DOE's Cusi: support and encourage EWC to complete power plant

https://www.philstar.com/business/2019/03/13/1900901/delay-energy-world-corp-power-plant-disrupts-does-supply-plan

Delay in Energy World Corp. powerplant disrupts DOE’s supply plan

Danessa Rivera (The Philippine Star) - March 13,2019 - 12:00am

MANILA, Philippines — The delay inthe gas-fired power plant of Australian firm Energy World Corp. (EWC) “hurts” the Department of Energy’s power supply planning, DOE Secretary AlfonsoCusi said.

Cusi said the 650-megawatt (MW)power plant is a committed capacity and has been included in the PowerDevelopment Plan (PDP).

The project, however, has yet tostart commercial operations.

“It’s hurting us, it’s affecting ourplanning. That is already counted as a committed capacity and we have projectedwhen they will be online. But they have been delayed for more than two years,”Cusi said.

Planned since 2011, EWC’s Pagbilaoliquefied natural gas (LNG) suffered numerous delays due to issues ranging fromvolatile LNG prices, funding, regulatory obstacles and confusion overtransmission arrangements.

Last year, EWC pushed back theoperation of its LNG hub in Pagbilao Grande Island, Quezon from this year toMarch 2020 pending the completion of the tie-in connection to Tayabas-Nagatransmission line of the National Grid Corp. of the Philippines (NGCP).

NGCP’s grant of access to theTayabas-Naga transmission line, a 230-kilovolt facility, will allow up to 200MW of power to go through it on a temporary basis.

As per regulation, Cusi said thereis no penalty imposed on power developers due to delay.

“While we continue to investigate,we can only just push the project and encourage them to complete,” he said.

The DOE has certified that EWC’s650-MW power plant is an energy project of national significance.

The 650-MW power plant, adjacent tothe LNG hub terminal facility, will provide clean electricity which will besold through the wholesale electricity spot market (WESM) to the Luzon grid.

EWC’s LNG terminal is among thefacilities intended to safeguard the country against the anticipated contractexpiration of the Malampaya gas facility by 2024.

Other facilities approved by the DOEare that of Tanglawan Philippine LNG Inc. and First Gen Corp.’s wholly-ownedsubsidiary FGEN LNG Corp.

The government is also studying otheroptions with respect to the Malampaya project, the country’s only gas source.

“The contract will expire by 2024and the question is, what’s next?” So we are studying the options, like takingover, looking for a new operator, or extending the contract,” Cusi said.

DOE is also considering tapping aforeign consultant to conduct a comprehensive study on the future of theMalampaya project.

“We are talking to Wood Mackenzieand IHS Markit for an independent study because we cannot just be dependent onthe study being presented to us by Shell,” DOE undersecretary Donato Marcossaid.

Shell Philippines Exploration B.V.(SPEX) is the lead operator of Service Contract (SC) 38, the contract forMalampaya.