NGCP says ‘new technology’ eyed in Vis-Min grid link-up

By Myrna M. Velasco – May 8, 2017, 10:00 PM

from Manila Bulletin

Concessionaire-firm National Grid Corporation of the Philippines (NGCP) indicated that it will be deploying new technology in the planned Visayas-Mindanao Interconnection Project (VMIP), hence, the swell on its estimated project funding.

It noted that old studies of the government on the planned transmission link-up with cheaper costs may no longer be applicable, given technology standard advancements.

NGCP backpedaled a bit though as it hinted the final project funding may still end up lower depending on the final approval of the Energy Regulatory Commission (ERC) and the selection of the engineering, procurement and construction (EPC) contractor.

“If there are contractors or entities who can implement the project for less, they are welcome to participate in the competitive selection process that we will undertake,” NGCP said.

Nevertheless, NGCP’s plans may eventually be thrown into the air as the Department of Energy (DOE) is now giving the VMIP’s implementation mandate to state-run National Transmission Corporation (TransCo) as the project implementer.

TransCo president Melvin A. Matibag said this is one agenda that they will present to President Rodrigo Duterte in a meeting in Malacanang this week – the main goal of which is to secure the Palace’s go-signal on the use of the Malampaya fund to bankroll the project.

TransCo similarly indicated that it will refer back to previous feasibility studies undertaken by the government – including the ones just prior to TransCo’s privatization in 2009 – because cost assumptions then were still way lower than P52 billion. At the time, the project cost based on updated studies had still been at roughly $500 million.

Nevertheless, NGCP still explained “the estimated cost to implement the long-awaited interconnection project between the Visayas and Mindanao grids is intended to cover the project from feasibility to completion, and includes new technology to support its implementation.”

The higher cost, it expounded, “was generated using preliminary data sourced from feasibility studies, while also taking into consideration the magnitude of right-of-way acquisition for the new Cebu-Dipolog route, and the new wave of technology to be used in all project aspects.”

NGCP said the project will involve “construction of multiple substations and transmission lines, a longer route for submarine cable laying involving new high voltage direct current (HVDC) technology, and simultaneous upgrade of existing transmission facilities,” – and such will require massive capital outlay.

The company reiterated “this cost may also change according to the needs of the project,” while adding that “at any given rate and under any circumstances, NGCP is more than ready to provide the physical and financial resources to see this project until energization.”