Marubeni to expand power assets

Manila Times.net
Published : Thursday, September 29, 2011 00:00 
Written by : Euan Paulo C. Añonuevo, Reporter


MARUBENI Corp. of Japan has committed to expand its coal-fired power plant portfolio in the Philippines.
On the sidelines of a conference, Department of Energy Secretary Jose Rene Almendras said Marubeni indicated plans to expand the 700-megawatt Pagbilao and the 1,200-megawatt Sual coal plants during President Benigno Aquino 3rd’s recent state-visit to Japan.
“Discussions are going on,” Almendras said.


Marubeni is the joint venture partner of Tokyo Electric Power Co. in TeaM Energy Corp., which in 2007 bought from US-based Mirant Corp. the Pagbilao and Sual power plants.


The output of both facilities are covered by contracts, which the government privatized to Aboitiz Power Corp. and San Miguel Corp.


As independent power producer administrators, AP and SMC handle the procurement of the fuel requirements and sale of the energy generated by the plants, which Marubeni operates under a 25-year build-operate-transfer deal that will lapse in 2025.


In a statement, AP said that it already signed an agreement with Marubeni to formalize their intention to jointly develop, build and operate a 400-megawatt coal plant beside the Pagbilao facility.


The plant is estimated to cost $600 million to 700 million.


“We expect to complete the power plant within 2015,” Erramon Aboitiz, AP president and chief executive officer, said.


AP shares rose to P27.60 each on Wednesday from P27 previously.


SMC has yet to confirm a tie-up with the Japanese firm for a coal-fired power project.


Coal is one of the cheapest fuels for electricity production and takes up roughly over a quarter of the Philippnies’ power generation mix. Compared with other conventional power plants that can run 24/7, coal-generating facilities also take a shorter time to construct.


Almendras earlier said that Luzon needs a coal plant before 2014 to avert an island-wide power shortage.


Local governments and various cause oriented groups, however, continue to oppose the development of coal projects because of the commodity’s alleged deleterious effect on health and the environment.