Business World Online
Posted on June 06, 2012 09:30:10 PM
SN-ABOITIZ Power will expand the capacity of a reservoir at its 360-megawatt (MW) Magat hydroelectric facility in Isabela to lessen spillage, the firm said in a statement yesterday.
The firm signed an agreement with the National Irrigation Administration (NIA) to undertake the project which includes the conduct of a feasibility study and repairs and upgrading of the Maris reservoir.
The feasibility study is to assess how the operations of Magat can be improved in order to increase the agricultural production of the irrigation system.
It aims to increase the capacity of the Maris reservoir to 13.65 million cubic meters from the current 5.79 million cubic meters.
The Maris reservoir holds water that will be reused and then released for irrigation.
“While the current storage capacity is sufficient to re-regulate peaking releases on a daily basis, generation and/or spilling is required on weekends to provide sufficient water for irrigation,” SN-Aboitiz said.
Under the agreement, SN-Aboitiz will underwrite the project. However, since a feasibility study has not yet been completed, there is no estimated cost nor a timetable yet for the project.
“This is the beginning of a new phase in our partnership with NIA as we explore more opportunities for growth. We are pleased to have NIA as our partner as we develop this, and other projects, over the next few years,” said SN-Aboitiz President Emmanuel V. Rubio.
The Magat Dam was opened for commercial operation in 1983 and was previously owned and operated by NIA.
SN-Aboitiz won the contract to over the power plant in 2007 after submitting a bid of $530 million. It beat out First Gen Corp., the only other bidder, which bid $420.9 million.
The contract also includes a land lease agreement with NIA.
Magat operates mostly as a peaking plant which provides power to the Wholesale Electricity Spot Market when there is peak demand.
In a related development, SN-Aboitiz and NIA also signed a supply contract involving power generated from the 6-MW Baligtan hydroelectric power plant.
The Baligtan plant is located within the Magat area and can produce 30 gigawatt-hours of electricity yearly.
“The output from the plant will supplement the output of the Magat hydroelectric power plant,” the company said.
NIA conducted a bid for the Baligtan plant output in March.
SN-Aboitiz is a joint venture between Aboitiz Power Corp. and Norwegian firm SN Power Invest AS.
Aboitiz Power closed the first quarter with a 10% growth in its consolidated net income to P5.6 billion. This increase was mainly due to the higher demand for power and the 5% increase in its average selling price.
Shares of Aboitiz Power closed at P25.25, up 1.14% yesterday. -- Emilia Narni J. David source
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