SC decision paves way for 600-MW Subic power project

by Myrna Velasco, February 4, 2015
from Manila Bulletin

The long-delayed Subic coal-fired power project of 600-megawatt capacity may finally move forward into implementation phase following a favorable Supreme Court (SC) decision on the Writ of Kalikasan case earlier slapped against it.

In a statement to the media, the power generation subsidiary of the Manila Electric Company (Meralco) has noted that “the decision of the Supreme Court will now allow RP Energy to proceed with the construction and development of its 600MW power plant in Subic.”

Had the proposed facility not been hindered by the legal suit filed by some groups, the plant’s capacity should have been enough to spare Luzon grid from the feared supply tightness or probable shortages this summer.

But since the signing of the definitive agreements among project shareholders, its advancement into full implementation and construction had been impeded by judicial interventions.

Nevertheless, Meralco PowerGen has noted that the ruling of the high court “could not have come at a better and more opportune time considering the challenges we now face insofar as the power supply situation in the Luzon grid is concerned.”

The company made reference to the announcement of SC spokesperson Theodore Te in which he stipulated the dismissal of the Writ of Kalikasan case against the 600MW Subic coal-fired project and upholding the project’s environmental compliance certificate (ECC) including its first and second amendments as well as the Lease and Development Agreement (LDA) with the Subic Bay Metropolitan Authority.

Meralco PowerGen is the majority equity holder in the project’s investment vehicle Redondo Peninsula Energy (RP Energy). Its other partners are the Aboitiz Group and Taiwan International Cogeneration Corporation.

When the project was firmed up years back, it was estimated that it will command an investment of up to P64 billion – but that may still change depending on the engineering, procurement and construction (EPC) contract that the developers will eventually negotiate.

The design of the proposed power plant had been re-configured from the initial two units of 150MW each to two units of 300MW each – or for a total capacity of 600MW. Project sponsors have noted then that bigger capacity would enable the plant to take advantage of increased efficiency of a larger generating unit.

It was explained that increased unit efficiency will mean less coal to be burned to produce a kilowatt-hour of electricity. The plant will be equipped with a circulating fluidized bed combustion technology.

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