Manila Standard Today
By | May. 29, 2014 at 12:01am
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Unreliable partner
The state is proving to be an unreliable partner of the private sector in building critical power plants in the country. Meralco PowerGen Corp., a unit of retailer Manila Electric Co., has learned this lesson, which may prove costly to the Philippine economy.
Its planned 600-megawatt coal-fired plant in Subic, through Redondo Peninsula Energy, remains stuck in a legal battle and has been on the burner since 2010. The plant would have been online by 2015 or 2016, just in time to help stabilize the Luzon grid.
It takes about 36 to 42 months to complete a power plant and the Luzon grid will require 600 MW of new capacity every year starting 2015 to meet the rising electricity demand. In comparison, MGen took only five months to complete the acquisition of an 800-MW gas-fired power plant in Singapore.
Meralco chairman Manuel V. Pangilinan, or MVP, has noted government’s indifference toward the the construction of power plants in the Philippines. In a speech during the recent 23rd World Economic Forum on East Asia, MVP said the government must provide a clearer and more realistic policy on the country’s power generation requirements to guide investors in the sector, as Luzon faces a “very tight” power-supply situation.
Guillermo “Bill” Luz, co-chairman of the National Competitiveness Council, the agency tasked to advance the country’s global competitiveness, meanwhile, assured MVP that the administration was stepping up efforts to improve the business environment in the country, adding the government had started to trim the number of signatures, permits and other documents required to approve power plant projects.
Power producers say close to 150 permits were needed to put up an infrastructure project such as a power plant.
State support needed
Energy Secretary Carlos Jericho Petilla has finally conceded the need for state support in promptly issuing permits for qualified prospective projects. “Actually, we would like to ask lawmakers to come up with a bill that will hasten the construction stage... because these projects affect national interest,” he said.
The strain on power plants during the dry season has highlighted how the Philippines’ underperforming electricity sector threatens the country’s economic growth.
Aboitiz Power Corp. top honcho Erramon Aboitiz has sounded the alarm bells. “It’s time to worry. New plants are being delayed and reserves are really down. Investors are always forward-looking and when they see projections of a potential power problem, they’ll decide to put their investments somewhere else.” source
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