Corporate News

2017 commercial start targeted for new Quezon power plant

Posted on September 02, 2013

UNITS of Manila Electric Co. (Meralco) and Thailand’s Electricity Generating Public Company Ltd. (EGCO) target to start commercial operations of the 460-megawatt (MW) addition to the Quezon coal-fired power plant in 2017, an official told reporters last Friday in Muntinlupa City.

Meralco President Oscar S. Reyes said Meralco PowerGen Corp. and New Growth B.V., a unit of EGCO, are eyeing early 2017 for start of operations of the plant in Mauban, Quezon.

“We’re looking at 2017. We will shoot for early 2017 just to ensure that it is responsive to the needs of the Luzon grid and the Meralco franchise area,” Mr. Reyes said on the sidelines of annual stockholders’ meeting of Cosco Capital, Inc., in which he serves as an independent director.

“We’re trying to move this project as fast as possible because there is concern that the demand-supply situation, which is now getting tight, will be tighter,” he said.

“Reserves will be thinning if the growth trajectory of the country continues. It’s best that we ensure the country that we have enough supply.”

Asked on investment cost for the project, Mr. Reyes said the plant will involve “new technology,” hence, “probably relatively higher cost compared to regular… coal-fired power plants; but it’s advantage is efficiency, reliability and availability.”

Saying the planned new unit “will be very competitive,” Mr. Reyes said “financing will be 70% debt and 30% equity.”

Her noted that a coal-fired plant usually costs about “$1.5 million to around $2 million per megawatt.”

Meralco PowerGen and New Growth on Thursday last week signed a joint development agreement for the new 460-MW coal-fired power plant to add the existing facility with the same capacity. Under the agreement, Meralco’s unit will hold a 51% stake in the project while EGCO’s unit will hold the remaining 49% stake.

EGCO holds a 98% stake in Quezon Power (Philippines) Ltd. Co. (QPL), which operates the existing 460-MW plant in Barangay Cagsiay I. The remaining interest is held by PMR Ltd.

The existing plant, which started commercial operations in May 2000, supplies the Luzon grid under a 25-year power supply deal with Meralco, which in turn distributes electricity in Metro Manila, Bulacan, Cavite and Rizal; as well as parts of Batangas, Laguna, Quezon and Pampanga.

EGCO Group, according to its Web site, is engaged in power, service and water businesses. The company owns and develops power plants in Thailand and in other economies.

Meanwhile, Meralco PowerGen has partnered with Aboitiz Power Corp. to form Redondo Peninsula Energy, Inc., proponent of a 600-MW coal-fired power plant in Subic, Zambales. The plant’s commercial operation is targeted for 2017.

Meralco PowerGen has also ventured abroad in partnership with First Pacific Co. Ltd.

The two have incorporated PacificLight Power Pte. Ltd., which holds a 70% stake in GMR Energy Singapore Pte. Ltd. -- owner and developer of an 800-MW natural gas power plant in Jurong Island, Singapore.

The plant is expected to be fully operational this December. -- Claire-Ann Marie C. Feliciano