Meralco names builder of Subic plant

Manila Electric Co. (Meralco) said Redondo Peninsula Energy Inc. (RP Energy) consortium has signed a construction contract with Azul Torre Construction Inc. and a supply contract with Doosan Heavy Industries & Construction Co. Ltd. for the construction of the 600 megawatts (MW) coal-fired power plant it is developing in Subic.

RP Energy which is currently composed of Therma Power, Inc., a subsidiary of Aboitiz Power Corp. and Taiwan Cogeneration International Corp. each owns 25 percent equity interest while Meralco PowerGen Corp. (MGen), a subsidiary of Meralco holds 47 percent equity interest in the plant projected to go online by mid-2020.

Construction of the Subic coal plant estimated to cost $1.2 billion was halted when a Writ of Kalikasan was filed against it in 2012 but which was later junked by the Supreme Court (SC) for insufficiency of evidence.

Meralco also recently filed a power supply agreement application with the Energy Regulatory Commission to draw 225 MW from RP Energy once it is completed but is still pending for a decision.

Aside from RP Energy, other coal plant developments where MGen is involved in include the 455 MW San Buenaventura project and the 1,200 MW Atimonan both located in the Quezon province. (Malaya Business Insight)

PHOTO:
Artist's rendition of the power plant located at the REdondo Peninsula. RP Energy is building a $1.2Bn 600MW power plant within the Subic Bay Freeport Zone (SBFZ) using circulating-fluidized-bed technology.

http://www.malaya.com.ph/business-news/business/meralco-names-builder-subic-plant

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BoI approves Subic power plant

Redondo Peninsula Energy Inc., led by Meralco PowerGen Corp., received a certificate of registration from the Board of Investments for its 600-megawatt coal-fired power plant in Subic, Zambales costing P63 billion.

“The registration entitles RPE to duty-free importation of equipment, materials and spares used for the power plant for a period of five years from date of registration. Also income tax holiday for four years from commercial operation,” RP Energy project development manager Joselito Lantin said Friday.

Lantin said RP Energy would build the project in phases. The company is currently negotiating for the engineering, procurement and construction contract covering the first 300-MW phase of the project.

He said the EPC contract would include an option for a second 300-MW unit.

“Targeted to start construction for phase one is fourth quarter 2016. Expected commercial operation is late 2019/early 2020,” Lantin said in a recent briefing.

Electricity generated by the project is covered under a separate power supply agreement with Manila Electric Co. accounting for 225 MW and Aboitiz Energy Solutions contracting 75 MW.

The company signed an amendment to the power plant site lease and transmission line right-of-way lease agreements with the Subic Bay Metropolitan Authority in February.

“We will do 300 MW and then [expand to] 600 MW, depending on our capability to interconnect with NGCP [National Grid Corporation of the Philippines]. It just takes a few months before you can start the phase two,” Meralco PowerGen chairman Manuel Pangilinan said earlier.

Meralco PowerGen is the power generation arm of Meralco, the country’s biggest power distributor, and owns a majority stake in RP Energy. (Alena Mae S. Flores, Manila Standard)

Full story: http://thestandard.com.ph/business/211878/boi-approves-subic-coal-plant.html

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Redondo Peninsula to stagger construction of Subic power plant

MANILA, Philippines – Redondo Peninsula Energy Inc. (RP Energy) will phase the construction of its 600-megawatt (MW) coal-fired power plant in Subic pending the resolution of its transmission problems.

RP Energy is a consortium composed of Meralco Power Gen (MGen), Aboitiz Power Corp. and Taiwan Cogeneration International Corp.

The consortium has been evaluating whether to push through with the whole 600 MW in one go or to phase it due to issues in the capacity transmission facilities.

When asked for updates on the project, Meralco chairman Manuel V. Pangilinan said “the latest word is that we might phase it.”

“(We will start with) 300-MW first and then (another 300 MW) to 600-MW, depending on our capability to interconnect with NGCP (National Grid Corp. of the Philippines). If that takes a few months, then it’s just a few months before we can start the Phase 2,” Pangilinan said.

Construction of the 600-MW coal-fired power plant is targeted in the first quarter of this year and completion in the second half of 2019. (Danessa Rivera, The Philippine Star)

http://www.philstar.com/business/2016/03/03/1558805/redondo-peninsula-stagger-construction-subic-power-plant

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Power firm in Subic Bay gives new boat to school

SUBIC, ZAMBALES - Amidst the bustling freeport zone is a fishing community situated in Sitio Kinabuksan, Barangay Cawag in Subic. Every day, around 100 students walk a rocky trail by the beach from Sitio Nagbayukan to attend class at Kinabuksan Integrated School - the only public school in the area accessible to them.

“When it is high tide, they have to trek at least 40 minutes in the dangerous trail going to school. Sometimes, they just ask for a free boat ride from the fishermen but oftentimes they need to walk. It gets worse during the rainy season,” said Dr. Rod Raguine, school principal of Kinabukasan Integrated School.

Faculty members who live in Subic town proper take the hour-long daily commute to the school, which costs around 50 pesos per head every day -- an unwelcome expense in their limited monthly budget.

In response to these concerns, Redondo Peninsula Energy, Inc. (RP Energy) initiated a boat project that will benefit the school’s stakeholders. The boat was turned over to Kinabuksan Integrated School in a ceremony held on February 22.

The boat project is part of RP Energy’s Corporate Social Responsibility Program for Education, which was launched in 2013 in order to address the transportation problems of students and teachers in coastal areas such as Subic, Zambales.

Victor Chan, RP Energy Head for External Affairs said addressing the transportation challenges of students and teachers in Sitio Kinabuksan is just a part of the solution in addressing the problems of our public education system in grassroot communities.

"By providing the students and teachers with a boat, we will be able to provide them with a safe means to reach their school. Students will have more time to study since their travel time will be shorter, thus, improving their scholastic performance. As for the teachers, they will have more time with their families and they will be able to save more, which can greatly contribute in their daily budget,” Chan said.

Gemma Pilapil, Vice President of the school’s Parent-Teacher Association (PTA), expressed gratitude for the support from RP Energy and promised to take care of this gift.

As their contribution, the PTA provided the new anchor for the boat. The school and the PTA will be working together for the operations and maintenance of the vehicle.

Besides transporting the students, the boat will also be used by the school’s Fishery course, which is part of their K-12 curriculum.

“Our goal is to be the catalyst for development in our host communities. Aside from providing a competitive and reliable energy source, this is our way of walking the talk when we say inclusive growth. We are enjoining our fellow freeport locators to partner with us and the SBMA (Subic Bay Metropolitan Authority) in order to synergize our efforts in helping our neighboring communities grow,” Mr. Chan added.

“RP Energy believes that education is the best way to empower communities. Through RP Energy’s ‘Project Bangka,’ we are hoping to contribute in improving the education performance of the students in order for them to get a better future,” said Meralco PowerGen Vice-President for External Affairs Litz Santana. (SNL)

PHOTOS:

[1] Boat donated by RP Energy to Kinabuksan Integrated School

[2] DREAMS AFLOAT. Parent-Teacher Association Vice-President Gemma Pilapil, (1st from left); Principal Dr. Rod Raguine (4th from left); Meralco PowerGen Vice-President for External Affairs Litz Santana; RP Energy External Affairs Head Victor Chan; RP Energy CSR Officer Jason Gavina; with teachers and students of Kinabuksan Integrated School.

[3] THANK YOU. Grade school pupils with their paper boats. SBMA Public Relations Officer Malou Dungog with RP Energy External Affairs Head Victor Chan.

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RP Energy cuts Subic power plant capacity target to 300 MW

THE Redondo Peninsula (RP) Energy Inc. is lowering by half the target capacity of its newest coal-fired power plant at the Subic Bay Freeport Zone in Zambales.

The consortium is set to change the project parameters to reduce the capacity from 600 megawatts (MW) to 300 MW, Meralco Chairman Manuel V. Pangilinan said.

RP Energy is a joint venture of Meralco PowerGen Corp., Aboitiz Power Corp., and Taiwan Cogeneration International Corp.
Pangilinan attributed the changes to the issues surrounding the transmission line connection.

“There were issues on the distance of the connection of the transmission line to the grid,” Pangilinan told reporters.

He explained that the transmission line from the power plant to the grid will have to go through areas that are apparently occupied by indigenous people.

“There are pockets where there are reserved areas. So you know we cannot build on top of that. That’s prohibited by law,” he said.

The project was originally conceived as 600 MW power facility, composed of two 300 MW coal­fired plant.

Its construction was delayed because of the Writ of Kalikasan filed before the Supreme Court (SC) by groups opposing the power plant.

The High Court upheld the project’s environmental compliance certificate, as well as the lease and development agreement with the Subic Bay Metropolitan Authority.

The project is now in the construction phase after the consortium has hired the engineering, procurement and construction contractor.
The consortium has tapped a group of local banks to help finance the project. The power plant is expected to contribute additional generating capacity to the Luzon grid. (Ritchie A. Horario, The Manila Times)

http://www.manilatimes.net/rp-energy-cuts-subic-power-plant-capacity-target-to-300-mw/195801/

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SBMA to resume talks with consortium for Subic coal-fired power plant

Negotiations between the Subic Bay Metropolitan Authority and RP Energy for a 600-megawatt coal-fired power plant will resume soon after the Supreme Court upheld the validity of the environmental compliance certificate issued by the Department of Environment and Natural Resources to the Aboitiz-led consortium.

However, local government officials and an independent group of Subic Freeport locators vowed to press their opposition to the coal-fired plant despite the ruling of the high court, which also denied a petition for a writ of kalikasan against the power plant’s construction.

SBMA Chairman Roberto V. Garcia said they had been locked in negotiations with RP Energy -- the consortium of Aboitiz Power, the Manila Electric Co. and Taiwan Cogeneration Corp. -- when they were forced to stop by the petition for the writ of kalikasan.

The first issue, said Garcia, is the lease rate.

“Under the original lease agreement, the rental was for only P1 million per year. During our last negotiations, we were able to raise that to P200 million per year,” Garcia said.

The second issue was about which environmental standard to adopt in constructing the power plant.

“Because of (the need to protect) tourism, the SBMA board’s sentiment was that we should adopt higher air quality standards, which is the World Health Organization standard,” the SBMA chair explained. “Meralco’s position, on the other hand, was only to meet the Philippine standard, just like what is being imposed on other power plants.”

“Third, there were previous MOUs (memorandums of understanding) that were signed before involving local government,” he said. “Now, under the lease agreement, these rights were distinguished. In fact they did not have rights in the first place because there were only MOUs. That is the third point that we are discussing.”

“Now that the SC has finally decided on the issue, we will now continue discussions on these issues.”

However, the Subic Bay Freeport Chamber for Health and Environment Conservation, a group of locators, believes the fight against the coal-fired power plant is not yet over.

“The reversal of the validity of documents is not to say that the SC Justices favor coal as a fuel,” the SBFCHEC said in a statement.

“We believe that the coal is a dying fuel. It is on its way out of the world stage. We believe it will be banned by the world within 10 years, and it is foolish for RP Energy, Inc. to build something that will soon be banned by the world. It is foolish for the Philippines to allow such investments,” SBFCHEC president Gregorio Magdaraog stressed.

“Two hundred years ago, coal gained prominence during the industrial revolution and has become the basis of development. But since only few coal plants were established then, the plants did little in destroying the environment,” Magdaraog explained.

“Over the years, other energy options were discovered. But the American capitalists have already heavily invested in coal and related industries. The less than one percent who owns the world also owns coal so they are bound to protect coal, despite the existence of other energy generation options. That is the political economics of the coal industry. But sooner or later, they will junk coal, but they will sell coal first,” he added.

Magdaraog predicted that, “in ten years, we will almost be independent from Meralco for power supply because of other options like solar power.”

“If that is so, why should we embrace coal?” he asked. (Ansbert B. Joaquin, InterAksyon.com)

http://www.interaksyon.com/business/104510/sbma-to-resume-talks-with-consortium-for-subic-coal-fired-power-plant

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SC clears way for long-delayed Subic plant

THE SUPREME COURT finally cleared the way for a Meralco-led consortium to build its long-delayed 600-megawatt coal-fired power plant in Subic, Zambales.

In en banc session on Tuesday, justices voted 13-0 to uphold the validity of the coal power project of Redondo Peninsula Energy, Inc. (RP Energy) in Barangay Cawag.

The ruling upheld the validity of the environmental compliance certificates issued by the Department of Environment and Natural Resources (DENR) on December 2008 and July 2010. It also upheld the validity of the June 2010 Lease and Development Agreement with the Subic Bay Metropolitan Authority (SBMA).

Associate Justices Estela M. Perlas-Bernabe and Mario Victor “Marvic” F. Leonen voted in favor of RP Energy, but with qualifications, Supreme Court Public Information Office (PIO) Chief Theodore O. Te said in a briefing.

The high court also unanimously voted to deny the petition for writ of kalikasan filed by former Bayan Muna Rep. Teodoro A. Casiño and other individuals, as well as the organizations Advocates for Wildlife and Environment Protection, Wildlife in Need, Subic-Olongapo Cancer Foundation, Inc., and PAMALAKAYA (National Federation of Small Fisherfolk Organization in the Philippines).

Associate Justices Arturo D. Brion and Francis H. Jardeleza took no part in the voting, with the former being on leave and the latter inhibiting due to his previous involvement as Solicitor-General.

A full copy of the decision has yet to be issued.

The decision reversed the January 2013 ruling by the Court of Appeals invalidating the project’s amended environment compliance certificate (ECC) due to RP Energy’s failure to conduct a new environmental impact assessment.

The appellate court’s earlier decision was also based on the supposed lack of consent from the local government and the National Commission on Indigenous Peoples (NCIP) to support the Lease and Development Agreement with SBMA.

RP Energy is a joint venture of Meralco PowerGen Corp., Aboitiz Power Corp., and Taiwan Cogeneration International Corp..

The project was originally expected to go online by the this year’s dry season but development was halted because of the writ of kalikasan filed against the project.

The Supreme Court first released a resolution on the writ dated July 31, 2010, against Environment Secretary Ramon Jesus P. Paje, the Subic Bay Metropolitan Authority and RP Energy.

Such writs serve as a judicial remedy to protect against projects inflicting possible environmental damage that affects inhabitants.

The petitioners claimed RP Energy violated its environmental impact statement and environment compliance certificate (ECC).

The petitioners also claimed the ECC was issued without complying with the conditions of affected indigenous people and without prior approval of local government units.

While the project proponents have yet to receive their respective copies of the court’s decision, they welcomed the development saying this would help the energy industry.

“We have yet to read the decision. Assuming it’s all positive, then it’s good for the industry,” said Alfredo S. Panlilio, senior vice-president of Manila Electric Co., the parent firm of Meralco PowerGen.

Stephen G. Paradies, senior vice-president of Aboitiz Equity Ventures, Inc. (AEV), also said AboitizPower has yet to receive a formal copy of the decision.

AEV is the parent company of AboitizPower.

“We intend to pursue this project. It’s very good news,” said Mr. Paradies. (Claire-Ann M. C. Feliciano and Vince Alvic A. F. Nonato, BusinessWorld)

http://www.bworldonline.com/content.php?section=Economy&title=sc-clears-way-for-long-delayed-subic-plant&id=102060

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Meralco pushes forward reparations at Subic plant site

The Subic freeport zone is likely the final plant site for the planned 600-megawatt coal fired power facility being lead-developed by the power generation arm of Manila Electric Company (Meralco) – primarily when a pending court case on the project eventually clears up.

A document from Meralco has hinted that the Subic Bay Metropolitan Authority (SBMA) is set to ratify the Lease and Development Agreement (LDA) for the proposed plant site “to reflect additional terms.” No further details were provided.

It must be culled that the original LDA was declared invalid by the Court of Appeals (CA), alongside its ruling on a Writ of Kalikasan filed by groups opposing the project.

The petition was filed before the Supreme Court, but it was subsequently remanded to the CA for hearing on the merits of the case.

The proposed 600-megawatt power facility was initially targeted for commercial operation by 2015, and it could have placed Luzon grid on ‘safe ground’ versus the feared power interruptions especially during the high-demand months of summer.

The project is to be undertaken under corporate vehicle RP Energy. Meralco PowerGen is the majority equity holder, while its partners are Therma Power, Inc. of the Aboitiz group and Taiwan Cogeneration International Corporation.

On pre-construction activities, the Meralco document indicated that “RP Energy is proceeding with certain development activities that are not hampered by the SC proceedings.”

As of March this year, it was emphasized that “site preparation work is almost complete and RP Energy has commissioned its contractor to conduct preliminary engineering works on the power plant in order to reduce the overall construction period.”

An environmental compliance certificate (ECC) was already issued by the Department of Environment and Natural Resources (DENR) for the two blocks of 300-megawatt electricity generating units designed for the facility.

Full implementation, however, could not move forward until the legal hurdle of the pending Writ of Kalikasan is resolved by the courts.

While the appellate court has initially denied the Writ of Kalikasan petition, it conversely noted “certain deficiencies in the process of the DENR in its issuance of the original ECC for the 300MW coal-fired plant” which has also affected the LDA for the project site. (Myrna Velasco, Manila Bulletin)

http://www.mb.com.ph/meralco-pushes-forward-reparations-at-subic-plant-site/

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Power supply a challenge to investors

Power outages across the Philippines amid shutdowns at electricity plants and increasing summer demand are raising concern the country’s stunted generation capacity will stifle investment and economic growth.

Two of the Philippines’ three main islands are on “Red Alert” after supply fell below peak demand this week as aging facilities shut for repairs and temperatures rise to near 40 degrees Celsius (104 Fahrenheit). Delays in building new plants may slow the expansion of Asia’s second-fastest growing economy, according to Erramon Aboitiz, president of Aboitiz Power Corp., the nation’s second-largest utility.

“It’s time to worry,” Aboitiz said in an interview at the ASEAN Finance Ministers investor seminar in Manila on May 20. “Investors are always forward-looking and when they see projections of a potential power problem, they’ll decide to put their investments somewhere else.”

The strain this summer on power plants highlights how the Philippines’ under-performing electricity sector threatens the country’s economic growth, which is second only to China in the Asia-Pacific. Gross domestic product rose 7.2 percent in 2013 and is poised to remain among the world’s five fastest-expanding until 2016, according to economists surveyed by Bloomberg.

As the economy expands, so has the country’s demand for electricity. Consumption jumped 50 percent in the 10 years to 2012, more than three times the 16 percent growth rate over that same period for the nation’s generating capacity, according to government data.

Some new projects are being delayed because of environmental concerns, such as Aboitiz Power and Manila Electric Co.’s 600-megawatt coal-fired power plant at the Subic Freeport zone north of the capital, which was blocked by a court order. The companies in July 2011 said the first 300 megawatts of the plant will be available by 2014.

“The power crisis is going to be costly,” Ronald Mendoza, executive director of the Asian Institute of Management Policy Center in Manila, said in a telephone interview yesterday. “It will affect manufacturing and services, so there will be implications on production. Investors may scale back or delay investments.”

With peak power demand forecast to grow about 4 percent annually until 2030, the country will need more than 13,000 megawatts of additional capacity, or 80 percent more than what’s installed, according to Department of Energy data. The government estimates that will require 2.8 trillion pesos ($64 billion) of investment. About 1,800 megawatts of new generation has been committed so far.

The central Visayas region, home to the famous beaches of Boracay island, had zero power reserves yesterday. The southern Mindanao region is on a reserve deficit of nearly 100 megawatts, according to data from National Grid Corp. of the Philippines, a transmission company. Mindanao has suffered from outages for years as a third of supply comes from hydroelectric plants that are unreliable during dry season and subsidized electricity prices discourage constructing new plants. Summer temperatures are driving higher air-conditioning use.

The “Red Alert” warning means outages are to be expected in the two regions. On May 16, the Philippine capital Manila and nearby provinces under Manila Electric’s franchise experienced an hour of rotating power outages.

Aboitiz Power may spend about $5 billion building 2,000 megawatts of new capacity in the next five years, adding to its current portfolio of 2,300 megawatts, Aboitiz said in the interview. Profit in the three months ended March fell for the fifth straight quarter, down 9 percent to 4.2 billion pesos after revaluing its dollar loans and power sales declined. (BLOOMBERG)

http://www.mb.com.ph/power-supply-a-challenge-to-investors/

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SC stops Subic coal power plant project

The Supreme Court has issued a Writ of Kalikasan against the planned 600-megawatt coal-fired power plant of Redondo Peninsula Energy Inc. at the Subic Bay Freeport.

The high court in a July 31 ruling restrained the company from proceeding with the construction of the coal power plant after Party-list Rep. Teodoro Casiño complained against the expansion of the power plant complex from its original capacity of 300 MW.

RP Energy is a joint venture among Meralco PowerGen Corp., a unit of Manila Electric Co., and Therma Power Inc. of the Aboitiz Group and Taiwan Cogeneration International Corp. Meralco PowerGen owns a 50 percent plus two shares in the joint venture while Therma Power and Taiwan Cogeneration hold the balance.

The Supreme Court also remanded the case to the Court of Appeals for further hearings and judgment.

RP Energy said it was reviewing its legal options after the high court gave it 10 days to respond.

“We respect the process and are mindful of the rights of those who filed the petition. Although we cannot discuss the merits of the case, RP Energy reiterates its strong adherence to the laws that govern us in implementing the project such as the Department of Environment and Natural Resources’ ECC process,” RP Energy said.

“Our records show that we have not violated or reneged on our commitment to safeguard the environment and the communities around us,” it said.

RP Energy president Aaron Domingo earlier said the company was hoping to get the environmental clearance certificate for the second 300-MW unit of the 600-MW project by the fourth quarter. RP Energy aims to complete the coal project by 2015.

“We have advanced the development significantly. The site preparation is almost complete we’re actually mobilizing people already. The ECC is a underway,” Domingo said.

The proposed Subic project will utilize two 300-MW units utilizing the latest clean coal technology. The entire project is estimated to cost $1.28 billion.

Meralco, meanwhile, is pursuing an aero-derivative combined cycle power plant in Calamba, Laguna.

“We have secured the site. We have an ECC and we’re continuing multi-partite monitoring process. The site is available for putting up peaking capacity should Meralco need it,” he said.

Domingo said Meralco PowerGen is also looking at liquefied natural gas and coal projects with a capacity of 300 to 500 megawatts each. (Manila Standard Today)

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DENR conducts public consultation on Subic coal plant project

The Department of Environment and Natural Resources (DENR) conducted a public consultation on the coal-fired power plant project proposed by Redondo Peninsula Energy Inc. (RP Energy) last June 29 at the Subic Bay Exhibition and Convention Center.

More than 5,000 participants composed of residents of Olongapo City and Subic, Zambales, as well as representatives from various stakeholder groups in the Subic Bay Freeport area, attended the consultation.

Region III DENR Director Lormelyn Claudio facilitated the consultation while David Evangelista, project development analyst from RP Energy, fielded questions from the public.

Also present were Zambales Governor Hermogenes Ebdane, Jr., Vice Governor Ramon Lacbain II and several councilors from Olongapo and Subic town.

Among the issues raised in the forum was the project’s lack of social acceptability from communities in and around the Subic Bay Freeport, where the project is to be located.

Ebdane pointed out that DENR’s failure to conduct public consultation prior to the issuance of an environmental compliance certificate (ECC) for the proposed 600-megawatt coal plant had clouded the project, even when it was designed to avert power crisis and help develop the local economy.

He also expressed concern on the lack of information about the safety and viability of the proposed plant, and urged the proponents to conduct further public consultations.

“Kung ano ‘yung totoo, ‘yun ang ipakita n’yo at nang makapag desisyon ang mga mamayan (Tell the truth, so that the people can decide),” Ebdane told RP Energy officials.

Another concern raised by forum participants was the availability of alternative employment opportunities for fisher folk and other residents whose livelihood may be affected by the project.

To this, Evangelista said that about 3,200 jobs will be created during the five years that the plant will be constructed, as well as about 300 positions when the plant starts operation. Residents of Subic town will be given priority for employment, he added.

When asked about the effects of the plant to the environment, Evangelista replied that the plant has a built-in pollution-control technology which will minimize the formation of pollutants produced by burning coal. The amount of emission that will be produced will also meet Philippine environmental standards.

Evangelista also said that a 24-hour Continuous Emission Monitoring System (CEMS) will be in place and this will provide 24/7 emission data that will be made available to the public.

He also explained that power sources like wind, water and hydrothermal are very limited and expensive, while coal is cheap and can generate power for sustained periods of time.

When asked about the source of the coal that will be used for the plant, Evangelista said that the fuel supply will be imported from Australia and Indonesia and will be shipped to Subic.

For her part, Claudio said that the public consultation has been successful because of the huge attendance generated and the actual participation of residents and stakeholders in the open forum.

She also noted that RP Energy had already conducted an Information, Education and Communication (IEC) campaign in the barangays near the affected area and had gathered favorable response from the people in these areas. (ICL/MPD-SBMA)


PHOTO:
Zambales Gov. Hermogenes Ebdane Jr. (right) discusses residents’ concerns on the proposed Subic coal-fired thermal power plant with DENR Region III director Lormelyn Claudio and Vice Gov. Ramon Lacbain II during a break in the public consultation held at the Subic Bay Exhibition and Convention Center.

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Environment Impact: Subic Power Plant Undergoes Review

The $1.28-billion 600-MW Redondo coal fired power project in Subic Freeport is facing another review as stakeholders and experts call for a 're-scrutiny' of the power plant, approved during the previous SBMA Board, largely on environmental impact issues.

The review of the Redondo Peninsula Energy Inc., which is 50 percent owned by Meralco PowerGen Corp.

Aboitiz unit Therma Power Inc. and Taiwan Cogeneration Corp., was called after the completion of the Social Acceptability Process (SAP) conducted by the SBMA in December last year.

The power plant’s construction was scheduled to start in 2009 and the initial commercial operation of the first phase 300 mw was supposed to commence this year and the second phase of 300MW to start three years after the commercial operation of the first phase.

“Based on their analyses of the subject matter, the specialists recommended that the SBMA re-scrutinize the coalfired power plant project,” the SBMA’s final SAP report released recently said.

Based on the report, a revisit of the project, which was already approved by the former SBMA Board under the then administration of President Gloria Arroyo, is meant to effectively determine the impact on environment and health; ensure comprehensive impacts zone study; properly determine actual and potential cost; and, to ensure the project is coherent and compatible with SBMA's mandate, vision, mission and development plans, including its protected area management plan. (Bernie Cahiles-Magkilat, Manila Bulletin)

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Meralco says Subic plant running by ’15

The Manila Electric Co. (Meralco), the country’s largest power distributor, said it is on track to finish its 600-megawatt coal-fired power plant in the Subic Bay freeport zone by 2015 despite various challenges.

“The Subic project is moving, we recently filed for our Board of Investment (BOI) registration with the proper endorsement from the Department of Energy,” said Oscar Reyes, president and chief executive officer of Meralco.

Reyes said the biggest challenge, the transmission line, has been tabled for discussion with the National Grid of the Philippines (NGCP).

He added that certain matters raised by the Subic Bay Metropolitan Authority (SBMA) with the firm are being addressed as well.

“We are in constant communication with NGCP, SBMA, with the other stakeholders in the area, and the DOE,” Reyes said.

“We committed to bring this capacity on stream by 2015, and I think that remains to be our target because the Luzon grid clearly needs it,” he added.

The project is being undertaken by Redondo Peninsula Energy Inc. (RP Energy), a joint-venture company among Meralco, Aboitiz Power Corp., and Taiwan Cogeneration International Corp. (TCIC).(Richmond S. Mercurio, Malaya)

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SBMA to institutionalize consultations on environment-sensitive projects

The Subic Bay Metropolitan Authority (SBMA) will institutionalize public consultations for environmentally sensitive projects to give stakeholders a voice in determining development directions and ensure transparency in the Subic Bay Freeport.

SBMA officials made this announcement last week, as they concluded the three-day Social Acceptability Process (SAP) public forum on the prospects of putting up a coal-fired thermal power plant here.

Angel Bagaloyos, chief of the policy and monitoring division of the SBMA Ecology Center, said the public consultations initiated by the SBMA board of directors will be institutionalized for environmentally sensitive projects, in particular.

“This is just a start. In the future, all projects that will be identified by the board as environmentally sensitive will have to go through this process of consulting with the different stakeholders. So this process will be institutionalized,” Bagaloyos clarified.

SBMA director Norberto Sosa said in the same forum that the consultation for the proposed coal power plant was just the first implementation of the SAP, a policy that the new SBMA board had recently approved.

“It happens that this coal-fired power plant project has been declared as one of these environmentally sensitive projects. So it has to undergo SAP so that we can hear out the stakeholders, employees, and the local government units regarding this,” Sosa said.

He added that a project would have to be declared as environmentally sensitive before the SAP could be conducted.

“If there is any project regarded as environmentally sensitive, then it must be declared that it is so, and if it is declared so, then this process will be carried out, similar to what we have been conducting during the last three days,” he stressed.

Sosa said that the SBMA board decided to conduct public consultations to reach out to various stakeholders in the Subic Bay Freeport, since they are the ones being directly affected. “We have to reach out, to listen, so we can have some basis for a decision,” he added.

Sosa also noted that the SAP will be a way to ensure transparency in the projects being developed in the Freeport. “It’s difficult for the SBMA, or for the business locators and project proponents to be perceived as hiding something,” he said.

In the said forum, Sosa, along with director Philip Camara, met with different stakeholders around the Freeport to discuss the 600-megawatt coal-fired power plant that is proposed to be built by the Redondo Peninsula Energy, Inc., a business consortium formed by Meralco, Aboitiz Power Corp., and Taiwan Cogen Corp.

The consultation was attended by representatives from concerned local government units, business locators, socio-civic groups, and leaders of Aeta communities in the free port zone.

Also present during the forum were resource speakers Andre Jon Uchiaoco, a marine biologist; Dr. Visitacion Antonio, a noted toxicologist; and Dr. Rex Cruz, chancellor of the University of the Philippines in Los Baños, who discussed potential risks to health, marine life and the environment, in general, that may result from the coal plant. (SBMA Corporate Communications)

PHOTO:
SBMA Directors Norberto Sosa and Philip Camara (center) answer queries from participants of the Social Acceptability Process (SAP) public forum on the proposed coal-fired thermal power plant at the Redondo Peninsula in the Subic Bay Freeport Zone.

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SBMA consults stakeholders on proposed coal power plant project

The Subic Bay Metropolitan Authority (SBMA) started a stakeholders’ consultation process in a bid to consolidate the opinion of various concerned sectors on the coal-fired thermal power plant being proposed for construction at the Redondo Peninsula here.

The agency formally launched the Social Acceptability Process Stakeholders’ Consultation last week under a policy to strictly review all environmentally-sensitive projects (ESPs) proposed for implementation in the Subic Bay Freeport.

SBMA Chairman-Administrator Roberto Garcia said the agency wanted to ensure that projects to be put up in the zone which the SBMA board had been declared environmentally sensitive, are acceptable to stakeholders.

“This way, the stakeholders are given a sense of participation in preserving and protecting the environment of the Freeport which is a mandated function of the SBMA,” Garcia said.

Facilitated by SBMA directors Philip Camara and Norberto Sosa, the stakeholders’ consultations drew the participation of local government officials from Olongapo City, the municipality of Subic, and Bataan province, as well as local businessmen, residents of the free port and neighboring communities, Ayta tribal leaders, and socio-civic groups.

Camara noted, however, that project proponent Redondo Peninsula Energy, Inc. (RPEI) declined the invitation to attend the consultation.

“They (RPEI officials) said that they are not going to participate because their (investment) contract was approved in June 2010 and the policy (on environmentally-sensitive projects) was approved only in 2011. So they feel that they are not bound by these proceedings,” said Camara, who chairs the SBMA board’s committee on good governance.

Camara said this was the first time for the SBMA board to implement a social-acceptability process that was aimed at getting organized inputs from different stakeholders.

“What we want from the chartered associations are formal resolutions stating their position, and more importantly, why and what specific issues and concerns (they have) after having heard from the resource persons. In the end they will be translated to conditions (that should be met) prior to the issuance of the permit,” he said.

Citing an example, Camara explained that in June 2011, the RPEI requested for a site development permit, which the SBMA Board disapproved because of some unfulfilled provisions in the memorandum of understanding (MOU) between SBMA and RPEI.

Because of this, the SBMA issued only a site preparation permit to RPEI, Camara said.

Meanwhile, Freeport residents and locators lauded the new members of the SBMA board of directors for initiating the consultation in a bid to promote good governance and transparency.

“We really appreciate that for the first time, residents can approach and have open communication with SBMA directors. This is something we never had before, in particular before any project that may affect our community was started,” said Josephine Floresca, a real estate developer.

Floresca also said that one of the reasons why her company was able to convince their clients to locate in Subic was because of the eco-tourism attractions that that the SBMA has been promoting in the free port.

Olongapo City councilor Jong Cortez said that the consultation is a big boost to the government’s thrust of prioritizing the interests of the citizenry, whom President Aquino has described as “the true bosses” of public officials.

Zambales Vice-Gov. Ramon Lacbain II, former Olongapo City councilor JC Delos Reyes, and Greater Subic Bay Tourism Bureau chairman Jorge Lorenzana, among others, also thanked the SBMA for initiating the unprecedented process of consulting stakeholders for coal plant project. (SBMA Corporate Communications)

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Developers to raise P39-billion loan for Subic coal project

MANILA — The project developers of the 600-megawatt Subic coal-fired power facility are preparing for loan procurement of P39 billion to bankroll the significant portion of the facility’s implementation cost.

The 70 percent debt portion of the project cost, they said, will be raised on a project finance basis. The project sponsors will be led by Meralco PowerGen Corporation, the power generation unit of Manila Electric Company (Meralco); Therma Power Inc. of the Aboitiz group and Taiwan Cogeneration Corporation.

In a briefing with reporters, Meralco PowerGen executive vice president Aaron A. Domingo disclosed that the project financing will be raised entirely from a syndicate of local banks.

“The structuring of the peso financing and selection of mandated lead arrangers are ongoing,” he said.

Meralco’s equity portion for its more than 50 percent interest in the venture will amount to P8.0 billion to P9.0 billion. Domingo said that will be infused separately through the backing of its parent firm.

From its initial foray into the 600-megawatt coal plant, Meralco is preparing for a grander venture into the power generation sector. In fact, from the 1,500 megawatts of portfolio it has initially cast on blueprint, the company is now looking at increasing that to 1,800 to 2,400 megawatts – the development timelines, of course, will depend on electricity demand expansion.

Moving forward from the signing of a shareholders’ agreement for the Subic facility last week, Domingo disclosed that they are now working next on the engineering, procurement and construction (EPC) contract.

“We are preparing for full EPC contracting strategy with major equipment (boiler and steam turbine generator) suppliers for the bidding and selection by end of December 2011,” he said.

He added that they have already sent request for proposals (RFPs) to three EPC contractors; and also solicited tenders from original equipment manufacturers (OEM) of boilers and turbines.

Based on targets set by the project sponsors, the first unit of 300 megawatts will be on-line fourth quarter of 2014; while the next unit of the same capacity will be on stream six months after. (Myrna M. Velasco, Manila Bulletin)

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Meralco acquires 52% share of Subic coal plant

Manila Electric Co. (Meralco), the country’s largest distributor of electrical power, marked its reentry into the power-generation industry on Friday by acquiring a controlling interest in the $1.28-billion coal-fired thermal power-plant project slated for construction at Subic’s Redondo Peninsula.

The power firm, which previously sold to the National Power Corp. all the power plants it had built since it was organized in 1903, successfully forged a deal with AboitizPower and Taiwan Cogeneration Corp. (TCC), the original partners in the Redondo Peninsula Energy Inc. (RP Energy), which has the development rights to develop the 600-megawatt coal-fired power plant.

Under a shareholders’ agreement signed on Friday by the three parties, Meralco’s subsidiary Meralco PowerGen Corp. (MPGC) became the controlling shareholder of RP Energy with 50 percent plus two shares, while AboitizPower subsidiary Therma Power Inc. (TPI) and TCC subsidiary Taiwan Cogeneration International Corp. Philippines (TCIC) held an equal proportion of the remaining shares.

The agreement was signed by MPGC president Oscar Reyes, MPGC executive vice president and general manager Aaron Domingo, TPI president Antonio Moraza, TCIC director Brian Hsu, and RP Energy president Erramon Aboitiz.

Energy Secretary Jose Rene Almendras witnessed the signing at the Lighthouse Marina Resort here.

Meralco’s reentry into power generation, Reyes pointed out, came almost 40 years after Meralco relinquished its power-generation operations and 20 years after power generation was reopened to the private sector amid the crippling power crisis in the late 1980s.

But with the Aboitiz Group and Taiwan Cogeneration Co., Meralco is “making a strong statement and vote of confidence in our country and in our economy and a strong commitment to growth and progress,” Reyes said.

He added that Meralco is “well-positioned” and aims “to be part of an integrated solution” in meeting the crucial need for new technologically-advanced and cost-efficient generation capacity.

Reyes also extolled Subic both as a “major investment destination and a strategic site for business” and an important player in the energy industry by hosting the strategic 5-million barrel Subic-Clark liquid fuel-storage depot.

“With RP Energy’s 2x300 megawatt power facility, the [Subic Bay Freeport] Zone will again play a strategic role in helping meet 8 percent of the entire Luzon grid’s power needs,” he said.

The Meralco official stated that the Subic power project would need the continuing full support and goodwill of the Department of Energy, the national and the local governments, the Subic Bay Metropolitan Authority as well as local communities.

Erramon Aboitiz, meanwhile, reaffirmed RP energy’s commitment in providing competitively-priced power without damaging the environment.

He stressed that the proponents have specified the use of circulating fluidized bed boilers in the power plant. This kind of boiler removes sulfur oxide and controls the burning temperature of the coal to prevent the formation of nitrous oxides, lower air emissions, and make the plant environment-friendly, he said.

Aboitiz also cited the advantages of taking in MPGC as a partner.

“Being the country’s largest utility serving the equivalent of more than half the nation’s GDP [gross domestic product], Meralco is without a doubt the ideal conduit to deliver the cost advantage of RP Energy to as many households and businesses as possible,” he said.

The Subic coal-fired thermal power project is projected to be completed with a total budget of $1.28 billion. It will consist of two 300-megawatt units that will be constructed in two phases.

The first unit is expected to be commercially operational by the first quarter of 2015, while the second unit is expected to be completed by the second quarter of the same year. (Henry Empeño w/ Paul Anthony Isla, Business Mirror)

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$1.28B earmarked for Subic coal plant

Three energy companies signed a memorandum of agreement to put up a US$ 1.28 billion 600-megawatt (MW) coal power plant in Subic, Friday.

Meralco, Aboitiz Power and Taiwan Cogen signed the agreement to build the plant in Redondo inside Subic Bay Freeport zone.

Erramon Aboitiz said that the project aims to generate competitive priced power with least possible adverse effects on the environment.

He added that the project would become the source of competitive priced baseload power for Subic Bay Freeport and for the entire Luzon grid.

Aboitiz said the consortium has opted to use Circulating Fluidized Bed Boilers that remove sulfur oxide and control the burning temperature of coal to prevent formation of nitrous oxides that lower air emissions.

First phase of the project will be completed in 2014 while the second and final phase will be finished in 2016. (Anthony Bayarong, Manila Times)

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Meralco ready to sign supply contract for Subic coal plant

Utility giant Manila Electric Company (Meralco) is ready to ink a power purchase agreement (PPA) which may cover the entire capacity of the $1.28 billion Subic coal-fired power facility of 600 megawatts that will be due on stream by the first half of 2014.

“We should be able to accommodate the 600MW, but it is a function of what price… and there are also other interested parties,” Meralco senior executive vice president Oscar S. Reyes said.

With the signing of the Shareholders Agreement among project sponsors on Friday, the utility firm’s subsidiary Meralco PowerGen (MPG) officially became the majority shareholder in Redondo Peninsula Energy (RP Energy), with more than 50 percent equity. RP Energy is the corporate vehicle for the project.

Aboitiz Power’s wholly-owned subsidiary Therma Power Inc. and another partner Taiwan Cogeneration Corporation cornered the remaining shareholdings.

“With highly respected and well-established local and business partners, Meralco now signals its re-entry into power generation, nearly 40 years after relinquishing its power generation operations and 20 years after the ‘welcome mat’ had been laid out for private sector participation in power generation,” Reyes said.

The intent of the project developers would be mainly to offer the capacity of the baseload coal-fired plant as a cost-competitive source of power – be it for end-users already qualified under open access or those which will remain captive, mainly the residential end-users.

With Meralco’s interest in the project, it will also shoulder more than 50-percent of the equity cost portion. The 70-percent of the total project cost will be infused through project financing.

During the signing of the shareholders’ deal, several banks interested at offering financing were already hovering around the venue – including BDO Capital, RCBC, Philippine National Bank, PNB Capital, Bank of the Philippine Islands and First Metro Investment Corporation, among others.

For his part, Aboitiz Power president Erramon I. Aboitiz noted that the coal plant’s project design has been re-evaluated when Meralco came into the picture as their partner.

“As we initiated discussions with Meralco PowerGen, the configuration of the power stations was rethought again, this time using two 300-MW generating units with reheating capabilities,” Aboitiz said. (Myrna M. Velasco, Manila Bulletin)

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Subic Power Expands With $1B

MANILA — The entry of the Pangilinan-led Meralco in the coal-fired Subic power plant would pave the way for the expansion of the 300-megawatt coal-fired power plant into a 600-mw with investments of almost $1 billion for the entire project.

Subic Bay Metropolitan Authority administrator Armand C. Arreza told reporters at the sidelines of the Philippines-Taiwan Joint Economic Conference (JEC) Thursday that the entry of Meralco PowerGen Corp. in Redondo Peninsula Energy Inc. in Subic would dilute the shareholdings of the Aboitiz Group and Taiwan Cogeneration Corp. (TCC) to less than 50 percent.

Originally, the Aboitiz group owns 51 percent share and the Taiwanese with 49 percent. After the Meralco entry, the Filipino investors would have 75 percent shareholdings and the Taiwanese would be diluted to 25 percent, Arreza said.

According to Arreza, only one third of the first phase 300-mw power plant would be supplied to Subic and the rest for Olongapo and Clark. But with the additional 300-mw capacity, the Subic plant would be augmenting power supply to the national grid.

The power distribution giant Meralco headed by businessman Manuel V. Pangilinan had earlier announced plans to enter power generation as "part of its over-all strategy to assist in ensuring efficient, adequate and reliable electricity at cost-competitive rates."

The company plans to put up at least 1,500 MW of new generation capacities over the next five years.

Earlier, Brian S. Hsu, TCC president, said that construction of the first phase of the project was scheduled to start in 2009 and commercial operation in 2012 and the second phase of 300MW to start three years after the commercial operation of the first phase.

The first phase was to be funded through 70 percent loans and 30 percent equity contribution.

Hsu said that the entry of the additional power capacity into Subic would mean lower power cost to Subic Freeport, which has a good number of Taiwanese investors.

“We are trying to bring the cost of power down especially that lots of users in Subic are paying very high rates,” he noted.

Aside from lower cost, Hsu said the coal-fired plant is using the circulating fluidized bed (CFB) technology, an environmentally-friendly technology and is considered a ‘clean coal technology.’

Even at that time, Hsu already said that the joint venture was already considering of taking in new investors but it could be arranged after the project has come into commercial operation saying it would be easier to pursue a project with only two partners negotiating.

The Taiwanese power company supplies 25.4 percent of the total 7,721 megawatt power requirement of in Taiwan.

The Subic project is the first international foray of the Taipei Stock Exchange-listed company. (Bernie Cahiles-Magkilat, Manila Bulletin)

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