China’s State Grid committed to Vis-Min interconnection

by Myrna Velasco – February 28, 2016

from Manila Bulletin

Houston, Texas – State Grid Corporation of China, the foreign technical partner of the National Grid Corporation of the Philippines (NGCP), is committed to the wish of the Philippine government to advance the long-planned Visayas-Mindanao transmission interconnection project.

In an interview here following a presentation to international journalists of its Global Energy Interconnection (GEI) strategy on the sidelines of the IHS-CERA Week, State Grid Vice President Wang Yimin has noted that “as far as the investment is concerned, we will invest according to the return of the project.”

He has set some early caveat to the project though, that interconnection of power grids via submarine cable “is often 10 times more expensive compared to overhead transmission lines of the same length.”

Wang said they will have to assess the viability of the project then – not only on investment return but also on its affordability to Philippine consumers.

It is NGCP, with the aid of State Grid, that is undertaking the new feasibility study to link-up the two grids via the proposed Negros-Zamboanga interconnection route.

Based on a direction being set by the Philippine government and as anchored on the feasibility study approval being sought from the Energy Regulatory Commission (ERC), the new timeline of the project’s completion would be by 2021.

“Different projects may have different situation, roughly I can say if we compare with the same length of the transmission submarine cable, it is at least 10 times more expensive compared to the overhead transmission line,” Wang reiterated.

He asserted that so far, State Grid is satisfied with its Philippine investment as technical partner to NGCP in the 25-concession deal for the country’s transmission assets.

“Yes, of course, we are satisfied. We entered the Philippine market several years ago and operation is very successful… in the past five years, State Grid has several investments – every project has been successful, including in the Philippines, Australia, Brazil, Portugal and Africa,” Wang stressed.

He added that despite the “less mature dynamics” of the Philippine power industry, the Chinese firm still sees enormous investment opportunities in its electricity system.

“We are ready to further our business in other countries, including the Philippines, if conditions will allow… the Philippines is a developing country and the power grid is not so strong, so we need to further develop, so I think there are many more opportunities in the Philippines for investment,” the State Grid executive added.

In his plenary speech, State Grid chairman Zhenya Liu has noted that they have already invested $36 billion for power asset acquisitions in overseas markets.

Incidentally, the Philippines had been their strategic take-off point for offshore ventures, which at this point, already span across continents.