Aboitiz Power rushing Davao plant

Manila Standard Today
by Alena Mae S. Flores

Aboitiz Power Corp. plans to initially spend an estimated P25 billion of its own money instead of seeking funding from lending institutions to speed up the construction of a 300-megawatt coal-fired power plant in Davao City and Davao del Sur province.

“We will initially invest our own funds to start construction and seeking financing later,” Luis Miguel Aboitiz, senior vice president of Aboitiz Power, said.

The Davao coal plant will become a unit of subsidiary Therma South Inc. Aboitiz Power has committed to supply Mindanao’s power needs with the expected surge in demand from communities, industries, investments and commercial establishments.

“The region needs a steady supply of power to fuel its growth, as industries, investments and businesses expand. This, in turn, will provide livelihood and development to communities. As communities and households increase, so will their demand for electrical power as well,” Manuel Orig, Aboitiz Power first vice president for Mindanao affairs, said.

The demand for electricity in Davao and the rest of Mindanao is growing steadily but supply has lagged behind the baseload capacity.

Government estimates show that unless power supply generation is increased soon, Mindanao will face a power shortage. By 2014, the shortage will be around 480 MW—enough to cut off the entire power supply to the cities of Davao, Cagayan de Oro, General Santos, Zamboanga and Butuan.

Orig said that unless the proposed power plant was built soon, the energy supply situation in Mindanao would become more precarious, especially with the dry season this year. Dry months usually bring down the water level in Lake Lanao, which in turn lowers the energy-generating capacity of the Agus-Pulangi hydropower complex—Mindanao’s power supply.

Orig assured residents and local government units that the proposed 300-MW coal plant in southern Davao was safe and would not harm the environment or the communities surrounding it.

AP to advance funds for Davao plant

Manila Times.net

ABOITIZ Power Corp. (AP) plans to shoulder the entire cost of its proposed coal-fired power plant in Davao to fast-track its construction.

Manuel Orig, AP Mindanao affairs first vice president, said the company is ready to pour in the P25 billion needed to put up a 300-megawatt coal plant as a long-term solution to the region’s power woes.

“The region needs a steady supply of power to fuel its growth, as industries, investments and businesses expand. This in turn, will provide livelihood and development to communities. As communities and households increase, so will their demand for electrical power as well,” Orig said.

Government estimates show that unless power supply generation is increased, Mindanao would face a shortage soon. By 2014, the shortage will be around 480 megawatts, enough to cut off the entire electricity supply to the cities of Davao, Cagayan de Oro, General Santos, Zamboanga and Butuan.

Orig said that unless AP’s proposed power plant is constructed soon, the supply situation in Mindanao will become more precarious, especially as 2011 enters the dry summer season.

Dry months usually bring down the water level in Lake Lanao, lowering the energy-generating capacity of the Agus-Pulangi hydropower complex, the lifeblood of Mindanao’s power supply.

In response to concerns that coal plants could foul up the region’s environment, Orig said AP will employ the latest technologies to curb the proposed facility’s emissions.

AP also plans to put up more hydroelectric power plants in the next two years on top of the five similar projects it started in 2011.

In Davao, AP is set to construct the Tudaya 1 (6.6-megawatt, upstream of Sibulan A) and Tudaya 2 (7-megawatt, downstream of Sibulan B) in August. Both are expected to go online by December 2012.

Two other hydropower plants in Kitawtaw, Bukidnon—the 18-megawatt Sita and 12-megawatt Simod—are due for completion in 2013. In Luzon, the Irisan 3.8-megawatt hydropower facility in Benguet is set to be completed by September.

“We need to get the right mix of power from different sources so that even in the summer or during El Niño, Mindanao will have reliable power,” Orig said.

AP shares closed at P31.55 apiece on Friday, up from P31.00 the day before.

Euan Paulo C. Añonuevo

Aboitiz to put up P25-B Davao power plant

By Donnabelle L. Gatdula (The Philippine Star) Updated April 30, 2011 12:00 AM

MANILA, Philippines - Aboitiz Power Corp. (APC), the power generation unit of the Aboitiz Group, will invest P25 billion for the construction of a 300-megawatt (MW) coal-fired power facility in Davao, a ranking company official said.
“APC assures that it is ready to do its part to help solve the problem through a long-term solution: Investing its funds in constructing a proposed 300-MW circulating fluidized-bed coal-fired power plant in southern Davao. To save time, APC is ready to invest its own funds, amounting to P25 billion, instead of seeking financing from other institutions, to fasttrack construction,” said Manuel Orig, APC first vice-president for Mindanao.
Orig said the project, which will be undertaken by APC’s subsidiary Therma South Inc., is part of the company’s commitment to supply the region’s power needs as its communities, industries, investments and commercial establishments grow - especially in Davao, which has the biggest power supply need in the region.
 “APC has been in Davao for 50 years. Throughout that time and until the present, the company considers Davao its home. As a member of the community, APC is committed to being a partner in the growth of Davao and Mindanao,” he said.
Orig said they would want to be part of the development in Mindanao.
 “The region needs a steady supply of power to fuel its growth as industries, investments and businesses expand. This, in turn, will provide livelihood and development to communities. As communities and households increase, so will their demand for electrical power as well,” Orig said.
The demand for electricity for Davao and the rest of Mindanao is growing steadily but supply, unfortunately, has been lagging behind the needed baseload capacity.
Government estimates show that unless power supply generation is increased soon, Mindanao will face a power shortage.

By 2014, the shortage will be around 480 MW - enough to cut off the entire power supply to the cities of Davao, Cagayan de Oro, Gen. Santos, Zamboanga and Butuan.
Orig said unless the proposed power plant is constructed soon, the energy supply situation in Mindanao will become more precarious, especially as it enters the dry summer season.
Dry months usually bring down the water level in Lake Lanao, which lowers the energy-generating capacity of the Agus-Pulangi hydropower complex - the lifeblood of Mindanao’s power supply.
The APC official also assured residents and the local government units that the proposed 300-MW circulating fluidized-bed coal-fired power plant in southern Davao is safe, and will not harm the environment or the communities surrounding it.
APC has an excellent track record of human safety and environmental protection in its power-generation facilities. We guarantee that the proposed power plant will not cause harmful effects on the water supply, the health of the communities and the environment,” he said.
The official also pointed out that the wrong notion about coal is a thing of the past.
“Dirty coal power plants are those that used the technologies of the 1950s, 1960s and 1970s. New coal-fired power plants are proven to be safe, clean and reliable. APC’s modern, high-technology coal-fired power plants meet international standards that keep them safe and environment-friendly,” he said.
 “The people of Davao have known the Aboitiz Group for more than 50 years and we consider Davao as our home. We will not do anything that will harm our own community.”
He noted that there are already clean coal-fired power plants operating in the Philippines and in Mindanao, like the Steag State power plant in Villanueva, Misamis Oriental and Cebu Energy Development Corp. in Cebu.
 “These facilities continue to meet environmental standards and there has been no recorded incident that negatively affected the health and livelihood of the communities around it,” Orig said.
At present, APC operates hydro-electric power plants in Davao and Benguet as well. The company is set to build even more hydro-electric power plants in the next two years. Five hydropower projects have been started in 2011.
In Davao, APC is set to construct the hydropower plants Tudaya 1 (6.6-MW, upstream of Sibulan A) and Tudaya 2 (seven-MW, downstream of Sibulan B) in August 2011, which are expected to be finished by December 2012.
Two other hydropower plants in Kitawtaw, Bukidnon, the 18-MW Sita and 12-MW Simod, are due for completion in 2013. In Benguet, the Irisan 3.8-MW hydropower facility is set to be completed by September 2011.
However, these hydropower plants are dependent on ideal water levels - something that is affected during dry months. Low water levels result in low power-generation. “This is why together with these hydro-electric plants, clean coal-fired plants must also be ready to use. We need to get the right mix of power from different sources so that even in the summer or during El Niño, Mindanao will have reliable power,” Orig said.
The proposed clean coal-fired power plant, if approved, will be one of the biggest single investments in Mindanao. No less than 1,000 people will be needed for the 40-month construction of the facility and 200 people will be employed during the regular operations of the plant. It is proposed for construction in a 52-hectare property in Binugao in Toril, Davao City and Inawayan in the municipality of Sta. Cruz - depending on the approval of local governments concerned.

Conal Holdings taps BDO to finance coal-fired plant

Manila Standard Today

by Alena Mae S. Flores

Conal Holdings Inc., owned by the Alcantara Group, is looking at a loan package from local banks led by Banco de Oro to finance its $450-million, 200-megawatt coal power plant in Maasim, Sarangani province in Mindanao, a company official said Thursday.

“We’re still trying to put up a consortium among local banks but I believe the lead will be done via BDO. It’s all local and peso-financed,” Conal Holdings financial analyst Antonio Miguel Alcantara said.

Alcantara said the company planned to start construction of the coal plant within the year with commissioning targeted by 2014.

“We have finished our discussions with Daelim [of Korea]. Construction is targeted to start around August or September, as we plan to achieve financial closure by June or July,” he said.

CONAL PLANS NEW MINDANAO PLANT

Manila Times.net

CONAL Holdings Corp. (CHC) plans to put up a coal-fired power plant in Zamboanga within the next five years.

Antonio Miguel Alcantara, CHC financial analyst, said the company started the initial studies on the proposed project, which will help secure Western Mindanao’s power supply.

“If you look at Mindanao grid right now, there’s no capacity for ancillary services, which are dispatchable reserves and peaking plant,” he said.

CHC is a joint venture between Thailand’s EGKO and the Alcantara group, a local conglomerate with interests in power generation and property development.

CHC has interests in a number of diesel-fired power plants in Mindanao, which relies on generation of state-owned hydroelectric facilities for bulk of its power supply.

Alcantara said the company is looking at putting up a 100-megawatt coal plant in Zamboanga by 2016

“The way we look at Mindanao, our target market will be Central and Western Mindanao . . . So that way, we can actually share the market and not go head-to-head,” he said, referring to Aboitiz Power Corp., which is CHC’s partner in some diesel plants in the region.

Besides the Zamboanga project, CHC is also putting up a 200-megawatt coal plant in Saranggani province.

“Construction is targeted to start in around August or September, as we plan to achieve financial closure by June or July,” Alcantara said.

The company plans to tap a consortium of banks led by Banco de Oro Unibank to finance the project. Daelim of Korea will conduct the engineering, procurement, and construction of the plant.EUAN PAULO C. AÑONUEVO

FIRST GEN UNIT BAGS TAX PERKS

Manila Times.net

THE Board of Investments (BOI) has granted tax and other incentives to a renewable energy project of First Gen Corp. in Bukidnon province.

In a statement, the BOI said it approved the registration of FG Bukidnon Power Corp.’s (FGBPC) P106-million hydroelectric power plant project in Barangay Damilag, Manolo Fortich, Bukidnon.

“This will ensure a stable supply of electricity within the underlying areas and a welcome relief for the environment in lieu of the usual coal-fired plants that make up the bulk of power generators in Mindanao,” Department of Trade and Industry Secretary and BOI Chairman Gregory Domingo said.

FGBPC, a wholly owned subsidiary of First Gen, would operate the 1.6-megawatt plant located within a 13,959-hectare area.

First Gen in 2004 won the bidding for the plant, which was commissioned and constructed by state-owned National Power Corp. in 1957.

The run-of-river mini-hydro plant, which is composed of two 800-kilowatt turbine generators, will use water from the Agusan River to generate electricity, according to First Gen’s website.
The power to be generated will be supplied to Cagayan Electric Power and Light Co. Inc., with which FGBPC has a supply contract until May 2025.

The project qualified for perks under Republic Act 9513 or the Renewable Energy Act of 2008.
First Gen shares fell to P14.48 apiece on Thursday from P14.52 the day before. Ben ARNOLD O. DE VERA

City councilor warns of higher power rate

Sunstar Bacolod

By Carla N. Canet

BACOLOD City Councilor Caesar Distrito warned that the increase in the power rate of the Central Negros Electric Cooperative (Ceneco) will not only be P1.25 per kilowatt hour but P2 effective in the May 2011 billing.

Being a consumer himself, he was shocked to see the increase in his electric bill.

"We will now feel the effect of Ceneco’s contracting with a much higher cost of power supply. Every household in Bacolod, Bago, Murcia, Don Salvador, Talisay and Silay will carry the burden of paying its electric bills in record-high rates. You can check your electric bill to confirm my statement,” Distrito said.

Before the March 2011 billing, the bill for a consumer using 100 kwh is only about P600. But for April, it will be P750 or an increase of at least P150.00.
The bill will increase to P800 in May, he added.

“It is not correct for Ceneco officials to say that, because the rates of other electric cooperatives are high, then we have to follow them. The responsibility of Ceneco management is to make sure that our power rate is cheap and affordable,” he said.

Distrito alleged that the increase was due to the power supply contract that Ceneco entered into with Kepco.

The power contract that Ceneco President Eduardo Gasambelo and General Manager Sulpicio Lagarde Jr. had signed is now the subject of scrutiny of the City Council of Bacolod and of all other LGUs within the Ceneco franchise area.

Published in the Sun.Star Bacolod newspaper on April 29, 2011.

IPPs prod use of Malampaya royalties

Manila Times.net

THE country’s independent power producers are renewing their call for government to subsidize electricity to spur investments.

Ernesto Pantangco, Philippine Independent Power Producers Association (PIPPA) president, said the government has to subsidize critical industries and the marginalized sector by using royalties from the Malampaya natural gas field and by removing the value-added tax (VAT) on power generation.

“These unnecessarily increases [the] cost of power,” he said.

PIPPA is calling on the government to use at least $300 million from the Malampaya to subsidize the power rates of the electronics industry and its allied sectors, which are among the country’s top dollar earners, as well as of marginalized sectors in the country.

The group is also seeking a zero-rated VAT for power generation.

Besides the levy imposed on power generation, the government also charges distribution utilities a 12 percent VAT, a 32 percent corporate income tax, and a local franchise tax on their gross receipts, which they simply pass on as additional charges to consumers.

PIPPA is composed of private power plant operators with a total generation capacity of 8,110 megawatts. The group has been lobbying for the use of the Malampaya royalties and the removal of VAT on power generation to lower electricity bills.

Based on the group’s studies, the power rates in the Philippines are among the highest in the region.

Residential rates in Metro Manila, for example, are the most expensive in Asia, topping even industrialized countries such as Japan and Singapore. The country’s industrial power rates are second only to Singapore in the region.

Pantangco said the country’s prohibitive power rates are a result of dependence on imported fuel, subsidies implemented by its neighbors, and indigenous natural gas indexed to import prices, a chunk of which is taken up by government royalties.

Government royalties from Malampaya correspond to less than P2 per kilowatt-hour in the power cost of Metro Manila’s electricity distributor, Manila Electric Co., whose average tariff in 2010 was P9 per kilowatt-hour.

Metro Manila and surrounding areas generate more than half of the country’s economic output.
Government generates roughly $500 million in royalties each year from the Malampaya, the country’s largest natural gas field to date.

Pantangco said that using government royalties from the Malamapaya would help improve investments, especially with industrial customers complaining that a quarter of their operating costs are eaten up by electricity.EUAN PAULO C. AÑONUEVO

Alcantara power plant to start by 2014

By Donnabelle L. Gatdula (The Philippine Star) Updated April 29, 2011 12:00 AM

Manila, Philippines - Conal Holdings Corp. (CHC), the power generation arm of the Alcantara Group, expects the commercial operation of its 200-megawatt coal-fired power plant to start by mid-2014 in Saranggani, Mindanao, a company official said.
CHC financial analyst Antonio Miguel Alcantara said they have entered into an EPC (engineering, procurement, construction) contract with a Korean firm, Daelim, for the project.
“We have finished our discussions with Daelim for the EPC contract. Construction is targeted to start around August or September (2011),” he said.
He said they would tap several commercial banks to raise funds for the project.
“We plan to achieve financial closure by June or July. We are still trying to put up a consortium among local banks, but I believe the lead will be done via BDO. It’s all local and peso-financed,” he said.
Aside from the Saranggani power project, CHC is also planning to put up another facility in Zamboanga.
“We’re planning to put up a coal plant in Zamboanga. And it’s targeted to have that commissioned in the second half to the latter months of 2016, which is a year after the commissioning of the Saranggani plant and is timed with the expiration of the WMPC (Western Mindanao Power Corp.) contract with Napocor (National Power Corp.) in December 2016,” he said.
Alcantara, however, said they have yet to decide the capacity for the planned Zamboanga power plant.
“For the Zamboanga plant, we are still starting the initial study. So we haven’t determined yet who will develop the Zamboanga plant,” he said.
He said they may be tapping a partner for the Zamboanga project.
“The development of this project, we started off with Conal Holdings so one of our partners is E-Co of Thailand for the Saranggani plant,” he said.
Power to be generated from these power projects would be sold by CHC to Mindanao-based electric cooperatives and to the grid through the wholesale electricity spot market (WESM).
He said they are also targeting the market not being served yet by large distribution utilities in the province.

Mindanao power situation stable anew

By Edith Regalado (The Philippine Star) Updated April 29, 2011 12:00 AM

DAVAO CITY, Philippines  – The power situation in Mindanao has returned to normal with three units of the Pulangi hydroelectric plant back in the grid, the National Grid Corporation of the Philippines (NGCP) said the other day.
NGCP spokesperson Bambi Capulong said the Pulangi hydroelectric plant was recently shut down for its annual preventive maintenance.
Last Monday, Pulangi Unit 1 was synchronized at around 8:30 p.m., followed by Unit 3 at 8:40 p.m., and Unit 2 at 9:15 p.m.
The power reserve in the Mindanao grid is currently at 111 megawatts (MW).
As of Tuesday, the Pulangi plant, which has a rated capacity of 255 MW, had an actual capacity of 180 MW.
On the other hand, the Agus hydro complex, which has a total rated capacity of 727 MW, had an actual capacity of 452 MW.
Capulong said the NGCP does not own, operate or shut down power-generating plants but as the system operator, it has information on the available capacity, system peak and reserves in the power system.

Alcantaras to build 2 coal-fired plants

By Amy R. Remo
Philippine Daily Inquirer
First Posted 21:50:00 04/28/2011

MANILA, Philippines—Conal Holdings Corp., led by the Alcantaras’ Alsons Consolidated Resources Inc., is pushing through with a plan to build two coal-fired power plants in Sarangani and Zamboanga to provide 300 megawatts in additional baseload capacity to these areas in four to five years.
Antonio Miguel B. Alcantara, financial analyst for Alsons, said the additional capacity would be crucial as two of its build-own-and-operate (BOO) contracts would expire in 2015 and 2016.
Alcantara was referring to the contracts for the 100-MW diesel facility of Western Mindanao Power Corp. (WMPC) and the 55-MW bunker fired power station of Southern Philippines Power Corp. (SPPC).
State-run National Power Corp. serves as the buyer of the electricity generated from these two facilities. Once the contracts expire, the diesel facilities are expected to become merchant plants that could provide ancillary services to the Mindanao grid.
“These coal plants will replace the capacities of the diesel (plants),” Alcantara said.
Investments for the two coal-fired facilities may reach $700 million, of which $450 million would be the cost of the Sarangani facility.
Alcantara did not disclose investment figures for the Zamboanga coal plant but he noted that the group might invest $2 million to $2.5 million to produce a megawatt of coal power. This meant that for the 100-MW Zamboanga plant, Conal Holdings may have to spend as much as $250 million.

Lopez power project gets BOI perks

By Abigail L. Ho
Philippine Daily Inquirer
First Posted 21:47:00 04/28/2011

MANILA, Philippines—The Board of Investments has granted various fiscal and non-fiscal perks to the Lopezes’ FG Bukidnon Power Corp. for its P106-million, 1.6-megawatt (MW) hydropower facility.
The incentives were given according to the provisions of RA 9513, or the Renewable Energy Act of 2008.
The power facility, located in Manolo Fortich town, occupies a 13,959-hectare property. Its main diversion dam is located 5.5 kilometers from the forebay passing through the waterway canal.
The forebay spans 2.83 hectares, with a storage capacity of 40,000 cubic meters.
As fuel, the run-of-river generation facility will use flowing water from the Agusan River.
The plant is composed of two generating units with a capacity of 800 kilowatts each.
“This will ensure a stable supply of electricity within the underlying areas and a welcome relief for the environment in lieu of the usual coal-fired plants,” Trade Secretary Gregory Domingo said in a statement issued on Thursday.
Cagayan Electric Power and Light Co. gets all of the plant’s output until May 28, 2025 when its offtake agreement with FGBPC ends.
The plant started commercial operations on Oct. 14, 2005, following its official turnover to FGBPC by the Power Sector and Assets and Liabilities Management Corp. last March 29, 2005.
The BOI also approved the registration of mass housing projects being put up by SM Development Corp., Aboitiz Land Inc. and Filinvest Land Inc.

PCCI pushes renewable energy in power mix

By Ma. Elisa P. Osorio (The Philippine Star) Updated April 28, 2011 12:00 AM

MANILA, Philippines – The Philippine Chamber of Commerce and Industry (PCCI) is pushing for the adoption of a gradual and calibrated approach in the introduction of renewable energy (RE) to the country’s power mix.
In a position paper submitted to the Department of Energy (DOE), the PCCI had expressed serious concern on the impact the introduction of RE will have on the country’s already high power rates.
Hydroelectric power plants accounted for the bulk or 3,291 MW of the country’s total power need followed by geothermal with 64 MW and other RE sources with 34 percent.
The challenge, the PCCI said is to determine how much more of RE plants the country needs or should install to meet the goal of power security or self sufficiency and competitiveness.
“The technology for solar, wind and ocean power and even biomass are still in early development stages; the energy produced from these will be a multiple of the current average grid rate of P4.50/kWh. What we need now are base load plants... and with some sense of urgency,” Francis Chua, PCCI president said.
The FiT-All, a sort of subsidy for RE producers that will be pass-through to all end-users, is contingent upon the RE installation targets and the FiT rates, the group said. The installation target sets the percentage generation from eligible RE sources that shall be injected into the country’s power mix.
The PCCI is endorsing the locational approach as the next step. This approach provides for the identification of specific strategic locations where RE sources can best be used and developed. From here, the minimum aggregate capacity per location is then determined and the required technology development and reporting requirements for the identified technology/s are specified.
 “This approach allows for better monitoring of the contribution and progress of each RE source, which in turn forms the basis for the rates that warrant their contribution and benefit to the system,” Chua said.

PCCI calls for more base-load facilities

Manila Times.net

The Philippine Chamber of Commerce and Industry (PCCI) on Wednesday said the government should expedite the development of base load power plants instead of pushing for renewable energy use in the country.

“The technology for solar, wind and ocean power and even biomass are still in early development stages. The energy produced from these will be a multiple of the current average grid rate of P4.50 per kWh [kilowatt-hour]. What we need now are base load plants, and with some sense of urgency,” Francis Chua, PCCI president, said in a statement.

Chua said the country already sources 3,291 megawatts (MW) from hydroelectric power plants, 1,953 MW from geothermal power plants, and 64 MW from renewable energy sources—which on aggregate comprises 34.01 percent of the renewable energy power mix nationwide.

“The challenge is to determine how much more of renewable energy plants the country needs or should install to meet the goal of power security or self sufficiency and competitiveness,” he said.

The businessman said the Department of Energy and the National Renewable Energy Board’s decision setting the installation capacity for renewable energy plants at 790 MW can be described as “wise, deliberate and judicious.”

“790 MW total should be sufficient enough to determine the viability of the proposed FiT-All [feed-in tariff allowance] rates and to allow renewable energy investors/producers to recoup their investments while maturing their technologies and expanding their operations,” Chua said.

“Progressively defining the optimal and legal requirement of installed generating capacity from renewable energy technologies, particularly as they are still in the development stages, also ensures that end-users are protected from undue costs once the FiT-All kicks in,” Jose Alejandro, PCCI energy chairman, said.

“The PCCI is endorsing the locational approach as the next step. This approach provides for the identification of specific strategic locations where renewable sources can best be used and developed. From here, the minimum aggregate capacity per location is then determined and the required technology development and reporting requirements for the identified technology/technologies are specified,” Chua said.

“This approach allows for better monitoring of the contribution and progress of each renewable energy source, which in turn forms the basis for the rates that warrant their contribution and benefit to the system,” he said.

The businessman said the locational approach should be implemented in coordination with the National Grid Corp. of the Philippines (NGCP), which operates the country’s transmission system.

“This is in the light of synergizing them with what the current NGCP systems can take and what required ancillary services are already in place so that no other additional cost other than the forthcoming FiT-All charge is imposed on the consumers,” Alejandro said.
BEN ARNOLD O. DE VERA