DOE sees building of new 600-MW plant next year
Wednesday, December 27, 2006
By MYRNA M. VELASCO
The Department of Energy (DoE) has committed to buck the odds of forecast supply shortfall as it indicated that the construction of a greenfield or new power plant of 600 megawatt capacity is expected to start next year.
Energy Secretary Raphael P.M. Lotilla generally described the climate for investments in the Philippine power industry as improving; and this is expected to stimulate interests from investors to pour in capital for either new power projects and on brownfield or expansion opportunities.
As the implementation of policy reforms are now moving, albeit gradually, the energy chief stressed that "we are now reaping the benefits of better investment climate."
Pending financial closing and other processes on securing permits that the investors would still need to work on, Lotilla said he prefers to conceal yet the identity of these companies. But he assured that the indications of investment plans are now firmer than before.
He hinted the greenfield capacity could be a coal-fired facility and will be sited in the southern part of Luzon.
Apart from that commitment, he said there are various prospects for capacity expansion which may include that of the Ilijan natural gas-fired facility and the plan of the acquiring companies of the Sual and Pagbilao coalfired power facilities.
He said Tokyo Electric Power Company (TEPCO) and Marubeni Corporation, which bought the equity interests of Mirant Corporation in the Philippines are keen on expanding the coal facilities, primarily Pagbilao.
Luzon grid is not the only area where interests are being lured, the energy chief averred, as he hinted that there are companies already looking for rehabilitation of some units of the Agus hydropower complex in Mindanao.
The other project generating interest from investors is the planned Agus 3 facility; though this is still saddled with land ownership claims.
The revised forecast of the Department of Energy (DoE) sets the close of demand-supply gap in the biggest island grid of Luzon by 2011. If the capacity additions will start construction this 2007, this would still allow time for the 3-5 year gestation period for baseload power capacities.
While investors still see the Philippines as a "high risk" market, they can see prospects of business expansions because of the inevitable supply shortfall in 3 to 4 years time.
There have been recurrent problems that plagued the industry in the last five years; such as judicial intervention and the lack of confidence for merchantbased power facilities.
Lately, however, the industry has seen some glimmers of hope after the Supreme Court handed down a ruling on Manila Electric Company’s (Meralco) unbundled rate that effectively recognizes the power of the Energy Regulatory Commission (ERC) over regulatory matters and tariff-setting activities for the power industry.
The commercial operation of the Wholesale Electricity Spot Market, despite the birth pains it is still going through, has also provided an alternative market for forthcoming power capacity that can no longer be absorbed by state-owned National Power Corporation (NPC) or the distribution utilities. (MMV)
posted by philpower @ 8:20 AM,
