Thursday, May 28, 2009

DMCI may pull the plug on new Visayas plant

DESPITE an impending supply shortage in the Visayas, DMCI Power Corp. may cancel a plan to put up a coal-fired facility in the Western part of the region, according to the operator of the country's wholesale electricity spot market (WESM).
"The indications point to a withdrawal," Melinda Ocampo, acting president of the Philippine Electricity Market Corp. (PEMC) and a consultant to the Department of Energy, said, citing DMCI Power's failure so far to sign supply deals with potential offtakers.
DMCI Power is the power generation arm of DMCI Holdings Inc., a local conglomerate engaged in construction, real-estate development and coal mining. The company earlier proposed to put up a 100-megawatt coal plant in Conception, Iloilo on Panay Island at a cost of about P7 billion.
The coal facility would use circulating fluidized bed technology-or "clean coal technology"-and would tap coal from Semirara Mining Corp., another DMCI unit based in Antique.
DMCI Power was already in talks with several banks for financing the coal plant but negotiations failed to move because of the firm's inability to sign a supply agreement with the island's electric cooperatives.
The plant was scheduled to come online in two years to help address the Visayas grid's critical power supply, which has already caused outages in the region.
"We're expecting DMCI Power to come in by 2012, 2011. Unfortunately their problem is more on the offtaker," Ocampo said.
DMCI Power last year offered to supply 90 megawatts to electric cooperatives in Panay but sources said that most of the distribution utilities in the Visayas were keen on renewable energy sources.
Despite this, Ocampo said the energy department has yet to receive a notice from the company if it would drop the project.
"I don't know whether they will still push through with it but when it comes to the department, we have not yet received any formal or official notice from them that they are withdrawing," she said.-- Euan Paulo C. AƱonuevo