RP, Japan ink $208.5-M power deals

The Philippines and Japan signed yesterday three power-related deals worth $208.5 million.

Energy Secretary Vincent Perez, who joined President Arroyo in her two-day working visit to Japan, said the agreements relate to the establishment of the wholesale electricity spot market (WESM); the construction of the Leyte-Cebu interconnection project; and the construction of the 210 megawatts (MW) clean coal power plant in Northern Mindanao.

President Arroyo witnessed the signing of the agreements between Kyosuke Shinozawa, governor of the Japan Bank for International Cooperation and Philippine Ambassador to Japan Domingo L. Siazon Jr.

"These agreements show the strong confidence and trust of the international banking community on the country’s macro-economic fundamentals," Perez said.

Perez said the three power projects are critical in addressing the country’s power supply requirements.

He said the Leyte-Cebu interconnection will allow an additional 200-MW of cheaper and environment-friendly energy source to be transmitted to the grid. This vital transmission project will ensure stability and reliability of power in the Cebu, Negros and Panay islands, Perez said.

The project involves the installation of a 33-kilometer submarine cable from Talisay, Cebu to Tabangao, Leyte and the expansion of several substation facilities in Cebu and Leyte.

The 210-MW Northern Mindanao power project, on the other hand, will use state-of-the-art clean coal technology to meet the growing power requirements in the area.

Construction of the power project would be completed within 36 months with target commercial operations to start in 2006.

The WESM, the market where the trading of wholesale electricity will be made, has started its initial run last week. The WESM is likened to a stock market where the short-term buying and selling of bulk electricity will be made under a competitive environment.

With WESM in place, consumers will be empowered to choose their supplier of electricity. Initially, big users such as the industries, utilities and the electric cooperatives will directly benefit from this given their huge electricity demand needs.