China Energy to build 1,500-MW power projects

By Myrna M. Velasco – May 21, 2018, 10:01 PM
from Manila Bulletin

Alegria, Cebu – A Chinese energy firm will be injecting massive investments for planned two coal-fired power projects of 1,500 megawatts aggregate capacity in Luzon and Visayas grids, Energy Secretary Alfonso G. Cusi has declared to reporters in a briefing on the sidelines of the production launch of the Alegria oil field here.

With such scale of power developments to be sponsored by China Energy Development Corporation for projects utilizing ultra super critical (USC) clean coal technology, it is anticipated that the investment cost could go as high as US$3.750 billion or a mammoth equivalent of P195 billion.

Cusi said the Chinese firm will put two units of 600-MW capacity for Luzon grid or total installation of 1,200MW; and two units of 150MW or aggregate 300MW capacity for the Visayas power investment.

The DOE chief noted that China Energy executives were in the country Friday last week, and had already started scouring through prospective sites in Cebu; and the same thing for that planned development in Luzon. “They’re looking at several sites in Luzon, but we don’t want to meddle in that anymore,” he stressed.

At this stage, Cusi noted that the government has given its commitment that once investment blueprints and timeframes are firmed up for these proposed projects, the Department of Energy (DOE) will certify the Chinese firm’s ventures as energy projects of national significance.

“I told them (China Energy), I’ll guarantee you, one that we’re going to declare that as energy project of national significance and we will finish the permitting – provided that all documents are complete – we will finish the permitting in 30 days,” the energy chief stressed.

Cusi said these power projects are currently being discussed to be of ‘merchant market’ frame of development – meaning, they have to seek out bilateral supply contracts with interested off-takers (capacity buyers) or they shall be trading their generated capacity at the Wholesale Electricity Spot Market.

“In order to increase capacity, there must be investors willing to put up power plants that are merchant,” Cusi said, adding that he does not prefer tying up Filipino electricity consumers to long-term contracts, especially if these will have take-or-pay clauses.

He expounded that the Chinese energy firm’s interest in the Philippine power sector had been stirred up during President Rodrigo Duterte’s state visit in China in 2016, but investment decisions are just advancing now.

In the end, the energy chief noted that “our objective is to drive down electricity tariffs, so how can we drive down electricity rates? The answer is to increase capacity.”

He added that for the Duterte administration, the main concern is capacity bulking up onward to years 2020, 2021 and 2022, so they will not be leaving a capacity of power supply shortfalls – given also this administration’s push on massive infrastructure build-up.

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