Released July 21, 2008 | BANGALORE, INDIA
en
Researched by Industrial Info Resources (Sugar Land, Texas)--Conal Holdings Corporation (Makati City, Philippines) has announced plans to build the 200-megawatt (MW) coal-fired Kamanga plant in the coastal town of Maasim in Sarangani province. Conal Holdings is a 40:60 joint venture between Electricity Generating Public Company Limited (BAK:EGCO) (Bangkok, Thailand) and the Alcantara Group (Makati City). The plant will be built with an initial capacity of 200 MW, scheduled to be available by 2011, followed by two incremental expansions of 350 MW each over the next 15 years. After the completion of the final technical surveys, construction is expected to begin by mid-2009. The company has signed an agreement with Sultan Mining and Energy Development Corporation (PSE:SLTN) (San Juan City, Metro Manila) for Sultan Mining to supply coal to the plant after sourcing it from the Daguma coal reserve.
The project is expected to cost about $450 million. Conal Holdings has announced plans to take in investors through a bidding process. Formosa Heavy Industries Corporation (Taipei, Taiwan) has expressed interest in making an investment. The project had met opposition on the grounds of environmental and health concerns. The company has assured the public that it will take adequate measures to ensure that the plant is built and maintained in keeping with Philippine laws. It has committed to the rehabilitation, reforestation and development of Maasim's huge forestlands, grasslands and brushlands to establish a natural carbon sink.
The Philippines's Electric Power Industry Reform Act of 2001 mandated that the generation and transmission assets of state-owned National Power Corporation (Quezon City, Philippines) be separated. All processes related to privatization were to be handled by the government's Power Sector Assets and Liabilities Management Corporation (Makati City). The generation assets are still going through a privatization and restructuring program. The transmission assets were handed over to a new entity, the National Transmission Corporation (Quezon City). These assets are not being sold off but are being offered as 25-year concessions to bidders.
The endeavor paid off, and the nation is out of the crippling power crisis of the early 1990s. According to the Philippine Department of Energy, the power generation capacity has to increase by about 4,074 MW by 2014 to be able to meet the surging demands. This would require an investment of about $4.3 billion. As old power plants are being decommissioned and retired, the inability to commission new ones or expand and upgrade existing ones could cause a severe power shortage. Privatization has attracted substantial investments in the sector. The government has even absorbed a sizeable amount of National Power's debt to attract investors. In an effort to reduce dominance by a few players and to promote competition, no company can own more than 30% of the generation capacity in a grid. Although clean coal technology is still not problem-free, the department has stated the need to consider coal-fired power plants to avert a power crisis by 2009.
Several power plants never took off as planned. In 2004, YNN Pacific Consortium, an Australian-Philippine group, won the bid to develop National Power's 600-MW coal-fired plant in Masinloc, Zambales. However, the transfer could not be completed as YNN Pacific failed to make the required down payment. It could not fulfill its contractual obligations even after two years. Investigations revealed that the company had neither the technical capability nor the capital required to develop the plant. The sale was finally nullified. In a resale held in July 2007, the AES Corporation (NYSE:AES) (Arlington, Virginia) won the bid for $930 million. The plant was National Power's most valuable asset. After refurbishments are completed, it is expected to rekindle interest among foreign investors.
In 2005, Salcon Power Corporation (Makati) and Korea Electric Power Corporation (SEO:015760) (Seoul, South Korea) announced plans to invest $270 million in two 100-MW coal-fired power plants in Cebu province. The plants were expected to go into operation in December 2008. However, three years later, the project has failed to take off. One of the reasons cited is that Korea Electric wanted to sell its power before actual construction and quoted high rates.
Construction of the Bataan Nuclear Power Plant was completed in 1984 at a cost of over $2 billion. The goal was to solve the power shortages in the Philippines, but this 621-MW plant did not generate a single unit of electricity. The project was awarded to a losing bidder; the costs were not clear, safety studies were not adequate, the plant was located near an active volcano, and hundreds of defects were detected, among which were several structural and safety defects. There was intense opposition from the local population as well. Today, the plant is one of the country's biggest white elephants, as successive governments attempt to pay off the massive loans. Had the project been successful, the Philippines could have been able to avert the power crisis of the '90s.
Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.
The project is expected to cost about $450 million. Conal Holdings has announced plans to take in investors through a bidding process. Formosa Heavy Industries Corporation (Taipei, Taiwan) has expressed interest in making an investment. The project had met opposition on the grounds of environmental and health concerns. The company has assured the public that it will take adequate measures to ensure that the plant is built and maintained in keeping with Philippine laws. It has committed to the rehabilitation, reforestation and development of Maasim's huge forestlands, grasslands and brushlands to establish a natural carbon sink.
The Philippines's Electric Power Industry Reform Act of 2001 mandated that the generation and transmission assets of state-owned National Power Corporation (Quezon City, Philippines) be separated. All processes related to privatization were to be handled by the government's Power Sector Assets and Liabilities Management Corporation (Makati City). The generation assets are still going through a privatization and restructuring program. The transmission assets were handed over to a new entity, the National Transmission Corporation (Quezon City). These assets are not being sold off but are being offered as 25-year concessions to bidders.
The endeavor paid off, and the nation is out of the crippling power crisis of the early 1990s. According to the Philippine Department of Energy, the power generation capacity has to increase by about 4,074 MW by 2014 to be able to meet the surging demands. This would require an investment of about $4.3 billion. As old power plants are being decommissioned and retired, the inability to commission new ones or expand and upgrade existing ones could cause a severe power shortage. Privatization has attracted substantial investments in the sector. The government has even absorbed a sizeable amount of National Power's debt to attract investors. In an effort to reduce dominance by a few players and to promote competition, no company can own more than 30% of the generation capacity in a grid. Although clean coal technology is still not problem-free, the department has stated the need to consider coal-fired power plants to avert a power crisis by 2009.
Several power plants never took off as planned. In 2004, YNN Pacific Consortium, an Australian-Philippine group, won the bid to develop National Power's 600-MW coal-fired plant in Masinloc, Zambales. However, the transfer could not be completed as YNN Pacific failed to make the required down payment. It could not fulfill its contractual obligations even after two years. Investigations revealed that the company had neither the technical capability nor the capital required to develop the plant. The sale was finally nullified. In a resale held in July 2007, the AES Corporation (NYSE:AES) (Arlington, Virginia) won the bid for $930 million. The plant was National Power's most valuable asset. After refurbishments are completed, it is expected to rekindle interest among foreign investors.
In 2005, Salcon Power Corporation (Makati) and Korea Electric Power Corporation (SEO:015760) (Seoul, South Korea) announced plans to invest $270 million in two 100-MW coal-fired power plants in Cebu province. The plants were expected to go into operation in December 2008. However, three years later, the project has failed to take off. One of the reasons cited is that Korea Electric wanted to sell its power before actual construction and quoted high rates.
Construction of the Bataan Nuclear Power Plant was completed in 1984 at a cost of over $2 billion. The goal was to solve the power shortages in the Philippines, but this 621-MW plant did not generate a single unit of electricity. The project was awarded to a losing bidder; the costs were not clear, safety studies were not adequate, the plant was located near an active volcano, and hundreds of defects were detected, among which were several structural and safety defects. There was intense opposition from the local population as well. Today, the plant is one of the country's biggest white elephants, as successive governments attempt to pay off the massive loans. Had the project been successful, the Philippines could have been able to avert the power crisis of the '90s.
Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.
