Meralco PowerGen president and chief executive officer Rogelio Singson
The Manila Electric Co. (Meralco) is back in the power business through a subsidiary. However, it is going through legal hurdles to get its projects going in Luzon that now contends with low energy reserves.
Meralco PowerGen president and chief executive officer Rogelio Singson said the company’s 1,200-megawatt (MW) coal-powered Atimonan plant project in Quezon, which cost P150 billion, is woefully delayed and mired in a legal battle.
Meralco PowerGen unit Atimonan One Energy Corp. (A1E) is putting up the coal project and has signed a power supply agreement with Meralco.
The National Grid Corporation of the Philippines placed Luzon under yellow alert yesterday due to a dangerously low reserve power that the Meralco Powergen project seeks to address.
Civil society groups have filed a case with the Ombudsman and the Supreme Court to halt the project while also calling on the Energy Regulatory Commission (ERC) to reject applications filed by the Meralco for power supply agreements (PSA) on coal-fired power plants which they tagged as costly and dirty.
DoE certification
The Department of Energy (DoE) recently certified the 1,200-MW plant as nationally significant, thus awarding it a certificate of Energy Project of National Significance (EPNS).
Under Executive Order (EO) 30, which was signed by President Rodrigo Duterte, projects declared as EPNS should be acted upon within a 30-day period.
EO 30 aims to prioritize projects identified as EPNS to avoid unnecessary delays in the implementation of the government’s Philippine Energy Plan.
The construction of A1E’s power plant will provide the country with a highly efficient base load supply. The first 600 MW is scheduled to be completed by 2023 while the second unit is projected to be completed by the first quarter of 2024.
“The A1E PSA was legally filed in accordance with the rules and regulations of ERC. It was subjected to very stringent evaluation process and scrutiny by many consumer groups,” Singson said before yesterday’s Straight Talk with Daily Tribune.
He added the project underwent many public hearings in compliance with legal and regulatory requirements.
“This was done to ensure adequate and reliable power supply at least cost to Meralco’s customers. Thus, we find strong merit in positively acting on this agreement,” he said.
Hot seat Daily Tribune Business Editor Jun Vallecera raises energy concerns to Meralco PowerGen President Rogelio Singson as Metro Manila experiences thinning electricity reserves with the onset of summer when the use of air-conditioners increases. ROY PELOVELLO
Supply runs short
The DoE deemed the project critical since the country needs an additional supply of 14,000 MW by 2025 while building a key power source requires at least two to three years.
Without the project or it being held up, by 2021 to 2022, the DoE expects power supply to be critical.
Singson said the ultra-supercritical coal-fired power plant is the most fuel efficient among coal plants and it could usher in next-generation coal facilities.
Meralco PowerGen, however, has not proceeded with actual construction. Singson said the legal impediments need to be settled first.
While Meralco PowerGen is now focused on renewable energy sources, the Atimonan plant and the smaller 455 MW San Buenaventura plant was meant for baseload supply, he said.
Singson added a last option for the company is to build the plant as a merchant facility.
“We will have difficulty in financing more than anything else because the banks wanted to see a power supply agreement,” he said.
He added further delays in project construction would raise the interest cost of the financing for the project. At an interest rate of three percent, the company shells out P2 billion annually for the Atimonan plant loan.
Singson said the project cost was also affected by the peso devaluation.
“Exchange rate at the time we filed (was) P46-48, now its P53-P54 (to the dollar),” he added.
Source: https://tribune.net.ph/index.php/2019/03/08/plant-tied-up-power-runs-short/