By Danessa Rivera (The Philippine Star) | Updated May 9, 2017 - 12:00am
MANILA, Philippines - Lopez-led renewable energy firm Energy Development Corp. (EDC) is earmarking a P7-billion capital expenditure this year, the last wave of its rehabilitation program for its aging plants to improve reliability and generating capacities by 2018.
Majority of the capex set for this year will cover the rehabilitation of the 112.5-megawatt (MW) Tongonan geothermal plant in Leyte, EDC president and COO Richard Tantoco said after the company’s stockholders’ meeting.
“That’s our major capex this year. Our capex is about P7 billion. Around P3 billion will be for Tongonan,” he said.
This year’s budget is lower than last year’s spending of P8.2 billion, EDC vice president for corporate finance Erwin Avante said.
The Tongonan plant, which has two units, will be shutdown for 110 consecutive days.
“But then, there’s change in the whole turbines, some of the foundations, everything. So our drilling cost in the future and our work over cost are going to contract, it will have an increase output by 10 MW, decrease in steam consumption by nine percent,” Tantoco said.
“The retrofit of Tongonan’s two other units are on track to be completed by the third quarter. After the retrofit, it will be as good as new and we expect an increase of up to 10 percent in its total capacity,” Tantoco said.
EDC will also optimize its 125-MW Upper Mahiao goethermal plant this year, setting a budget of P400-500 million, Avante said.
The plant’s turbines will be replaced with newer metallurgy, Tantoco said.
“The first one is in, the second one has gone in, third and fourth are arriving October and in March next year. That will be much much higher chrome, some titanium. We expect those machines to be really robust going forward,” he said.
The efficiency upgrade reliability improvement came after the company lost P600 million in opportunity cost when the Tongonan plant tripped two years ago and the Upper Mahiao plant last year.
“Within this year or next year, you’ll see generation getting better. But you will really have everything kicking in on a full year basis in 2018. This is a transition year with a lot of outages,” Tantoco said.
Because of the scheduled plant shutdowns, EDC officials said they expect profit and revenues to be flat to slightly better than last year.
In the first quarter, EDC reported a 24 percent increase in recurring net income to P3.25 billion while revenues rose six percent to P9.61 billion.
The improved performance was attributed to higher average prices from its key geothermal units and by the increase in generation volumes of its Unified Leyte geothermal plants and Burgos wind farm.