‘Subic plant key to supply reliability’

by Lenie Lectura, February 4, 2015
from BusinessMirror

A 600-mega-watt (MW) power project in Subic—which has been on the back burner since 2010—could now finally take off to provide the Luzon grid with the much-needed additional power-generating capacity in the years ahead, following the Supreme Court’s (SC) favorable decision on  Tuesday.

Foreign and local business groups have been lobbying for the proposed power facility, even stressing that the electricity shortage feared to hit the Luzon area this summer would have been easily addressed by the
600-MW plant.

Redondo Peninsula Energy Inc. (RP Energy), a consortium composed of Meralco PowerGen Corp., Aboitiz Power Corp. and Taiwan Cogeneration International Corp., on Wednesday welcomed the decision of the SC, dismissing the writ of kalikasan case against the company’s coal-fired power-plant project at the Subic Bay Freeport Zone and upholding the project’s environmental compliance certificate and lease and development agreement with the Subic Bay Metropolitan Authority.

RP Energy President Angelito U. Lantin said the SC decision will now allow the power firm to proceed with the construction and development of its power plant in Subic. “This 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,” Lantin said.

“RP Energy is committed to working with all concerned government agencies in ensuring a reliable, sustainable and competitively priced supply of power that will contribute to the continued progress of the country,” he added.

The Subic project has been in the back burner since 2010, owing to a number of legal challenges hurled by those who are against coal-fired power plants.

Had this project push through as scheduled, there would have been no anticipated power shortage in Luzon this summer. The Subic power project was originally supposed to come online this year.

Energy Secretary Carlos Jerico L. Petilla said it would take about three years for RP Energy to finish construction. “Oversupply is a nice problem to have, if ever it ends up in that manner. But, I think, the decision is actually crucial, not because of power significance, but because it would have thrown all economic zones in danger if the decision was otherwise,” he said.

“We bought a 600-MW gas-fired power plant in Singapore, and it took us about five months. We’re planning on building a 600-MW power plant in Subic, and that has been on the burner since 2010,” Meralco Chairman Manuel V. Pangilinan said.

The total project cost is over $1 billion, according to Meralco President Oscar Reyes. “Substantial
expenditure has been invested—over P1 billion. The site preparation is complete. We have to proceed with the award of the EPC [engineering, procurement and construction] contract and finalize the financial closing. We hope to move on with this on or before the middle of this year,” he said, adding that the construction could take “roughly 42 months.”

Reyes stressed the importance of the project, even if it is not going to address this year’s power shortage. “The Luzon grid is in a catch-up mode. Luzon grid is in need of critical capacity in order to move from a very tight supply situation to one that allows more adequate reserve. That is really the key to assuring supply reliability, availability and very competitive pricing,” he said.

Petilla earlier urged lawmakers to come up with a bill that will hasten the construction of power plants.

“This is to shorten some of the stumbling blocks in coming up with power plants. This is intended for
energy projects. We want a bill that will fast-track the processing of permits and, if possible, no TRO [temporary restraining order] against these projects,” the energy chief said.

“Will we do away with permitting? No,” Petilla remarked. “We have a law right now that any government project of national interest cannot be subject to a TRO, except for the SC. The problem is we cannot invoke that for power plants. It’s only for government projects.”

“Maybe there could be someone who determines national interest. The President can sign. Malacañang can come in and sign,” Petilla said, adding that these power projects affect national interest. “This particular aspect of coming up with a power plant is very important,” he added.

The DOE has been vocal in soliciting the help of the private sector to build more power plants to augment the lack of power supply. But the private sector is asking the government to diligently do its part.

Despite the SC’s nod, the anti-coal coalition in Subic said it continues to oppose the project for using dirty fuel.

In a statement issued on Wednesday, the Subic Bay Chamber for Health and Environment Conservation said it was disappointed over the SC ruling that set aside a writ of kalikasan against the proposed power plant, but pointed out that this did not erase the fact that coal is harmful to the environment and people’s health.

“All should understand that a reversal of the validity of documents [does not mean] that SC justices favor coal as fuel,” the group said. “We maintain our position that a coal-fired power plant is detrimental to the environment and the health of the people [and] we remain strongly opposed to the location of a coal-fired power plant in Subic Bay.”

(With Henry Empeño)

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