Meralco-led consortium resumes 600-MW Subic coal plant

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Meralco-led consortium resumes 600-MW Subic coal plant
Now that the Supreme Court has ruled in favor of its 600-megawatt power plant, RP Energy hopes to complete construction in 3 and a half years

MANILA, Philippines – Following the Supreme Court’s (SC) decision to junk pleas to terminate the project, the consortium led by the Manila Electric Company (Meralco) hopes to complete the 600-megawatt Subic coal-fired power plant project in 3 and a half years.

On Tuesday, February 3, the SC voted 13-0 in favor of Redondo Peninsula Energy (RP Energy), dismissing a petition for writ of kalikasan filed by militant groups against the project.

Apart from Meralco’s PowerGen Corporation, other members of the RP Energy consortium are Aboitiz’s Therma Power Incorporated and Taiwan Cogeneration International Corporation.

Oscar Reyes, Meralco president, said the utility giant has spent over $1 billion for its subsidiary RP Energy.

Reyes said they hope to complete construction of the project in “roughly 42 months.”

“The site preparation is complete. We have to proceed with the awarding of the EPC (engineering, procurement, and construction) contract and finalize the financial closing. We hope to move on with this on or before middle of this year,” Reyes said.

The petitioners against the project argued that it would cause environmental degradation in Subic Bay, where it is located.

They also cited the alleged flawed process of securing its environment compliance certificate (ECC) under the administration of then president Gloria Macapagal Arroyo.

The High Court, however, junked their petition “for insufficiency of evidence.”

Back to work

RP Energy president Angelito Lantin said the decision serves as the company’s signal to resume filling up the energy demands of the Luzon grid.

“This could not have come at a better and more opportune time considering the challenges we now face in so far as the power supply situation in the Luzon grid is concerned,” said Lantin.

Reyes stressed the importance of the project: “The Luzon grid is in a catch up mode. Luzon grid is in need of critical capacity in order to move from a very tight supply situation to one that allows more adequate reserve.”

He added, “That is really the key to assure supply reliability, availability and very competitive pricing.”

Luzon grid’s power reserve hovered at 1,380 megawatts (MW) on Wednesday, February 4, which is expected to dwindle beginning March this year, the onset of the summer season.

Even Visayas and Mindanao now have thin reserves at 164 MW and 37 MW, respectively.

RP Energy’s 600-MW power plant has been delayed since 2010 due to legal hurdles.

‘Tedious bureaucracy’

In October 2014, Pangilinan said the country’s tedious bureaucracy in securing approval to build power plants has hindered the Philippines’ bid for power supply sufficiency.

Energy Secretary Carlos Jericho Petilla has called on Congress to craft a legislation that would mainstream securing government permits in constructing power plants.

“This is to shorten some of the stumbling blocks in coming up with power plants. This is intended for energy projects. We want a bill that will fast track the processing of permits and, if possible, no TRO (temporary restraining order) against these projects,” said Petilla.

At present, companies wait up to 5 years before they could complete setting up power plants in the Philippines, according to Petilla. – 

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