Taiwanese Building 2 Power Plants

Manila Bulletin

By Myrna M. Velasco

January 24, 2013, 5:01pm

The long-planned 600-megawatt power capacity expansion of the energy unit of San Miguel Corporation (SMC) will finally take off from the drawing board this year following its signing of an engineering, procurement and construction (EPC) contract with Taiwanese firm Formosa Heavy Industries and local firm True North Manufacturing Services Corporation.

SMC Global Power Holdings Corporation, has noted in a statement to the media, that the two new power facilities will be located in Bataan and Davao and they will have aggregate capacity of 600 megawatts.

 “SMC Global recently signed an EPC agreement with Formosa Heavy Industries and True North Manufacturing Services Corporation for two new power plants in Bataan and Davao. Construction of both power plants, which will have a combined capacity of 600MW, will start this year,” the company has emphasized.

While no project cost was given, SMC Global is seen spending $900 million to $1.2 billion for the two greenfield developments, referencing on the rule-of-thumb development cost for coal-fired power projects of such scale.

The EPC deal was inked by True North Manufacturing Services president Domicinio B. Son, Formosa Heavy Industries assistant vice president Gu-Chuan Tsiou and SMC Global Power Holdings Corporation board directors Aurora T. Calderon and Ferdinand K. Constantino.

The 600MW projects will form part of the planned 3,000MW capacity expansion in the electricity generation sector earlier cast by San Miguel group in its energy investment blueprint.

The Davao facility, based on the grid impact study (GIS) it secured from the National Grid Corporation of the Philippines, will be for 300MW; while the Bataan plant will also be for 300MW initially.

The other projects eyed by the SMC group are power plants in Bulacan and Cavite for the Luzon grid; 600MW coal plant in Leyte and another 150MW in Panay; as we ll as the proposed 150-MW greenfield plant in South Cotabato.

Given the gestation period for coal-fired facility developments, the San Miguel project in Davao may clearly be a supply solution for the energy-starved Mindanao grid beyond 2015.

While its power development plans will be predominantly coal, San Miguel has previously indicated that the other focus will be on hydropower ventures.

SMC Global has always sounded off its intent to aggressively grow in the power generation segment, but the market share limitations prescribed under the Electric Power Industry Reform Act (EPIRA) may pose some hurdles. The conglomerate is currently the biggest player in the power generation sector, as based on its equity ownership and dispatch call on capacity being wheeled to the power grid. (MMV)   source