Napocor to use coconut fuel to run its power plantsBusinessWorld (Philippines) 7/18/2001- DAVAO CITY - The National PowerCorp. (Napocor) will soon be buying fuel from the coconut industry.This was what Napocor president Jesus Alcordo told the Mindanao BusinessCouncil (MBC) through a recent letter.Initial purchase, however, will be limited to a few plants, he said in theletter. The power firm is also assessing the cost efficiency should itincrease the use of coconut products as power plant fuel.Last February, MBC members drafted a resolution submitted to PresidentGloria Macapagal-Arroyo for the state power firm to explore ways to usecoconut oil as fuel.Coconut industry leaders on the island have been complaining of mountinglosses due to the low price of vegetable oil and copra in theinternational markets.Copra prices were tracked at around P13 per kilo in 1999. In February thisyear, copra price dropped to below P5 per kilo at farm gate. Recent futureprices, however, show signs of recovery.Using the port of Rotterdam in Netherlands as reference, coconut oilSeptember deliveries were quoted at $335 per ton inclusive of cost,insurance and freight.Deliveries in January this year at the same port were at $315 per ton.Mr. Alcordo said initial studies done by Napocor show that coconut oil(CNO) and coco methyl ester (CME) could be used as fuel substitutes."However, despite the outcome of our study, we have agreed with theDepartment of Agriculture (DA), to proceed with the demonstration testingon the use of CNO and CME in select power plants," Mr. Alcordo said in theletter.He added that Napocor has proposed to the DA the creation of aninteragency task force that will formulate the methodology in conductingthe tests in selected power plants.Mr. Alcordo pointed out that "using CNO and CME is not yet economicallyviable, at the moment, due to higher prices compared with fuel oil anddiesel."The state power firm is a heavy dollar user because of its bulk purchasesof imported fuel to run its power plants.Based on data from the National Statistics Office, Mindanao has 1.6million hectares planted to coconut. This comprises roughly 51% of thetotal area planted to this commodity. The island also supplies roughly 60%of the 12 million tons of coconut the country produces annually.Due to depressed prices of coconut products in the international marketand low productivity of coconut farms, a section of the island'sagribusiness sector has recently recommended the promotion of oil palmfarming.Oil palm is a direct competitor of coconut in the international market.Based on initial reports, at least 300,000 hectares of lands on the islandare suitable to oil palm trees.