Meralco to use emergency capex for other projects

By Danessa Rivera (The Philippine Star) | Updated February 29, 2016 - 12:00am

http://www.philstar.com/business/2016/02/29/1557732/meralco-use-emergency-capex-other-projects

MANILA, Philippines – Pending regulatory clearance, Manila Electric Co. (Meralco) will utilize its emergency capital expenditure (capex) amounting to around P10 billion to fulfill necessary projects to meet rapid load and customer growth.

The power distribution giant will be prioritizing projects to be covered under the emergency capex, Meralco president Oscar Reyes said.

“I think that will be in the order of about close to P9-10 billion,” he said. “We will have to prioritize all of those that are needed to be able to meet the growth in energy demand.”

This is to ensure the distribution utility will meet the requirements of customers, Reyes said.

“In the meantime, we are allowed to spend on emergency capex and we’ve also identified those (projects) that are really required in order to maintain service and meet customer and load growth,” he added.

Among the projects that will have to be put in the back burner are the upgrades on facilities that need to be storm resilient.

 “Some of the capex that are intended for resiliency... weather and storm-hardening projects, will be put at risk. These are things we are making a case for with ERC,” Reyes said.

The power distributor giant filed its budget application with the ERC in February last year.

In its filing, it asked the power regulator to approve a capex of P17.7 billion for 27 major projects and 88 residual projects.

Major projects include retail competition and open access meter conversion program for customers, expansion of its prepaid retail electric service and construction and expansion of distribution facilities.

Residual projects, on the other hand, are mostly upgrades in distribution and non-network assets.

Earlier this month, ERC chairman Jose Vicente Salazar said hearings for Meralco’s capex application are still on going.

As soon as hearings are done, the application would be up for signing by the five-member commission, the ERC chief added.

As for Meralco, Reyes said they keep on making the case with ERC that these projects are necessary to meet its franchise requirements.

“We keep engaging them, making the point that these are needed to be able to beat the load growth, customer growth, network resiliency and other things the customers require. We are hopeful action will be forthcoming within the reasonble, short period of time,” Reyes said.

PhilCarbon bullish on developing more renewable energy projects

By Danessa Rivera (The Philippine Star) | Updated February 29, 2016 - 12:00am

http://www.philstar.com/business/2016/02/29/1557735/philcarbon-bullish-developing-more-renewable-energy-projects

MANILA, Philippines – Local renewable energy PhilCarbon Inc. is bullish in developing more renewable energy (RE) projects following the completion of its joint solar project with Citicore Power, a sister company of Megawide Construction Corp.

The company said it is working on a portfolio of over 140 megawatts (MW) of renewable energy projects after it finished its 25-MW joint solar project with Citicore last week.

PhilCarbon president Ruth Yu-Owen said the company is optimistic the completed solar project would be able to avail of the Feed-in tariff (FIT) as the project was completed ahead of the March 15, 2016 deadline set by the Department of Energy (DOE).

She said the company is now focusing its efforts on other projects being developed with Citicore Power such as the 87-MW La Carlota solar farm in Negros Occidental and the 12-MW Himamaylan Biomass Project in Himamaylan, Negros Occidental.

The company is also developing the following projects with Upgrade Energy of Belgium namely the 1.814-MW Home Depot Solar rooftop project in Laguna, 1-MW Solaire solar power project, 50-kilowatt (kW) Micro Hydro Project in Zamboanga City, 2.5-MW Manicahan River Hydro power project in Zamboanga City, 600-kW Magat F RIS hydro power project in Isabela and 33-MW wind project in Bulalacao, Oriental Mindoro.

Sy, Coyiuto cancel share-swap deal for Synergy Grid

By Iris Gonzales (The Philippine Star) | Updated February 29, 2016 - 12:00am

http://www.philstar.com/business/2016/02/29/1557734/sy-coyiuto-cancel-share-swap-deal-synergy-grid

MANILA, Philippines – Taipan Henry Sy Jr. and luxury cars dealer Robert Coyiuto Jr. have decided to cancel a share-swap deal that would effectively transform their publicly listed Synergy Grid and Development Philippines Inc. as the holding company of the National Grid Corp. of the Philippines (NGCP), which is majority owned by their two separate companies.

The cancelled transaction also puts to rest speculations that NGCP would do a backdoor listing via Synergy Grid.

NGCP operates, maintains and develops the country’s power grid. It holds the 25-year concession contract to operate the country’s power transmission network.

Filipino-owned entities One Taipan Holding Corp.’s Monte Oro Grid Resources led by Sy and Pacific21’s Calaca High Power Corp. led by Coyiuto control the 60 percent stake in NGCP. The remaining 40 percent is held by State Grid Corp. of China (SGCC) as its technical partner.

In a letter submitted to the board of directors of Synergy Grid, the two businessmen said they no longer want to pursue the share-swap deal because they were unable to obtain a tax-free ruling for the transaction.

Sy and Coyiuto said the assignments should have been tax free under Section 40 of the Philippine National Internal Revenue Code (NIRC).

 “Since a ruling confirming both assignments as ‘tax free’ under Section 40(C)(2) of the NIRC has not been obtained to date and as the consummation of the said assignments have been pending for five years already, Sy and Coyiuto no longer wish to further wait on the confirmation,” Synergy Grid said.

According to Section 40 of the NIRC, tax free-exchanges are allowed for two instances: transfer to a controlled corporation; and, merger or consolidation.

“In the first instance, no gain or loss shall be recognized if property is transferred to a corporation by a person in exchange for stock or unit of participation in such corporation of which as a result of such exchange said person, alone or together with others, not exceeding four persons, gains control of said corporation,” the NIRC said.

The board likewise approved the cancellation of the increase in authorized capital stock, which was based on the share swap transaction approved by the Securities and Exchange Commission on March 28, 2011.

Solar Philippines completes Calatagan solar farm

By Danessa Rivera and Iris Gonzales (The Philippine Star) | Updated February 29, 2016 - 12:00am

http://www.philstar.com/business/2016/02/29/1557736/solar-philippines-completes-calatagan-solar-farm

MANILA, Philippines – Solar Philippines, one of the largest developers of rooftop solar power plants in Southeast Asia, has completed its 63.3-megawatt (MW) solar farm in Batangas, providing additional power supply in the western part of the province.

In a statement, the firm said its solar project in Calatagan has started generating power weeks before the Department of Energy (DOE)’s deadline of March 15, 2016.

Solar Philippines, led by 22-year-old entrepreneur Leandro Leviste, also said the solar farm was developed, financed and completed exclusively by a Philippine company.

The project was made possible through the support of local banks, namely Philippine Business Bank (PBB), BDO Unibank Inc., China Banking Corp., and Bank of Commerce.

“Our banking partners have given unprecedented support, and we look forward to extend these partnerships into future projects,” Leviste said. 

It also claimed it is the largest solar project completed in the Philippines to-date.

The solar plant, which comprises over 200,000 panels on a 160-hectare property, is now supplying enough power for the entire Western Batangas.

The Calatagan solar project is expected to offset over 1 million tons of carbon dioxide, equivalent to planting over five million trees in the next three decades of its operation.

During construction, the project employed 2,500 people and is expected to continue to employ at least 100 people, boosting the local economy of Batangas.

Solar Philippines will soon begin construction of its next projects in Mindanao and Luzon that would generate a total of 500 MW by 2017.

“Whereas others see solar as just a part of their portfolio, we believe that it will one day supply the largest share of the energy mix,” Leviste said. 

“Costs continue to improve, and solar will soon become cheaper than coal. As the only local company organized to develop and build solar farms from end-to-end, we are in a unique position to realize that potential,” he added.     

China’s State Grid committed to Vis-Min interconnection

by Myrna Velasco February 28, 2016

http://www.mb.com.ph/chinas-state-grid-committed-to-vis-min-interconnection/

Houston, Texas – State Grid Corporation of China, the foreign technical partner of the National Grid Corporation of the Philippines (NGCP), is committed to the wish of the Philippine government to advance the long-planned Visayas-Mindanao transmission interconnection project.

In an interview here following a presentation to international journalists of its Global Energy Interconnection (GEI) strategy on the sidelines of the IHS-CERA Week, State Grid Vice President Wang Yimin has noted that “as far as the investment is concerned, we will invest according to the return of the project.”

He has set some early caveat to the project though, that interconnection of power grids via submarine cable “is often 10 times more expensive compared to overhead transmission lines of the same length.”

Wang said they will have to assess the viability of the project then – not only on investment return but also on its affordability to Philippine consumers.

It is NGCP, with the aid of State Grid, that is undertaking the new feasibility study to link-up the two grids via the proposed Negros-Zamboanga interconnection route.

Based on a direction being set by the Philippine government and as anchored on the feasibility study approval being sought from the Energy Regulatory Commission (ERC), the new timeline of the project’s completion would be by 2021.

“Different projects may have different situation, roughly I can say if we compare with the same length of the transmission submarine cable, it is at least 10 times more expensive compared to the overhead transmission line,” Wang reiterated.

He asserted that so far, State Grid is satisfied with its Philippine investment as technical partner to NGCP in the 25-concession deal for the country’s transmission assets.

“Yes, of course, we are satisfied. We entered the Philippine market several years ago and operation is very successful… in the past five years, State Grid has several investments – every project has been successful, including in the Philippines, Australia, Brazil, Portugal and Africa,” Wang stressed.

He added that despite the “less mature dynamics” of the Philippine power industry, the Chinese firm still sees enormous investment opportunities in its electricity system.

“We are ready to further our business in other countries, including the Philippines, if conditions will allow… the Philippines is a developing country and the power grid is not so strong, so we need to further develop, so I think there are many more opportunities in the Philippines for investment,” the State Grid executive added.

In his plenary speech, State Grid chairman Zhenya Liu has noted that they have already invested $36 billion for power asset acquisitions in overseas markets.

Incidentally, the Philippines had been their strategic take-off point for offshore ventures, which at this point, already span across continents.