiving body of water



Release of toxic substances like chlorine and other anti-fouling chemicals

Treatment of wastewater prior to release into the ambient



Biological Environment

Spillage from fuel and/or oil storage area

Secure storage area to avoid spillage Strict application of safety and sanitation procedures



Spillage of fuel and other substances during unloading operations

Ensure implementation of safety and sanitation procedures during unloading operations



Appendix 3 45



Project Activity

Potential Impact



Enhancement



Facilities repair and maintenance

Dumping of solid waste

Collection and appropriate disposal of solid waste



Dumping of toxic chemicals (paints, cleaning detergents)

Collection and appropriate disposal of toxic and hazardous materials



Social Environment

Plant Operation Influx of informal dwellers

Assist municipality to implement land use plan Assist barangay in implementing Urban Development and Housing Act (UDHA)


LGU Social development program

Generation of employment and livelihood opportunities

Prioritize local residents in employment Local sourcing of requirements


KSPC/ LGU Social development program

Increase LGU revenues

Prompt payment of tax dues Assist Local Government Unit in tapping funds


KSPC Social development program

Air pollution Adoption of CFBC technology Install antipollution device Reforestation Health monitoring and medical missions



46 Appendix 3



Project Activity

Potential Impact



Enhancement



Noise pollution Installation of buffers and mufflers Planting of trees and shrubs Health monitoring and medical mission



Diminishing fish catch

Provide assistance to local FARMC in drive against illegal activities and rehabilitation of marine resources Provide alternative livelihood sources


KSPC LGU Social development program

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