DOE defers bidding of coal contracts–Layug

Business Mirror
TUESDAY, 25 OCTOBER 2011 20:24 PAUL ANTHONY A. ISLA / REPORTER


THE Department of Energy (DOE) has deferred to December its plan to auction off coal exploration and development contracts to allot more time to thresh out issues in some of the areas to be bidded out, Energy Undersecretary Jose Layug Jr. said on Tuesday.


Layug said the department has finalized five coal projects that would be auctioned off to interested bidders and the agency could add five more to the final count but they are still awaiting confirmation on some areas to be offered.


“So far, we have only five areas but it’s not yet final. We are looking at bidding out five more, but we need a final approval from the Department of Environment and Natural Resources so there will be no overlap,” Layug said.


The 10 prospective coal projects are located mostly in Mindanao. Among the identified the areas for possible coal exploration and development are Cebu, Surigao del Sur and Zamboanga del Norte.


The proposed bidding round for coal projects will fall under the DOE’s Philippine Energy Contracting Round (Pecr), a public bidding round for energy projects started in 2005 to spur the development of indigenous power sources.


The DOE earlier said it plans to bid out the coal areas this month as part of the government’s thrust to ensure energy security. In 2009 the DOE awarded more than 10 coal contracts under the Pecr with potential investments of around P580 million. Coal is considered one of the cheapest fuel for electricity production and takes up roughly over a quarter of the country’s power generation mix.


Energy Secretary Jose Rene Almendras earlier said the government plans to launch the coal contracting round before the end of the year. “We’ll be pushing through with the coal bidding. We want to make it a good offering, we have a few areas that are clear from opposition. We’re gunning for an offering round for coal before the end of the year,” Almendras said.


The DOE head said he also wants to address opposition on coal exploration and development, which has stalled several coal projects. “I want to have more areas clear from opposition for the development to push through. We have COCs [coal-operating contracts] that have not moved and it’s not the fault of the developer, the developer could not proceed with development because of issues within their areas,” he said. Almendras is pushing for coal projects that would address the country’s baseload or 24-hour power requirement.