Friday, August 31, 2012

EDC Eyeing 335MW Add’l Capacity

Manila Bulletin
August 31, 2012, 8:15pm
MANILA, Philippines — From its reigning installed geothermal capacity of 1,130 megawatts, Lopez firm Energy Development Corporation (EDC) is targeting to set on stream additional 335 megawatts of this technology type to further expand its portfolio on this sphere.
EDC senior vice president Agnes de Jesus has indicated in a recently-concluded Renewable Energy Forum that of the targeted future geothermal capacity, about 125MW will likely be on-line by 2016.
But with the inclusion of its wind development target, she noted that “for the next five years, EDC will push for 6 potential greenfield projects with a total capacity of 200 MW by 2016-2017.”
The 12 new geothermal projects of the company, she said, will comprise of five expansion ventures; two development projects and prospective exploration in five frontier areas.
The two development projects being lined up are the 65-MW Labo prospect in the Bicol region; and 30-MW Mainit planned project in Mindanao.
She similarly emphasized that the “five expansion projects will be from EDC’s existing steamfields;” particularly those in Bacon-Manito, Kayabon, Nasulo, Dauin and North Cotabato.
The frontier areas being eyed by the company are the 20-MW Balingasag; 30-MW Ampiro; 40-MW Lakewood; 20-MW Mandalagan as well as the Mt. Zion prospect.
The company is currently ranked the world’s second largest geothermal energy producer, but with its planned capacity expansions, it has been advancing a bid to eventually topple the United States in the top spot.
The lady executive similarly emphasized that the overseas ventures being eyed by the company are on track, primarily those in the Latin American jurisdictions of Peru and Chile. The other development targets are in Indonesia and Africa.
De Jesus noted that “geothermal will make up 70-percent of the 17 new projects” cast in the investment blueprint of EDC.
The other project developments focus will be on wind for three sites, including the 84-MW Burgos project; and solar for two prospective sites.     source

Greenergy defers closing of Cleantech deal

Business World Online
Posted on August 31, 2012 07:59:26 PM

LISTED Greenergy Holdings, Inc. has moved to September 7 “or earlier” from August 31 the closing of its share sale to a Swiss-managed fund to give more time to finalize transaction documents, the company said in a disclosure to the stock exchange on Friday.

It specifically cited incorporation papers of Biomass Holdings, Inc., the new subsidiary to be formed under the agreement which will invest in the new biomass power plant of San Carlos BioPower, Inc. in the Visayas.
Greenergy said it had agreed with Cleantech Projekgesellschaft mbH to move the closing date to enable them “to further review all documents related to the investment as well as finalize the transaction documents...”
“We are just waiting for other documents. This is the initiative of both companies. The delay in closing date has nothing to do with any issue,” Greenergy CEO Antonio L. Tiu said in a telephone interview on Friday.
“As soon as we get the documents, we can finally close the deal.”
Greenergy, formerly MUSX Corp., last August 15 entered into a share sale agreement with Cleantech, a fund managed by ThomasLloyd Global Asset Management (Switzerland) AG of Zurich, which will end up owning 17.66%.
Greenenergy will end up owing 57% from the current 69%, with PCD Nominee Corp. and Earthright Holdings, Inc. holding the balance.
Greenenergy had said earlier that the transaction will not result in any change in composition of its board of directors and officers.
Greenergy shares ended Friday’s trades unchanged at P0.016 apiece. -- DOR    source

ERC denies NASECORE motion on Meralco

Business World Online
Posted on August 31, 2012 07:43:53 PM

The Energy Regulatory Commission has denied the motion of the National Association of Electricity Consumers for Reforms, Inc. (NASECORE) to stop Manila Electric Co.’s (Meralco) application to increase the generation under-recoveries saying the distribution utility complied with the requirements of the commission.

In its motion to dismiss, NASECORE said Meralco failed to meet the commission’s rules on jurisdictional/publication requirements because it should publish a new supplemental application.
In an order dated July 30, the commission denied NASECORE’s motion to dismiss Meralco’s original and supplemental applications to confirm generation, transmission, system loss and lifeline subsidy over- or under-recoveries filed last Jan. 25 as the distribution utility changed the computation of the generation rate over/under-recover (GOUR) without publication.
“What NASECORE insists is not applicable because Meralco is not applying for an increase in generation rate but generation under-recoveries,” ERC executive director Francisco Saturnino C. Juan said in a phone interview yesterday.
In March 2011, Meralco filed an instant application with the ERC to authorize it to collect under- and over-recoveries for the generation, transmission, system loss and lifeline subsidy pass-through costs and carrying costs for the February 2010 period, which was subject to a hearing in Feb. 1.
It requested an increase of P0.0483 per kilowatt-hour (kWh) for generation rate under-recovery of P1 billion for 12 months, a decrease of P0.0127 kWh for transmission over-recovery of P110.6 million for six months, a decrease of P0.0027 kWh for system loss over-recovery of P425.2 million for six months and an increase of P0.0005 kWh for lifeline subsidy under-recovery of P9.16 million for one month.
However, prior to the filing of its formal offer of evidence, Meralco discovered that it did not include other customers under the time-of-use (TOU) rate in its computation of generation recoveries. It submitted an additional computation to increase by P0.0048 kWh for generation recoveries of P126.45 million for 12 months.
The ERC also said the pre-trial conference and evidentiary hearing on the supplemental application of Meralco is set in Sept. 5 at 10 a.m. at the ERC Hearing Room at the Pacific Center Building, Pasig City.
“What Meralco is asking is the generation adjustment to recover the generation under-recoveries. Implementation of the adjustment is still subject to hearing and, after the hearing, the ERC will then decide whether to approve the application of Meralco,” Mr. Juan explained. -- Danessa O. Rivera    source

Power rate hike seen starting next month

By: Amy R. RemoPhilippine Daily Inquirer
Power consumers will have to pay an additional 7 centavos per kilowatt hour (kWh) under the universal charge for the missionary electrification (UCME) component in their electricity bills starting next month.

This came after the Energy Regulatory Commission (ERC) allowed the state-run National Power Corp. (Napocor) to recover from all grid-connected consumers the rest of its fuel purchase and foreign-exchange costs under the fourth to sixth installments of the incremental currency exchange rate adjustment (Icera) and the generation rate adjustment mechanism (GRAM).

These are costs incurred by Napocor to supply power to the off-grid areas covered by its Small Power Utilities Group (SPUG), the state generator’s missionary electrification arm that provides electricity to remote islands and far-flung, inland barangays.

Napocor’s SPUG operations are subsidized by the main grid customers through the UCME component of their electricity bills.

Initially, grid-connected consumers were supposed to shoulder only half of the P4.15-billion costs that the Napocor is seeking to recover through the GRAM and Icera mechanisms. The difference was supposed to be added to the generation charges being collected from consumers within the SPUG areas.

However, it was decided that these costs should instead be recovered fully from the main grid consumers to “mitigate the impact of the rate adjustment on the consumers within the SPUG areas,” explained ERC executive director Francis Saturnino Juan.

This “will enable Napocor SPUG to recover its true-up adjustments in a timely manner so that it will have sufficient funds to address its operational expenses, particularly the fuel cost and its maturing obligations,” the ERC stated in two separate orders it issued late last month.

This means that the UCME for grid-connected consumers will now increase to about 11.54 centavos per kWh from the current 4.54 centavos per kWh, according to Juan.

However, in what amounts to a sleight-of-hand, main grid consumers will not technically feel the increase as they are already paying the 11.54 centavos.     source

Ayala readies $2.5B worth of power projects

By: Amy R. RemoPhilippine Daily Inquirer
Conglomerate Ayala Corp. is embarking on $2.5 billion worth of power projects to build a portfolio of about 1,000 megawatts over the next five years as it eyes to make energy one of its core businesses over the long term.

Eric T. Francia, managing director and group head for corporate strategy and development of Ayala, explained that of this amount, the company expected equity investment to reach $500 million.

Ayala, according to Francia, was looking at a “balanced portfolio” of power generation coming from greenfield projects fueled by traditional fossil fuels like coal and renewable energy. Also being considered are possible asset acquisitions.

The goal is to at least start the construction of the proposed power plants over the next five years as it would be impossible to have all the 1,000 MW coming on stream within that period.

Francia added that Ayala has been entering into partnerships with companies that have the expertise in the energy industry. In 2010, Ayala formed a joint venture with Mitsubishi Corp. of Japan to develop solar power projects in the Philippines. Last year, Ayala’s power generation arm, Michigan Power Inc., acquired a 50-percent stake in NorthWind Power Development Corp., which owns and operates Southeast Asia’s first commercial wind facility, the 33-MW wind farm in Bangui, Ilocos Norte.

Through a vehicle company called South Luzon Thermal Energy Corp., Ayala-led AC Energy Holdings and Trans-Asia Oil are constructing a P12-billion, 135-MW coal-fired facility in Batangas. The second phase will see the construction of another 135-MW coal-fed unit within the same compound.

For its mini-hydropower ventures, Ayala has partnered with Sta. Clara Power Corp., which holds several service contracts for hydropower projects. The partnership will involve at least 100 MW worth of capacity.
“Our aspiration is to make [power] one of our major legs within the five- to 10-year horizon, contributing to equity earnings as one of our core businesses. As you know, our core businesses—the big four—contribute more than P1 billion in equity earnings to Ayala. So our aspiration is that over a five- to 10-year period, hopefully, our equity earnings from these projects will be in that order of magnitude,” Francia said.     source

Ayala investing $2.5b in power

Manila Standard Today
By Alena Mae S. Flores | Posted on August 31, 2012 | 12:01am

Ayala Corp. is investing $2.5 billion in power plants with a combined capacity of 1,000 megawatts over the next five years, an executive of the conglomerate said Thursday.
Ayala managing director Eric Francia told reporters at the sidelines of the Philippine Stock Exchange Renewable Energy Opportunities Forum the Ayala Group would initially infuse $500 million as equity in the projects.
“[The] 1,000 MW is our benchmark. Now, if we can exceed that, if we are fortunate enough to land some interesting acquisitions, we can exceed that. But if not, that can be tall order if it is all greenfield projects,” Francia said.
Francia said 20 percent of the 1,000-MW power portfolio would be in renewable energy projects and 100 MW in small hydroelectric power stations in partnership with Sta. Clara Power Corp.
Sta. Clara obtained approval from the Energy Department on several hydro service contracts with a combined capacity of 137.5 MW.
Francia said the Ayala Group was also looking at solar power projects and needed to revisit the plan due to the lower approved feed-in tariff rates for solar projects.
“We have a pre-development plan for anywhere between 15 MW and 50 MW but given the FIT rate, we need to revisit if it’s going to be feasible. It’s very challenging,” he said.
Ayala earlier teamed up with Mitsubishi Corp. to form PhilNewEnergy Inc. to build the P7-billion Darong solar power project in Sta. Cruz, Davao del Sur.  Francia said the company would also develop wind power projects under Northwind Power Development Corp.
Ayala’s wholly-owned unit Michigan Power Inc. acquired a 50-percent stake in NorthWind for P512 million.
“We want to have a balanced portfolio between thermal and traditional load and renewable technology,” the executive said.
Francia said the company would also pursue the expansion of the 135-MW coal project in Batangas under South Luzon Thermal Energy Corp., a joint venture between Ayala’s AC Energy Holdings Inc. and Trans-Asia Oil & Energy Development Corp.
“We’re looking across the country, including possible expansion of current plant that’s being constructed now in Batangas. We’re looking at Visayas and Mindanao. We do know those are the two areas that need new power plants,” Francia said.
He said the Ayala Group was waiting for “acquisition-related opportunities.”
Francia said the conglomerate was hoping the energy business would emerge as a strong contributor to the company’s bottom line in the future.  “Our aspiration is to make it one of the major legs, five to 10 years down the road,” he said.     source

NIA eyes 32 sites for hydro power plants

Written by Chris Sansano Correspondent   Published on 31 August 2012

CAUAYAN CITY, Isabela: A National Irrigation Administration (NIA) official announced that the agency is now going beyond just providing irrigation and has identified 32 sites across the nation that can be fitted with mini-hydropower plants to optimize the use of irrigation water.

Antonio Nangel, NIA administrator, said that the agency has submitted to Japan International Cooperation Agency (JICA) Philippines Office the updated list of potential sites for such development nationwide. JICA visited the pre-identified site in NIA-Magat River Integrated Irrigation System (Mariis) for the preliminary study on a mini-hydropower plant development in an existing irrigation system here.

“We will require no additional water. There will be no consumption of water, no contamination. We will just utilize the energy,” Oshima Kazunari, team leader, stressed during the courtesy call made at the provincial capitol.

The site, known as Magat C, is at the Maris Main Canal Sta. 5 + 069.50 in Barangay San Marcos, San Mateo town, Isabela province. The structure has a head of 3.18 meters and a discharge of 56 cm/second.

The Japanese have developed turbines for low-head structures. Even structures with only two meters have potential for hydropower generation. “Though the potential is small, it is possible to contribute to a community by utilizing untapped energy, stabilizing power supply, and improving quality of life,” Mitsuru Shimizu, JICA consultant leader for the project, said.

Shimizu, who is with the Tokyo Electric Power Services Company, shared that the group has until this year to conduct the preliminary study, and once approved by the government of Japan, construction will start in the third quarter of 2013.

During the stakeholders consultation meeting conducted on August 10, Helsy Bermudez, Mariis acting operations manager, expressed hope for the project to commence as planned, an outlook shared by the municipal officials of San Mateo and Ramon in Isabela province, who were present during the consultation.

If the Magat C project is successful, low-head hydropower plants could be developed in several irrigation canals across the country. The NIA has identified 32 potential sites nationwide.

The project is also in line with the government’s “National Renewable Energy Program” of June 2011, which seeks to triple the country’s renewable energy capacity for energy security, as well as reduce greenhouse gas emissions.

The JICA Mission Team also visited Ifugao for the Likud Mini-hydro project, a mini-hydro project outside an irrigation area. Both Likud and Magat C projects are for possible application to the grant-in-aid facility of the government of Japan for renewable energy promotion to tackle global warming.  

Thursday, August 30, 2012

Ayala sets energy spending

Business World Online 
Posted on August 30, 2012 11:16:40 PM

THE PLAN of Ayala Corp. power unit AC Energy Holdings, Inc. to build a 1,000 megawatt (MW) capacity in five years will cost some $2.5 billion, a senior official of the conglomerate told reporters yesterday.

A WIND TURBINE in Bangui, Ilocos Norte is shown in this undated file photo. Ayala sees renewable energy comprising a fifth of a targeted 1,000 megawatts in the next five years. -- Bw file photo
“Our benchmark is 1,000 MW in the next five years. Total project [sic] cost is about $2.5 billion, of which $500 million will come from equity,” Ayala Corp. Managing Director John Eric T. Francia, who is also the conglomerate’s Corporate Strategy and Development group head, said at the sidelines of the Philippine Stock Exchange’s “Opportunities in the Renewable Energy Sector” Forum at Tower One, Makati City.

He said the conglomerate is looking at both new and acquisition opportunities in the power sector. “Acquisition is more limited in terms of opportunity so we want to do both,” he said.

Mr. Francia clarified that the targeted 1,000-MW capacity refers only to new projects, hence, does not cover acquisitions.

“That’s construction, not on stream… If we are fortunate enough to land some interesting acquisitions, we can exceed that,” he said.

“We’re looking across the country, especially in Visayas and Mindanao -- the two areas need new power plants.”

Conventional energy resources like coal and natural gas will provide bulk of the target capacity, while renewable energy -- much of it from hydro resources -- will account for just a fifth.

“We want to have a balanced portfolio between thermal and traditional load and renewable technology,” Mr. Francia said.

“About 200 MW will be from renewable energy… and it’s gonna be predominantly greenfield hydro power. At least that’s our aspiration,” he added.

He stressed that steps in renewable energy will be measured.

“We’re really pushing hydro. For now, all hydro will be with Sta. Clara (Corp.) -- about 100 MW or so -- where AC Energy will be 70% owner,” Mr. Francia said.

“We’re also keen on wind, but over time. We are not in a hurry. We already have NorthWind,” he added, referring to NorthWind Power Development Corp. which owns and operates the 33-MW wind farm located in Bangui, Ilocos Norte.

“Solar, it really depends. We have predevelopment plan for 30-50 MW, but given the FIT (feed in tariff) rate we need to revisit if it’s feasible -- it is very challenged,” he continued.

Solar energy suffered the biggest cut in proposed FIT rate. The Energy Regulatory Commission last July 27 approved lower-than-proposed FIT rates for four renewable power resources with solar being the most expensive at P9.68 per kilowatt-hour (kWh), but also suffering the biggest reduction from a proposed P17.95/kWh.

The others were: P5.90/kWh (from a proposed P6.15/kWh) for run-of-river hydro; P6.63/kWh (from P7.00/kWh) for biomass; and P8.53/kWh (from P10.37/kWh) for wind.

The FIT rate for ocean thermal energy conversion resource was deferred for further study and data gathering.

AC Energy is being positioned to be a key contributor to Ayala Corp. revenues in five to 10 years, Mr. Francia said.

“Our aspiration is to make it one of the major legs five to 10 years down the road,” he said, recalling “it took Manila Water (Company, Inc.) quite some time to get to where it is today.”

Ayala Corp. reported last Aug. 11 that profits grew 23.7% to P6.1 billion in the first half from P4.93 billion in the same period last year.

Major contributors to the conglomerate’s performance were property unit Ayala Land, Inc. (whose profits rose 28% annually to P4.3 billion); Bank of the Philippine Islands (up 52% to P9.4 billion); Manila Water (31% up to P2.6 billion); and chipmaker Integrated Microelectronics, Inc. (which saw net income more than double to $3.1 million). 

“Hopefully our contributions will be in that order in five to 10 years,” Mr. Francia said.

Shares of Ayala Corp. ended yesterday’s trades at P417.60 each, P4.60 or 1.0895% less than Wednesday’s close of P422.22. -- 
DOR     source

Ayala sets $500-M equity investment for power projects

business mirror


CONGLOMERATE Ayala Corp. is beefing up its power-sector portfolio with a plan to build at least 1,000 megawatts of power-generation capacity in the next five years, Eric Francia, the company managing director, told reporters.
At the sidelines of the Philippine Stock Exchange’s Renewable-Energy Opportunities Forum on Thursday, the Ayala official said the targeted generating capacity would entail $2.5 billion in investments.
Francia added that they have earmarked $500 million as equity for these planned projects.
“The 1,000 MW is our benchmark. If we can exceed that, and if we are fortunate to land some interesting acquisitions, then we can exceed that. But if not, that can be a tall order if it’s all going to be greenfield projects,” he said.
Francia added that one-fifth of the targeted 1,000 MW is expected to be renewable energy-based projects. He said bulk of this target or 100 MW would come from hydropower projects and will be done in partnership with Sta. Clara Power Corp.
Sta. Clara holds several hydropower service contracts in different sites around the country, which could generate a total of 137.5 MW.
Francia said they would also need to revisit their plans for solar-power projects in light of the approved feed-in tariffs (FITs) of P9.68 per kilowatt-hour for solar-based renewable-energy projects.
“We have a pre-development plan for anywhere around 15 MW to 50 MW. But given the approved FIT rate, we need to revisit if it’s going to be feasible,” he added.
Ayala earlier partnered with Mitsubishi Corp. to form PhilNewEnergy Inc., which will build the P7-billion Darong solar-power project in Sta. Cruz, Davao del Sur.
Francia said Ayala will also look at wind-power projects under Northwind Power Development Corp. 
Ayala-led Michigan Power Inc. has acquired half of NorthWind for P512 million.
Francia said they want to have a balanced portfolio between conventional power systems and renewable energy-based systems.
He added that they are also proceeding with expansion of the 135-MW coal project in Batangas under South Luzon Thermal Energy Corp., a joint venture between Ayala-led AC Energy Holdings Inc. and Trans-Asia Oil & Energy Development Corp.
“We’re looking at across the country, including the current plant that is being constructed now in Batangas.  We’re also looking at the Visayas and Mindanao. We do know those the two areas need new power plants,” Francia said.
He added that undertaking an initial public offering of Ayala’s power portfolio might take a long time, saying that it may not be in the immediate future.
Francia said they plan to make the energy business a strong contributor to their overall bottom line. “Our aspiration is to make it one of the major legs in five to 10 years down the road,” he added.    source

Consumers to bear cost of power generation a little longer

business mirror


CONSUMERS will have to shoulder the National Power Corp.-Small Power Utilities Group’s (Napocor-Spug) costs in generating electricity in remote areas for a much longer period.
This, as the Energy Regulatory Commission (ERC) allowed the Napocor-Spug to collect from the universal charge for missionary electrification (UCME) the remaining P508.03 million and P3.64 billion for its generation rate adjustment mechanism (Gram) and incremental currency exchange rate adjustment (Icera), respectively.
In August last year, ERC allowed Napocor-Spug to collect from the UC-ME the other P508.03 million and P3.64 billion, respectively.
The ERC said these adjustments will suffice Napocor-Spug’s fuel expenses and incremental foreign exchange payments in 2006-2009.
“While the Gram and Icera are supposed to translate to P1.2532 per kilowatt-hour (kWh) and P0.1750/kWh, respectively, consumers can expect the current UCME to be collected from them for a much longer period,” Francis Saturnino Juan, ERC executive director and spokesman, told the BusinessMirror in a phone interview.
He said consumers will only have to pay the current UCME rate of P0.0709/kWh until the Napocor-Spug fully recover its fuel costs and foreign-exchange payments. The current rate is exclusive of the true cost generation rate (TCGR) of P0.0454/kWh.
To date, Napocor-Spug collects a UCME of P0.1163/kWh from consumers.
Napocor-Spug said the P0.0709/kWh provisional authority only covers about 24 percent of the total applied UCME adjustment of P17.1 billion.
Napocor-Spug is mandated under the Electric Power Industry Reform Act, or Epira to provide power generation and its associated power delivery systems in areas that are not connected to the transmission system in Luzon, the Visayas and Mindanao.
Napocor-Spug operates 157 power plants with a combined capacity of almost 200 megawatts in far-flung islands that are not connected to any of the main grids.     source