Friday, July 31, 2015

PEMC to assess Mindanao readiness for WESM integration

Manila Times
August 31, 2015 11:31 pm

The Philippine Electricity Market Corp. (PEMC) will assess whether Mindanao is ready for integration into the Wholesale Electricity Spot Market (WESM), which would allow the optimal dispatch of all existing resources throughout the three main grids of the country.
As directed by the Department of Energy (DOE), PEMC launched the interim electricity market in Mindanao during the latter part of 2013.
Although August marks the 21st month of full commercial operations, the market was placed under intervention in February last year, effectively halting its operation.
PEMC President Melinda Ocampo said the temporary pause has turned into an opportunity for PEMC and the DOE to thresh out technical and commercial issues with the National Grid Corp. of the Philippines (NGCP), Power Sector Assets and Liabilities Management Corp. (PSALM) and Interim Mindanao Electricity Market (IMEM) participants.
With the anticipated arrival of new generation capacity in the region, PEMC also expects supply in the grid to stabilize soon.
“Once this becomes certain, PEMC will be able to conduct an assessment of Mindanao’s readiness for WESM integration,” said Ocampo.
Based on DOE data as of last March, committed rated capacity in the region stood at 1,951 megawatts (MW), comprising plants scheduled to commercially operate within the next three years.
To support these approaching changes in the WESM, Ocampo said PEMC has taken necessary steps to improve the market infrastructure, including development of the new Market Management System (MMS), targeted to be deployed in 2017.
The new MMS, which will replace the market’s decade-old infrastructure, will primarily address hardware obsolescence.
“But beyond this, it will also implement upcoming changes in market design to accommodate RE preferential dispatch, the reserve market, and third party audit recommendations,” she said.
Ocampo also shared PEMC’s continuous efforts to improve as an organization.
In April 2014, PEMC began to implement a Quality Management System, merging it with its existing Information Security Management System, which has been ISO- certified since 2011.
In December last year, its QMS underwent certification audit, which PEMC successfully passed, culminating in a celebration last March when the organization was officially handed its certificate of ISO accreditation.
PEMC also started a project to harmonize its integrated management system with its Enterprise Risk Management Program.
The goal is essentially to ensure a cohesive framework when it comes to managing risks and uncertainties confronting both PEMC and the WESM.
Ocampo said results of the harmonization will be finalized this year. source

P40-B bank loan for Quezon coal plant almost final

Business Mirror
by Lenie Lectura - August 31, 2015

THE P40-billion bank loan of the joint venture of Meralco PowerGen Corp. (MGen) and Thailand’s New Growth BV is almost final. The loan will partly finance the 455-megawatt (MW) coal-power plant in Mauban, Quezon.

“We are very near closing. We expect to sign mid-September with a consortium of five banks. There will be two mandated colead arrangers,” Manila Electric Co. (Meralco) Chief Financial Officer Betty Siy-Yap said in a text message.

The financial closure for the project was supposed to take place last month but Yap said last week that the joint venture, San Buenaventura Power Ltd. Co. (SBPL), was still finalizing the number of lender banks.

“For now, it’s five banks but we need to address one last item. If we get that done, then that’s five. If the transaction is not done by the time of the signing, then it will be four banks,” Yap said. She declined to identify the local banks “until we have finalized it.” The loan, she added, will have a term of 12 years.

MGen is the power-generation arm of Meralco. New Growth BV is a wholly owned subsidiary of Electricity Generating Public Co. Ltd. of Thailand. Meralco will source part of its power requirement from SBPL. A power-supply agreement between SBPL and Meralco was earlier approved by the Energy Regulatory Commission. The Mauban coal-power project will serve as an expansion of the 460-MW Quezon power plant, which started commercial operations in 2000. The existing plant serves the Luzon grid under a 25-year power-supply deal with Meralco. The financial closure is an essential component of the power project. MGen is also working on to award an EPC (engineering, procurement and construction) contract.

Construction is scheduled to start this year, while commercial operation is set at end-2018 or early 2019.

The Meralco group is also keen on bringing in more major power-generation projects.

MGen and other partners are also expected to raise “higher than P40 billion” for another power project.

Redondo Peninsula Energy Inc. , a joint venture among MGen, Aboitiz Power Corp. and Taiwan Cogeneration Corp., is putting up a 600-MW coal plant in Subic, Zambales.

Besides these two projects, MGen is also working on a 1,200-MW Atimonan plant in Quezon.

The company is also in talks with Japanese firms for a potential 1,500-MW liquefied natural gas project.

With three major projects in the pipeline, MGen expects to build a 3,000-MW portfolio.

“The three alone are more than 2,200 MW. We also have attributable interest in Global Business Power Corp. [GBPC], so 3,000 MW is quite achievable,” Meralco Chairman Manual Pangilinan said. MGen is also part of GBPC through its 22-percent interest. GBPC owns two 82-MW plants in La Paz, Iloilo City.

With all these projects, Pangilinan said MGen’s “plate is already full…. From the working numbers, the investments are fairly sizable.” source

WESM market breaches rising

By Danessa O. Rivera (The Philippine Star) | Updated August 31, 2015 - 12:00am

MANILA, Philippines - The operator of the country’s electricity spot market has unearthed 1,600 cases of breaching market rules by withholding supply since the controversial power rate spike three years ago.

The Wholesale Electricity Spot Market (WESM) has seen a significant increase in the number of cases from last year up to the first half of this year, Philippine Electricity Market Corp. (PEMC) president Melinda Ocampo said.

“This is a testament to the market’s determination to strengthen its monitoring and enforcement processes with a view to promote accountability and foster a culture of compliance,” Ocampo added.

The spike in number of cases resulted from the monthly endorsement by the market surveillance committee (MSC) of requests for investigation (RFIs) to the enforcement and compliance office (ECO).

“As of June 2015, the ECO has received 1,611 RFIs since February 2014,” she said.

Ocampo said most of the cases involved violation of the must offer rule and real time response.

The must offer rule requires generation companies registered in the WESM to declare and offer the maximum generating capacities of their plants in the spot market.

The rule is to prevent power plants from withholding energy and pushing prices upward, as well as to ensure energy sufficiency by making all available generation capacities in the spot market.

This is the same case filed against AboitizPower subsidiary Therma Mobile Inc., PANASIA Energy, Inc. and the Power Sector Assets and Liabilities Management Corp. (PSALM).

PEMC imposed penalties on these companies, which are among the at least 11 companies found to have breached the WESM rule on the must offer during the November and December 2013 period.

Therma Mobile owns and operates four power barges in Navotas City with combined rated capacity of 234 megawatts (MW) while PANASIA owns a 540-MW diesel plant. On the other hand, PSALM owns the 140-MW Casecnan hydro plant and 650-MW Malaya thermal plant.

However, in the case of Therma Mobile, the Pasig Regional Trial Court Branch 157 has stopped PEMC from collecting the P234.9-million penalty on the Aboitiz unit.

Ocampo said PEMC has already elevated the case to the Court of Appeals.

“It’s now pending. We’re waiting for the CA decision,” she said.

AboitizPower had said Therma Mobile did not withhold any capacity as it was physically impossible for its unit to transmit more than 100 MW to Manila Electric Co. (Meralco) from its power barges. source

Thursday, July 30, 2015

Semirara Mining mulls new safety protocols

By: Doris Dumlao-Abadilla
Philippine Daily Inquirer
04:52 AM July 30th, 2015

LIGHTNING STRIKES TWICE  File photo shows the Semirara open-pit coal mine where five workers went missing and never found after a landslide in February 2013. A similar episode happened on Friday at the same site in the DMCI-owned Semirara Mining and Power Corp in Antique. RAFFY LERMA
LIGHTNING STRIKES TWICE File photo shows the Semirara open-pit coal mine where five workers went missing and never found after a landslide in February 2013. A similar episode happened on Friday at the same site in the DMCI-owned Semirara Mining and Power Corp in Antique. RAFFY LERMA

Hit twice by a deadly landslide in its coal mine in Antique in a span of two years, Consunji-led Semirara Mining and Power Corp. is devising new mining safety protocols for the rainy season and acquiring a new radar to detect slope stability.
These are among the new measures that Semirara is working on to prevent mining accidents in the future, Isidro Consunji, chair and president of Semirara’s parent conglomerate DMCI Holdings told stockholders on Wednesday.
Consunji said that Semirara would add de-watering wells to improve its drainage system and install more “piezometers,” devices that measure water pressure or water levels below the earth’s surface.
“These are a few things that we are working on with DOE (Department of Energy) to prevent accidents from happening,” Consunji said in his report to stockholders.
Suspended operations
Since the latest mining accident in the Panian pit occurred on July 17 that killed nine people, Semirara suspended the operations of all its mining sites, even those in areas not affected by the landslide. It also stopped its coal exports even as at the time of accident, there was a stockpile of 800,000 tons of coal. The stockpile has now gone down to 500,000, which is good for a month’s worth of
Semirara produces 800,000 tons of coal per month valued at around P1.6 billion. The Consunjis are hoping the suspension order on the affected mine site will not be in place for a long time. In the 2013 accident, operations were suspended for a little over one month.
Consunji also disclosed that Semirara had already purchased a new slope stability radar (SSR) but the accident unfortunately happened before it was delivered.
Semirara purchased the SSR from Australian technology provider GroundProbe for $500,000 plus an annual maintenance fee of $70,000. This new equipment was scheduled to be handed over to Semirara on Thursday.
Revolutionary technology
According to GroundProbe, SSR is a “revolutionary technology” that would assist mining productivity and safety especially in open pit mines. Strategically positioned radars detect and prewarn of slope instabilities that could endanger operating personnel and equipment and disrupt operations.
Based on GroundProbe’s website, SSR uses a new antenna technology which scans 180 degrees of a mine every two minutes, allowing mine personnel to work in large areas of their mine.
The low profile antenna technology detects sub-millimeter movement anywhere on the wall slope, allowing mine operators to accurately detect and predict future collapses, even in high wind operations.
Previously, Consunji said Semirara was using a robotics system that identified slope movements on the top but was unable to detect movements at the bottom.
On mining protocols, Consunji said there should be a different system for the wet and dry seasons. For the rainy season, redundancy systems will be strengthened alongside new measures to prevent loss of lives in cases of landslides, he said.
Preventing loss of life
“No matter what you do, you can’t prevent landslides,” Consunji said.
Asked what the government had asked Semirara to do, he said: “government just wants to make sure that we create steps to prevent loss of life.”
With the Panian mine about to deplete its reserves in one and a half years, Semirara is now working on a new mining site, the Narra mine, which is expected to be in full production by the middle of next year, Consunji said.
Meanwhile, Consunji said Semirara was at varying stages of coal exploration, planning and development at Bobog pit, West Panian area and Himalian area, all in Semirara Island.
In 2014, Semirara spent P1.57 billion for some advance stripping and mine development. source

DMCI expects 6-month profit to grow by 17%

By: Doris Dumlao-Abadilla
Philippine Daily Inquirer
12:32 AM July 30th, 2015

Conglomerate DMCI Holdings Inc. likely posted a six-month net profit of P6 billion, suggesting a year-on-year growth of about 17 percent.
DMCI president Isidro Consunji told reporters after the company’s annual stockholders meeting yesterday that Semirara Mining and Power Corp. would likely deliver P4.5 billion in net profit for the first six months of the year.
Consunji said the conglomerate was still on track to hitting its full-year core net profit goal of P12 billion, as earnings in the first six months was projected to hit P6 billion. However, DMCI has yet to price in the financial impact of the July 17 landslide that occurred at the northern edge of the Panian mine on Semirara Island in Antique. This is seen affecting results in the second semester.
The operations at Panian and DMCI’s other mining sites were suspended following the tragic accident. It also stopped its coal exporting operations.
“We’re hoping that the (government) suspension won’t take too long,” Consunji said. When a landslide occurred in Panian in 2013, operations were suspended for more than one month.
Coal mining contributes about 46 percent of Semirara’s earnings and about 20 percent of DMCI’s total earnings. In 2014, SMPC’s consolidated profit dipped by 5 percent to P7.1 billion. When Semirara stopped coal exportation, Consunji said it had about 800,000 tons of stockpiled coal. This, however, has gone down to 500,000 tons, equivalent to a one month inventory, valued at P1 billion.
Because the landslide was due to force of nature, Consunji said Semirara would not be penalized by buyers for unserved foreign supply contracts.
In his report to stockholders, Consunji said DMCI would capitalize on its track record in building complex structures by actively pursuing public-private partnership (PPP) and power plant projects to boost domestic infrastructure quality.
“SMPC and its subsidiaries will expand their coal and power operations to serve the growing demand for fuel and electricity in the Philippines,” Consunji said.
Commercial operations of a low-grade coal-fired 2x150MW (megawatts) power plant is expected to commence by yearend while talks are under way to build a 2x350MW power facility. For the latter, DMCI expects to own 50 percent, suggesting an additional attributable power generation capacity of 350 megawatts.
As such, DMCI expects to have 650 MW in annual power generation capacity in four to five years, summing up the two units of 150MW power plants that will run this year and half of the capacity (representing its attributable ownership) of the upcoming new plant in Calaca.
“We intend to sign the EPC (engineering, procurement and construction) contract by end of the year,” Consunji said, adding that DMCI had found a partner to take up the other half of the 2x350MW power project. He, however, did not identify the partner.
He said the project was worth more than $1 billion and would likely be operational 42 months after the EPC signing. source

ABCI streamlines investment in bunker-fired power projects

Manila Bulletin
by Maricel Burgonio
July 30, 2015

A Brown Company, Inc.(ABCI) said it selling its interest in Peakpower Bukidnon, Inc. (PBI) to its associate Peakpower Energy Inc.(PEI).

In a disclosure to the Philippine Stock Exchange (PSE), the ABCI said the sale will streamline the company’s investment in power sector engaging in bunker-fired power projects.

It will consolidate all peaking projects under one holding company, PEI.

It will be selling its 100 percent interest or 2,500,000 shares in PBI to its associate PEI at par value of P1.00 per share.

“The amount of consideration for the sale of 100% interest in PBI is P2.5 million,” ABCI said.

ABCI is primarily engaged in the business of real estate development located in Cagayan de Oro City and Initao in Misamis Oriental; Cainta, Rizal; and Valencia City, Bukidnon; and Butuan City, Agusan del Norte.

ABCI, through its subsidiaries, also ventured into oil palm nursery and seedlings distribution, palm oil milling, operation of hotels, real estate brokerage, power generation, and investment in gold mining assets.

Its subsidiaries include A Brown Energy and Resources Development, Inc.; Brown Resources Corp.; Palm Thermal Consolidated Holdings Corp.; and Hydro Link Projects Corp., while affiliates include Masinloc Consolidated Power, Inc.; Peakpower Energy, Inc.; Monte Oro Resources & Energy, Inc.; and Phigold Ltd. source

DMCI confident on hitting P12.7-B profit goal

By Iris C. Gonzales (The Philippine Star) | Updated July 30, 2015 - 12:00am

MANILA, Philippines - The Consunji-led DMCI Holdings Inc. is hopeful of meeting its P12.66 billion net income target for the year, according to its top official.

On the sidelines of the company’s annual stockholders meeting yesterday, DMCI chairman and president Isidro A. Consunji said first half core unaudited net profit was estimated at P6 billion on the back of the strong performance of its power, real and water businesses.

However, DMCI has yet to report the final figures, he said.

In his message to stockholders, Consunji said while the company is facing challenges, with construction and power businesses’ performance at below expectations last year, the rest of the group’s companies delivered exceptional results.

Nevertheless, he said the group would continue its efforts to further improve its financial position which has led to economic growth, more jobs and better living conditions for millions of Filipinos.

In the area of power, Semirara Mining & Power Corp., the Philippines’ biggest coal miner, is building its power capacity to 1,200 megawatts in the next three to four years, he said.

“It will be around 1,200 MW in 42 months. Semirara will add at least 650 MW of capacity in the next four to five years,” he said.

Semirara is also building a 300 MW power plant in Batangas.

“The new 2x150 MW power units are expected to operate and start contributing to group earnings by 2015. Last week, we were able to ramp up generation of the first unit to 117 MW. The second unit is now on a trial run,” he said.

Consunji said the company is also in discussions for another 2x350 MW plant within the Calaca complex. It wants to supply all the coal needs of its expanding power generation portfolio.

Semirara halted its exports of coal to ensure supply for local power generation following the suspension of its mining operations in Antique after a deadly landslide last July 17. source

Wednesday, July 29, 2015

DMCI hikes net profit to P6b

Manila Standard Today
By Jenniffer B. Austria | Jul. 29, 2015 at 11:40pm

DMCI Holdings Inc. of the Consunji family said Wednesday first-half net income reached P6 billion, up 17 percent from P5.13 billion year-on-year.

DMCI president Isidro Consunji said in an interview at the sidelines of the annual stockholders’ meeting that coal mining and power generation unit Semirara Mining and Power Corp. registered a first-half net profit of P4.5 billion, nearly 70 percent up from P2.65 billion on year.

Consunji said the company was on track meet its P12.5-billion to P13-billion net income target for 2015.

He said the company was keeping net income target for meantime, despite the temporary shutdown of Semirara’s coal mining operations following a landslide accident that killed 9 people,

Consjuni said Semirara had 500,000 tons of stockpile worth P1 billion, or good for one month of consumption.

“We hope to be able to resume operations before our stockpile runs out,” Consunji said.

Semirara, however, stopped its coal exports because of the shutdown ordered by the Energy Department.

Consunji said the company asked the Energy Department to clarify an order to “stop coal operations in affected areas” because other sectors in the Semirara mine operations were not affected by the landslide.

“Only the north Panian or the block 5 is affected. Other areas like Narra is not affected. So we want the Energy Department to clarify,” Consunji said.

Semirara has undertaken steps to prevent a similar situation from happening again in the future.

Semirara has purchased a slope stability radar from Austalia to monitor slope conditions in the mine areas and installed dewatering wells.

On the controversial Torre De Manila, the condominium project of DMCI’s real estate unit DMCI Homes, DMCI said it was confident the Supreme Court would uphold the company’s position.

Consunji said DMCI Homes secured all the required permits from the government and complied with all the laws before building Torre de Manila.

“There is also no law that defines or regulates visual corridors. And since Torre De Manila is over 800 meters behind the Rizal Monument, finding unobstructed angles when taking photos of, or with, the monument could be easily done,” Consunji said.

“To say, therefore, that Torre De Manila violated heritage laws or that it ruins the vista of the Rizal Monument is unfounded and recklessly false. It is an urban solution not a public nuisance,” he added.

Several groups are protesting the construction of the condominium building, saying it ruins the view of Jose Rizal’s monument in Manila. source

China, US seek ‘clean coal’ pact as industry struggles

BusinessMirror - August 29, 2015

BILLINGS, Montana—United States and China officials took a major step on Tuesday toward an agreement to advance “clean coal” technologies that purport to reduce the fuel’s contribution to climate change—and could offer a potential lifeline for an industry that’s seen its fortunes fade.

The agreement between the US Department of Energy and China’s National Energy Administration would allow the two nations to share their results as they refine technologies to capture the greenhouse gases produced from burning coal, said Christopher Smith, the Energy Department’s assistant secretary for fossil energy.

Terms of the deal were finalized late on Tuesday. Officials said it would be signed at a later date.

Smith spoke after he and other senior officials from President Barack Obama’s administration met with representatives of China’s National Energy Administration during an industry forum in Billings. The discussions took place near one of the largest coal reserves in the world—the Powder River Basin of Montana and Wyoming, where massive strip mines produce roughly 40 percent of the coal burned in the US. But clean-coal technologies are expensive, and efforts to develop them for commercial use have struggled to gain traction in the US. Some critics describe clean coal as an impossibility and say money being spent on it should instead go toward renewable energy.

China leads the world in coal use. It produces and consumes about 4-billion tons annually, four times as much as in the US. Shi Yubo, vice administrator of China’s energy agency, told delegates to the forum that coal will continue to play a role in China’s developing economy. “But we need to pay special attention to developing clean-coal technology,” he added through an interpreter. Shi said China was seeking to develop more demonstration projects that capture carbon to prevent it from escaping into the atmosphere. He acknowledged that efforts to put the greenhouse gas to beneficial use “are still far behind.” Meanwhile, the US coal industry has suffered a beating in recent months, with major mining companies going bankrupt.

The Interior Department is proposing hikes on coal royalties and possibly lease payments for publicly owned reserves of the fuel in areas, such as the Powder River Basin. Also, cheap natural gas is squeezing out demand for coal, and Obama has made reductions in carbon dioxide emissions from coal-fired power plants a key component of his climate policy.

“You’ve got to develop wind and solar and develop nuclear, but you also have to deal with the challenge of reducing the greenhouse gas impacts of coal-fired power plants,” Smith told the Associated Press. “It’s positive if those projects [to capture carbon] get built here. It’s positive if those get built in China and India and Europe and around the world.” source

Water, climate, energy linked to fight vs poverty in Central America

Business Mirror
by Inter Press Service - August 29, 2015

MANAGUA—Central America’s toolbox to pull 23 million people—almost half of the population—out of poverty must include three indispensable tools: universal access to water, a sustainable power supply and adaptation to climate change.

“These are the minimum, basic, necessary preconditions for guaranteeing survival,” VĂ­ctor Campos, assistant director of the Humboldt Centre, a leading Nicaraguan environmental think tank, told Inter Press Service (IPS).

These three tools are especially important for agriculture, the engine of the regional economy, and particularly in rural areas and indigenous territories, which have the highest levels of poverty. Campos said this is the minimum foundation for starting to work “toward addressing other issues that we must pay attention to, like education, health, or vulnerable groups; but first these conditions that guarantee minimal survival have to be in place.”

In Central America today, 48 percent of the population lives below the poverty line. And the region is facing the Post-2015 Development Agenda, which the international community will launch in September, with the concept of survival very much alive, because every day millions of people in the region struggle for clean water and food.

Everyone agreed on the vulnerability of the region and its people at the Central American meeting “United in Action for the Common Good,” held on August 21 in the Nicaraguan capital to assess the Post-2015 Development Agenda and the Sustainable Development Goals (SDGs).

The 17 SDGs are the pillar of the agenda and will be adopted at the a September 25 to 27 summit of heads of state and government at the United Nations headquarters in New York, with a 2030 deadline for compliance. The issues of reliable, sustainable energy, availability and sustainable management of water, and urgent action to combat climate change and its impacts are included in the SDGs. But the experts taking part in the gathering in Managua stressed that in this region, the three are interlinked at all levels with the goal of reducing poverty.

“In our countries, our fight against poverty is complex,” Campos said. This region of 48 million people, where per capita gross domestic product is far below the global average—$3,035 in Central America compared to the global $7,850—needs to come up with new paths for escaping the spiral of poverty, which entraps nearly one out of two inhabitants.

According to the 2012 report “The Economics of Climate Change in Central America” by the UN Commission for Latin America and the Caribbean, “reduction of and instability in the availability of water and of agricultural yields could affect labor markets, supplies and prices of basic goods, and rural migration to urban areas.”

That would have an impact on subsistence crops like maize or beans or traditional export products like coffee, which are essential in the region made up, from south to north, of Panama, Costa Rica, Nicaragua, Honduras, El Salvador, Belize and Guatemala. (UN agencies also include the Dominican Republic, an island nation, in the region.) source

Semirara to build 1,100 MW coal-fired power capacity

Business World Online
Posted on July 29, 2015 09:52:00 PM

SEMIRARA Mining & Power Corp., the country’s biggest coal miner, said on Wednesday it expects to bring on stream 1,100 megawatts (MW) of power capacity in the next three to four years, offering a market for its expanding coal mining business.

A RARE cloud-free view of the northern end of Semirara Island is seen in this photograph released by the NASA Earth Observatory in April 2010. The northern part of the island is dominated by the Panian Coalfield, the largest of three coalfields on the island. That coalfield is being mined using open-pit methods. -- AFP
The Philippines is counting on dozens of coal-fired power plant projects now in the development stage to meet soaring electricity demand and help the country avoid a power crisis.

Semirara Chief Executive Isidro A. Consunji said plans were underway to build a 700 MW power facility, while a 300 MW plant was scheduled to begin commercial operations in the main island of Luzon this year.

Semirara, a unit of conglomerate DMCI Holdings, Inc., produces about 8 million tons of coal a year and ended the first quarter with a generating capacity of 74.1 MW at one plant, which it said could be expanded to 200 MW.

The company will supply all of the coal needs of its expanding power generation portfolio, Mr. Consunji said, providing an income boost for DMCI, which is also engaged in nickel mining, road construction and real estate development.

Semirara normally exports some of its coal to China, but has halted exports to ensure supply for local power generation following the suspension this month of its mining operations in central Philippines after a deadly landslide.

It plans to operate a second coal mine in the same region at full capacity in 2016 and is looking to develop a third.

On the sidelines of DMCI’s shareholder meeting yesterday, Mr. Consunji said the parent firm is sticking to its profit guidance on hopes the suspension on Semirara mine will be lifted soon.

DMCI’s unaudited net income attributable to shareholders stood at “approximately P6 billion” in the January to June period, he said.

That represents a 17% growth from the P5.128 billion reported a year ago.

“We said we’ll grow 20% this year [from P10 billion] so we’re on track,” he said.

The holding firm has yet to quantify the possible impact of the suspension on Semirara’s financial performance, Mr. Consunji said.

Coal operations currently account for 46% of Semirara and 20% of DMCI.

Semirara has a coal stockpile of 500,000 tons worth about P1 billion, which may be good for a month, he said, with monthly coal production hitting 800,000 tons worth P1.6 billion.

DMCI Mining Corp., the conglomerate’s ore mining subsidiary, is exploring the viability of a downstream processing facility to raise the value of its nickel exports.

“The problem is nickel prices are down. All commodity prices are down. At these prices, it is not viable,” Mr. Consunji said.

Nickel prices should hit $14,000 per metric ton (MT) before the project becomes viable, Mr. Consunji said. Nickel prices are currently at $11,000 per MT.

Cost of the plant will depend on what technology will be used, Mr. Consunji said, noting that an investment on a blast furnace will cost $40 million, while high-pressure acid leach (HPAL) facility will entail an investment of $1 billion.

DMCI shares fell 22 centavos or 1.83% to P11.80 apiece, while Semirara shares rose 50 centavos or 0.42% to P119 each yesterday. -- main report from Reuters, with Krista Angela M. Montealegre source

DoE studying viable geothermal locations for offer to investors

Business World Online
Posted on July 29, 2015 07:56:00 PM
By Claire-Ann M. C. Feliciano, Senior Reporter

THE DEPARTMENT of Energy (DoE) is evaluating geothermal energy sites that can be offered to investors for development and utilization, an official told reporters in Pasig City yesterday.

Balut Island, a site with potentially exploitable geothermal resources. --

Mario C. Marasigan, director of the agency’s Renewable Energy Management Bureau, said the DoE is looking at “low enthalphy” and conventional resources that can produce geothermal energy on a commercial basis.

Low enthalpy resource areas, unlike conventional geothermal sites, have temperatures lower than 250 degrees celsius.

“There are a lot of low enthalpy areas but we have to identify which ones are viable for development,” Mr. Marasigan said on the sidelines of a conference organized by the National Geothermal Association of the Philippines.

“We are conducting resource assessments so that we will have something to offer to the private sector,” Mr. Marasigan added, noting viable areas will be offered via an open competitive and selection process (OCSP).

The official said the DoE, so far, has identified two areas -- one in Balut Island in Mindanao and Tingloy in Batangas.

While he acknowledged that there have been certain attempts in the past to offer Balut Island, Mr. Marasigan said further studies have to be conducted to prove the prospect area’s feasibility.

“There’s no market in the area because the customers don’t consume so much electricity,” he said.

“But it’s still being considered for further exploration because there could be significant resource and costs may be justified,” Mr. Marasigan said, noting costly transmission facilities may be built to dispatch power from the island to the off-taker.

These two areas, together with conventional resource prospects and cancelled service contracts, will be offered under the next round of OCSP

“The next round will include geothermal contracts that can be cancelled. We are continuously assessing the progress of the contracts,” Mr. Marasigan said.

The same official said that the next OCSP will not take place this year.

“We still have to package the areas for offer. Similar to the current OCSP, there will be a series of activities and regional consultations to discuss possible issues,” he added.

The DoE has yet to wrap up the second OCSP, which was launched earlier this year.

Last May, the DoE received eight offers for two geothermal concession areas that were auctioned off. It also obtained 31 offers for 14 hydropower prospects.

New contracts are scheduled to be awarded to the winning bidders on Sept. 4.

The first round of OCSP was conducted by the Energy department in 2009, during which it awarded eight geothermal service contracts.

During yesterday’s conference, DoE Officer-in-Charge for the Secretary Zenaida Y. Monsada noted that the Philippines remains the second largest geothermal energy producer in the world, next to the United States.

Geothermal energy accounts for about 14% of the Philippine power generation mix.

“The challenge is to maintain this share with the increasing power demand,” Ms. Monsada said in her speech.

She noted that among the efforts being done by the DoE is the preparation for the next OCSP.

“We are preparing for the next OCSP but we’re also encouraging developers to come to us for the granting if new geothermal service contracts,” said Ms. Monsada.

She also urged developers to continuously look for practical solutions and innovations to support the geothermal sector. source

Meralco unit investing $1.2 B for 3 coal plants

By Danessa O. Rivera (The Philippine Star) | Updated July 29, 2015 - 12:00am

MANILA, Philippines - The power generating unit of Manila Electric Co. (Meralco) is putting in $1.2 billion in equity to develop three coal-fired power plants in Luzon, two of which are being built with partners.

Meralco CFO Betty Siy-Yap said Meralco PowerGen Corp. (MGen) is currently working on three power projects: the 455-megawatt (MW) San Buenaventura Power Ltd. (SBPL) project in Quezon; the Redondo Peninsula Energy (RP Energy) project in Subic, Zambales and the 2x600 MW Atimonan One Energy project in Quezon.

“The two projects (SBPL and RP Energy), we clearly have partners. For Atimonan, in the meantime, we’re developing it as 100 percent,” she said.

SBPL is a joint venture of MGen with New Growth B.V., a wholly-owned subsidiary of Thailand’s Energy Generating Co.

On the other hand, RP Energy is a consortium composed of MGen, Aboitiz Power Corp. and Taiwan Cogeneration International Corp.

“So on that basis of 30 percent debt and 70 equity project finance and two project where we’re taking majority, the estimate is about, on equity alone, $1.2 billion,” Siy-Yap said.

In May, Meralco president Oscar Reyes said nearly P100 billion will be borrowed by MGen and its partners this year to move the Subic and Quezon power projects to financial close within the year.

For the SBPL project, MGen executive vice president Aaron Domingo said financial close for the project is targeted “some time this third quarter.”

He said site preparation works are ongoing after awarding the engineering, procurement and construction (EPC) contract to a consortium of Korean and Japanese contractors and equipment suppliers.

The 455-MW coal-fired project is targeted for completion in early 2019.

For the RP Energy project in Subic, Domingo said it is still being evaluated if it would have a capacity of 300 MW or 600 MW.

Target commencement of construction is in the first quarter of 2016 and would be completed by the second half of 2019.

Atimonan One Energy, on the other hand, is awaiting the release of the environmental compliance certificate (ECC) within this quarter, Domingo noted.

The project is also now in the process of tendering the EPC contract, where an EPC contractor will be selected by next year.

“The target completion of the first unit is in late 2020,” Domingo said. source

Belgium firm targets solar hybrid projects in off-grid locations

By Danessa O. Rivera (The Philippine Star) | Updated July 29, 2015 - 12:00am

MANILA, Philippines -Belgium-based Enfinity sees vast potential in putting up solar-hybrid power projects in off-grid areas in the country, particularly in National Power Corp’s Small Power Utilities Group (SPUG) areas, which will provide cheaper electricity costs than relying solely on diesel-fired generating facilities.

In a statement, Enfinity Asia Pacific Holdings Ltd. business development director William Ruccius said solar hybrid deployment along SPUG areas would provide a cost-competitive solution for off-grid areas.

“Napocor has 280 SPUG power plants. They range in size from 0.04-megawatt to about 10 MW,” he noted.

Currently, these off-grid areas source their electricity from diesel-fired power generating facilities that tend to be more expensive.

With hybrid solar and battery storage system as back-up technology, Enfinity noted these areas could opt for less costly solution while also lessening their carbon footprints.

Ruccius said the true cost of generation rate (TCGR) in these areas typically range from P14 to P45 per kilowatt hour, and electricity is just being made available to them eight to 16 hours a day.

The electricity cost is also covered by subsidies being paid by all consumers.

But as cheaper alternatives such as hybrids will be provided, the level of subsidy for SPUG areas may also be reduced, the company said.

Dr. Platon Baltas of Enfinity Hellas said photovoltaic (PV) prices are expected to drop even more, which should be taken advantage of.

He added “hybrids can provide 24/7 service at affordable cost for houses connected to ‘bad’ electricity grids.”

In the Philippines, however, Baltas said “financing is the biggest challenge if the appropriate framework is not in place.”

There are also still some commercial and market risk issues that need to be addressed in the regulatory and policy frameworks of the industry before hybrid solutions can become viable in these areas, Ruccius added.

In particular, he cited the credit-worthiness predicament of many electric

cooperatives, including those that have been catering to the service needs of the SPUG areas.

“The problem here is that many electric cooperatives are not credit-worthy and it is difficult to get paid. The qualifying third party provides the generation and also takes over the distribution function, so it collects the money and pays itself,” Ruccius said. source

Tuesday, July 28, 2015

Solar-hybrid option seen to resolve power-supply deficit in off-grid areas

Business World Online
by Lenie Lectura - July 28, 2015 

SOLAR power provider Enfinity Asia Pacific Holdings Ltd. said on Tuesday that solar-hybrid solutions will address the lack of power in off-grid areas, including those that are under the small power utilities group (SPUG) of the National Power Corp. (Napocor).

William Ruccius, business development director of Enfinity, said there is a vast potential for solar-hybrid deployment along SPUG areas. “Napocor has 280 SPUG power plants. They range in size from 0.04 megawatt [MW] to about 10 MW,” he said.

These off-grid areas are currently being serviced with their electricity needs via diesel-fired power- generating facilities, which, Ruccius said, tend to be more expensive.

He said that the true cost of generation rate in these areas typically ranges from P14 per kilowatt-hour to P45 per kWh, and electricity is just being made available to them from eight to 16 hours a day.

Part of the electricity cost being paid by consumers in SPUG areas is covered by subsidies, but when cheaper alternatives, such as hybrids, will be provided, that level of subsidy may also be reduced.

However, Ruccius stressed that there are still some commercial and market risk issues that need to be addressed in the regulatory and policy frameworks of the industry before hybrid solutions can become viable in these areas.

He particularly cited the creditworthiness predicament of many electric cooperatives, including those that have been catering to the service needs of the SPUG areas.

“The problem here is that many electric cooperatives are not creditworthy and it is difficult to get paid. The QTP [qualifying third party] provides the generation and also takes over the distribution function, so it collects the money and pays itself,” he said, while pointing out that financing is the biggest challenge if appropriate framework is not in place. source

Enfinity targets off-grid solar hybrid plants of up to 10 MW

Business World Online
Posted on July 28, 2015 07:56:00 PM

BELGIUM’S Enfinity Group is looking at various solar prospects in Philippine off-grid areas, targeting projects with capacity of up to 10 megawatts (MW) each.

A solar rooftop project at the Asian Development Bank headquarters in Manila -- BW File Photo
The solar energy company said in a statement that solar-hybrid projects are a cost-competitive solution for areas covered by National Power Corp.’s (NPC) Small Power Utilities Group (SPUG)

“NPC has 280 SPUG power plants,” said William Ruccius, business development director of Enfinity Asia Pacific Holdings Ltd., noting that size of these plants ranges from 40 kilowatts to about 10 MW.

“These off-grid areas are currently being serviced with their electricity needs via diesel-fired power generating facilities that tend to be more expensive,” said Mr. Ruccius.

Mr. Ruccius said generation rates in off-grid areas range from P14 to P45 per kilowatt-hour and power is only available for about eight to 16 hours a day.

Cheaper alternatives -- like solar hybrid projects -- can help bring down the cost of power in these areas, which are subsidized.

“With hybrid solar and battery storage system as back-up technology, Enfinity noted that these areas could opt for a less costly solution while also lessening their carbon footprints,” Enfinity said.

This is expected to be backed by the anticipated drop in costs of photovoltaic (PV) solar panels, according to Enfinity Energy Greece General Manager Platon Baltas.

At the same time, utilizing a battery storage component for the solar projects could extend electricity service in the off-grid areas.

“Hybrids can provide 24/7 service at affordable cost for houses connected to ‘bad’ electricity grids,” according to Mr. Baltas.

He added that solar hybrid systems generally comprise of a PV array, battery and hybrid inverter.

Mr. Ruccius, for his part, added that the private sector can invest as new power provider or qualified third party (QTP) in the off-grid areas.

He noted, however, that commercial and market risk issues have to be addressed via regulatory and policy frameworks to make hybrid solutions in the country viable in the SPUG areas.

Among the issues, according to Mr. Ruccius, is the credit-worthiness of electric cooperatives, including those that have been catering to the service needs of the SPUG areas.

“The problem here is that many electric cooperatives are not credit worthy and it is difficult to get paid,” he said.

“The QTP provides the generation and also takes over the distribution function, so it collects the money and pays itself,” he added.

Overall, Mr. Baltas said financing will remain the biggest challenge if a framework is not in place.

Last May, Enfinity officials said the company will invest $180 million to develop four solar power projects in the Philippines with a combined capacity of over 100 MW by the end of the year. -- Claire-Ann Marie C. Feliciano source

Meralco PowerGen Corp. to spend $1.2 billion for three power projects

Business Mirror
by Lenie Lectura - July 28, 2015

MERALCO PowerGen Corp. (MGen), the power-generating arm of the country’s largest power-distribution firm, is earmarking $1.2 billion for three power projects that are targeted for completion between 2019 and 2020.

“On equity alone, our estimate is about $1.2 billion for the three projects,” Manila Electric Co. (Meralco) CFO Betty Sy-Yap said. The amount excludes the debt component of the projects’ total costs.

MGen and its partners have three power projects in the pipeline.

San Buenaventura Power Ltd. Co. (SBPL), a joint venture of MGen and New Growth BV, a wholly owned subsidiary of Electricity Generating Public Co. Ltd. of Thailand, is putting up a 455-megawatt (MW) coal power plant in Quezon.

It has already awarded the Engineering, Procurement and Construction (EPC) contract to Korean firm Daelim and Japanese firm Mitsubishi Heavy Industries. The site-preparation contract, meanwhile, was awarded to SC Megaworld Development Corp. The project is targeted for completion in early 2019. Also, SBPL is targeting financial cost and final Notice to Proceed for the project before end of the third quarter of 2015.

Another coal project, a 600-MW power plant in Subic, is being undertaken by Redondo Peninsula (RP) Energy, a joint venture among MGen, Aboitiz Power Corp. and Taiwan Cogeneration Corp.

RP Energy is actively pursuing the completion of all remaining development activities to allow the project to achieve financial closure and commence construction of the power plant.

The project proponent is now evaluating a “300-MW versus 600-MW transmission options and risks.” The target commencement of construction is first quarter of 2016, while target completion is in the second half of 2019.

Meanwhile, MGen is looking for partners for a 2×600-MW coal-fired power plant in Quezon. Atimonan One Energy is the project proponent. An Environmental Certificate of Compliance for the project is expected to be released in the third quarter of this year.

An EPC tender process has commenced for the project. The tender responses are expected later this year, with selection of preferred EPC contractor in 2016.

A grid impact study for the project has been completed, while a facility study is ongoing and is expected to be approved by the fourth quarter of this year.

Target completion of Unit1 is late 2020, as on-site works are targeted to start in mid-2016. “For now, we have three projects. So, that’s RP Energy, SBPL and Atimonan. The two projects, we clearly have partners. For Atimonan, in the meantime, we’re developing it as 100 percent,” Yap said.

“So, on that basis, 30-70 project finance and two projects that we are taking majority, the estimate is $1.2 billion on equity, minus the debt,” the Meralco official added.

Meralco, through MGen, is gearing up to achieve a target of providing 3,000 MW of power capacity in Luzon.

Besides the three projects, the company is also in talks with Japanese firms for a potential 1,500-MW liquefied natural gas project. MGen is also part of Global Business Power Corp. (GBPC) through its 22-percent interest. GBPC is one of the largest independent power producers in the Visayas region.

Meanwhile, MGen has also ventured abroad in partnership with First Pacific Co. Ltd.

The two have incorporated PacificLight Power Pte. Ltd., which holds a 70-percent stake in GMR Energy Singapore Pte. Ltd.—the owner of an 800-MW natural-gas power plant in Jurong Island, Singapore. source

Monday, July 27, 2015

Panay Energy assures stable supply despite Semirara pit shutdown

Business World Online
Posted on July 27, 2015 11:18:00 PM
By Louine Hope Conserva, Correspondent

ILOILO CITY -- Panay Energy Development Corp. (PEDC), which operates a two-unit coal-fired plant here with a combined capacity of 164 megawatts (MW), has given assurances that its power supply will remain stable despite the closure of the Semirara Panian open pit, from which it sources at least 50% of its coal.

PEDC, a Global Business Power Corp. (GBP) subsidiary, is also currently building a third coal plant with a 150-MW capacity that is scheduled for completion by July 2016.

Engineer Petronilo R. Madrid, PEDC vice-president for Panay operations, said the company has alternative suppliers from Indonesia and assured that the imported coal will not translate to higher power rates.

“We have contingency plans and we have diversified coal suppliers. We have three to four suppliers from Indonesia. So we are confident that PEDC will run continuously,” said Mr. Madrid.

He added that Semirara Mining and Power Corp. (SMPC), which has been ordered to stop mining operations following the collapse of a portion of the Panian pit where nine miners died on July 17, still has reserves to meet the contracted delivery for the next two weeks.

“DoE (Department of Energy) stopped the mining, but not the unloading of coal. Semirara even has scheduled delivery next week or week after next. Nonetheless, we have coals coming from Indonesia,” the PEDC official said.

PEDC buys 250,000 to 300,000 metric tons of coal from SMPC annually since 2011.

PEDC’s key customers are the Panay Electric Company, Inc., Aklan Electric Cooperative, Inc., and the Iloilo II Electric Cooperative, Inc.

Mr. Madrid also said PEDC maintains its own coal stocks that should cover demand for a month.

“Our supply in the yard is good for one month of continuous operation in case of typhoon and there will be no delivery from our supplier,” he said.

GBP, a member of the GT Capital Holdings Group, owns nine power generation facilities in the Visayas and Mindoro Island with a combined gross capacity of 625 MW.

The Iloilo plant is its second biggest after the 246 MW clean coal-fired power plant in Toledo City, Cebu. source

AC Energy welcomes CSP implementation

By Iris Gonzales (The Philippine Star) | Updated July 27, 2015 - 12:00am

MANILA, Philippines - AC Energy Holdings Inc., the power generation arm of the Ayala Group welcomed the implementation of the controversial Competitive Selection Process or CSP for distribution utilities, a new process put in place by former Energy Secretary Carlos Jericho Petilla for securing power supply agreements.

“CSP is a critical point of EPIRA (Electric Power Industry Reform Act of 2001) ….to lower cost of power. Transparent and competitive bidding does work. It’s time for us to reinforce the system. If this works, it will make projects more financeable,” AC Energy president John Eric Francia said.

In contrast, other generators and distributors are quietly opposing the new Department of Energy circular.

Francia said CSP is already being implemented in Public Private Partnership projects of the government.

“We are in favor…. as long as it will be managed properly,” Francia said.

However, he warned the CSP may slowdown the signing of power supply agreements.

“The downside of that, learning from PPP, is it will slow down…It forces you to get the best deal, “ he said.

Petilla put in place the CSP to make the power purchase process transparent and to bring down prices as what was the goal supposedly of the EPIRA.

Manila Electric Co., the country’s biggest power distributor, on the other hand prefers a voluntary implementation of the CSP.

“CSP is still up for discussion. In order to have more platforms for ensuring cost competitiveness, having a mix of bilateral, voluntary CSP and the WESM (Wholesale Electricity Spot Market) is the ideal mechanism…Rather than one size fits all…It’s the best mechanism rather than force the entire distribution utility,” Meralco president Oscar Reyes said.

The ERC and the DOE will issue the implementing guidelines of the circular.

According the circular, the adoption of competitive selection as a policy will encourage investments in the power generation business, thereby ensuring availability of supply and promoting transparency in securing power supply agreements. source

Ayala looks to boost hydro, solar in renewable portfolio

By Danessa O. Rivera (The Philippine Star) | Updated July 27, 2015 - 12:00am

MANILA, Philippines - The power unit of conglomerate Ayala Corp. is looking to add hydropower and solar projects in its renewable energy (RE) portfolio in the medium to long-term, its top official said.

The hydro-power projects being privatized by the Power Sector Assets and Liabilities Management Corp. (PSALM) are attractive investments, AC Energy Holdings Inc. president and CEO John Eric T. Francia said on the sidelines of the Ayala-University of the Philippines School of Economics Economic Forum in Makati City.

“We’re interested in the hydro assets of PSALM. It’s more to diversify [our RE portfolio],” he said.

Among the power assets still to be privatized by PSALM are the 727.1-megawatt seven-unit Agus hydroelectric power plants and the 255-MW Pulangi hydroelectric power plant in Bukidnon.

Francia said these assets will be sold and will not be under an independent power producer (IPP) contract, which makes them attractive.

Currently, AC Energy is working on an 11-MW mini-hydropower project with Sta. Clara Power Corp. in Ifugao.

“We still have to get off the ground with hydro. There are local matters that we need to address and seeking community support for the project,” Francia said.

Meanwhile, AC Energy is not closing its doors on solar technology after shelving its 35-MW solar farm in Davao del Sur.

The Mindanao solar farm, to be developed with Mitsubishi Corp., was supposed to be Ayala’s first foray into solar development.

“We continue to monitor developments in solar. We are very much aware that panel prices continue to go down,” Francia said.

However, the Ayala power unit will not be take part in the second round of solar development under the feed-in tariff (FIT) scheme.

“We’re not participating in the race for that 500 MW where there’s a March 2016 deadline. But it doesn’t mean that we’ve forgotten about solar. We continue to study the prospects and our aspiration is to get to a stage where solar becomes competitive vis-a-vis the grid,” Francia noted.

Under the FIT, eligible RE developers will be given a set of incentives, which includes a premium rate for a period of 20 years, for their RE projects.

In the second round of FIT allocation for solar, developers are entitled to a FIT rate of P9.68 per kilowatt-hour. source