Tuesday, October 17, 2017

TransCo seeks clearance for World Bank funding of grid connection project



October 17, 2017

THE National Transmission Corp. (TransCo) has informed the departments of Energy and Finance about its plan to borrow about P52 billion from the World Bank to fund the interconnection of the Visayas and Mindanao grids, the head of the state agency said on Monday.
Melvin A. Matibag, TransCo president and chief executive officer, said he had written a letter to the Department of Energy (DoE) asking it to endorse a plan to borrow from the multilateral lending agency.
“We are planning to borrow. We have presented our proposal,” he told reporters on the sidelines of a power competition seminar hosted by the Energy Policy and Development Program on Monday at the Bonifacio Global City in Taguig City.
He said in the letter, he also informed the department about TransCo’s plan to be the lead implementing agency of the interconnection project.
Privately-owned National Grid Corp. of the Philippines (NGCP) previously secured provisional authority from the Energy Regulatory Commission (ERC) for its plan to handle the project.
TransCo owns the country’s power transmission assets, which are being operated and maintained by NGCP under a congressional franchise.
Mr. Matibag said he had also written the Department of Finance about his plan to borrow from the World Bank. The move is meant to comply with a requirement to secure approval for borrowings of that size, he added.
He said he had discussions with the bank’s representatives, who he said were keen on financing the project at “almost zero interest” and under a term of 30 years. He said the loan would be tied with the development of renewable energy, which he said the bank has funding for.
He cited Mindanao’s dependence on power from hydroelectric plants when asked about how the interconnection project would qualify for the World Bank’s renewables funding.
The funding source is the latest floated by Mr. Matibag, who has the DoE’s support in seeking the endorsement of the Office of the President on a plan to seek congressional approval to use the Malampaya fund in financing the interconnection project. The fund is the state’s accumulated share in the revenue of the offshore Palawan gas-to-power project.
Asked whether a World Bank loan is a better option over the Malampaya fund, he said: “It can complement or it can be stand-alone.”
“If it will take time to get the Malampaya fund then maybe when we arrange the loan agreement, we can make a commitment that the payment will come from the Malampaya fund, whatever will be the terms,” he said.
On Sept. 9, 2017, ERC announced that it had granted provisional authority to NGCP to implement the project, which will enable power supply importations among the Luzon, Visayas and Mindanao grids.
The project, which will cost P51.6967 billion, covers the linking of the power grids via Cebu in the Visayas and Dipolog City in Mindanao. The converter stations in Visayas and Mindanao will be located in Sibonga, Cebu and Aurora, Zamboanga del Sur, respectively.
“The bottomline here is the cost will not be passed on the consumer,” Mr. Matibag said, adding that NGCP usually passes on to consumers the cost it incurs in funding transmission projects. — Victor V. Saulon

URC transmission project given green light by ERC



By Lenie Lectura -

GOKONGWEI-led Universal Robina Corp. (URC) has secured approval from regulators for its transmission facility in the Visayas region.
The Energy Regulatory Commission (ERC) announced it approved URC’s application to build a point-to-point (P2P) transmission facility to connect the firm’s 46-megawatt (MW) biomass-power plant in Negros Occidental to the Visayas grid. “The approval of URC’s application will redound to the benefit of the power consumers in terms of continuous, quality, reliable and efficient power supply,” the ERC said in a 17-page decision docketed in September.
The ERC allowed the URC to develop and own a dedicated P2P limited transmission facilities to connect the Kabankalan plant to the Visayas grid through the transmission system of the National Grid Corp. of the Philippines (NGCP).
However, one condition the ERC asks is for URC to turn over to the NGCP the switchyard and its associated facilities that have transmission function. URC would also have to pay a permit fee of P929,430.55.
The said transmission facility is necessary for the power plant to deliver its generated power through the 69-kilovolt (kV) Kabankalan-Mabinay transmission facility of the NGCP. The project cost is estimated at P123,924,973.21.
The plant will use bagasse, a sugarcane by-product from URC’s sugar mill, as feedstock. URC’s sugar mill in Kabankalan has a capacity of about 9,000 tons per day. The plant is URC’s foray into renewable energy.
Half of its output will be used by the firm’s sugar mill. The other half will go to the national grid under a 25-year operating contract with the energy department.
Asiaphil Manufacturing Industries Inc. had been tapped for the detailed engineering and design, complete supply of materials and equipment including delivery, installation and commissioning of the plant. URC also engaged the Power System Research and Consultancy Group for the supply of engineering services.

Pangasinan being eyed as site for new $2-billion coal-fired power plant

By Orly Guirao -

SUAL,Pangasinan—After the successful venture of a 1,200-megawatt coal-fired power plant launched two decades ago, a South Korea-based multinational firm is planning to put up a new, state-of-the-art 1,000 MW coal-based power plant here to boost supply in the Luzon grid system at cheaper cost.
Sual Mayor Roberto Arcinue revealed that the Korean energy firm is ready to pump $2 billion into the project, which won the support of the Sangguniang Panlalawigan following an endorsement in a referendum by the majority of the townsfolk.
This town already hosts Team Energy’s 1,200-MW Sual power station, the country’s biggest coal-fired power plant, located in Barangay Pangascasan, Sual, which began operating in 1999.
“Our population is growing and we need an additional power plant to serve the people of Luzon, North Luzon and Metro Manila,” the mayor said.
Power rates in the Philippines are the third highest in Asia and fourth in the Asia-Pacific region, said a study by the International Energy Consultants (IEC), an Australia-based consulting firm specializing in Asian power markets.
The Philippines’s power rates are also the 16th highest in the world.
The study says that one major reason  other Asian countries have lower electricity prices is that the Philippines’s power-generation capacity is low, with total primary energy supply per person per year of only 0.44 tons of oil.
With this situation, local officials welcome the possible entry of another coal-power plant the way President Duterte welcomed the construction of a 135-megawatt coal-fired power plant in Iloilo province in November last year, and the 405-megawatt coal-power plant in Misamis Oriental in September 2016.
Arcinue echoed what then-Davao City Mayor Duterte said  as he  campaigned for the presidency that he saw nothing wrong with the government’s plan to put up new coal-fired power plants to boost power supply in the country.
“You open the Philippines to all power players, I guarantee you the electricity will become cheaper,” Duterte said during the second presidential debate at the University of the Philippines Cebu.
Serving now as the country’s chief executive, Duterte said the Philippines will continue to use coal in power generation but will implement new technologies to minimize emissions.
“At this time, whoever is the president of the Philippines would always contend with coal. There’s still so much coal that can be utilized by civilization for the next 50 to 70 years, ” Duterte said during the inauguration of the coal-fired power plant in Misamis Oriental.
Arcinue said that aside from providing hundreds of jobs and millions in extra revenues, a second power plant would ensure stable power supply that is conducive to economic progress and sustainable growth.
“With stable and cheaper  electricity we will be able to invite more investors to put up projects and business ventures in Sual and anywhere else in Pangasinan that would mean more jobs and income for our people,” he added.
He said the proposed power plant project dovetails with his vision and that of the provincial government led by Gov. Amado Espino III to transform the municipality of Sual into an
“Energy City.”
Endowed with a clean and deep-blue sea and having been declared as a special economic zone, Sual has become an apple of the eye of several big-ticket investors ranging from power plant and petro-chemical operators to ship repair and airport companies.