RP Energy cancels contract for coal-fired plant in Subic

By Lenie Lectura – January 14, 2019
from Business Mirror

REDONDO Peninsula (RP) Energy Inc., a partnership among the Manila Electric Co. (Meralco), Aboitiz Power Corp. and Taiwan Cogeneration Corp. through their respective subsidiaries, has canceled the limited notice to proceed issued to the project contractor for its 300-megawatt (MW) first phase coal-fired power plant in Subic, Zambales.

“RP Energy issued a limited notice to proceed to the EPC [engineering, procurement, construction], but we discovered we had problems with the slope, with the site and to mitigate, to fix the site, would require the site to be stable,” AboitizPower Chief Operating Officer Emmanuel Rubio said, adding “there’s instability in one of the slopes.”

RP Energy earlier tapped Doosan Heavy Industries and Construction Co. Ltd., and Azul Torre Construction Inc. for the coal-power project.

Later on, he said, “the board decided to hold development” and as such, “the limited notice to proceed was also canceled on the EPC” contractor.

The project proponent is now looking for solutions to address the setback.

“We are looking for alternatives, and based on the decision, we will make a decision should we actually proceed. Again, conditional to the condition of the site, it’s a construction issue, something that was not foreseen by RP Energy. We really have to find a solution on that one. At the moment, it’s Meralco looking at a way to manage the movement,” he said.

Meralco may tap a technology to address the problem, but given the legal issues involving the power supply agreement (PSA)—a vital component of the power project before full-blown construction takes place—Rubio said it’s best if they all wait for the court decision.

“A number of [technology], but given that the contracts are actually pending in court, I think we will make a decision once we have clarify on the decision on the contract,” he said.

In 2016 RP Energy forged a PSA with Meralco for a contracted capacity of 225 MW within a 20-year term.  The PSA is still pending for approval with the Energy Regulatory Commission.

The power project is classified as a committed project by the Department of Energy and is approved and registered with the Board of Investments.