Subic power firms expand to meet growing demand

SUBIC BAY FREEPORT — Power companies in the Subic Bay Freeport are now putting up additional production facilities and improving distribution systems in anticipation of the influx of more investment projects here in the next few years.

Subic Bay Metropolitan Authority (SBMA) Administrator/ chief executive officer Armand Arreza said the Redondo Peninsula Energy Inc. will start the construction of a $420-million coal-fired power plant here next year, at the same time that the Subic Enerzone Corp. will be undertaking a P210-million systems installation and rehabilitation project.

“Investors worldwide are looking for investment sites with stable but cheap power supply, along with accessibility and security, investment perks, and skilled manpower,” Arreza explained.

“These power projects are crucial to the growth of the Subic Freeport and the local economy because they will help reduce the cost of electricity in Subic, as well as address a projected increase in power demand,” he said.

According to Subic Enerzone, operator of the power distribution system in the Subic Freeport, power consumption in its Subic franchise area has been increasing over the past few years, with a total of 17.4 million kilowatt hours consumed last month.

“This is why we have to upgrade the power system in Subic, and put up additional generation facilities on top of Subic’s total output of 130 megawatts, so that we could be more competitive,” Arreza said.

Arreza pointed out that Malacañang’s recent order to expand the coverage of Subic’s tax- and duty-free regime is expected to increase investment projects in the locality and further tax power supply in the Luzon grid where a 1,950-megawatt shortage is projected within the next few years.

“You add to this equation the continuing growth of Clark Freeport, the completion of the Subic-Clark-Tarlac Expressway, and the full operation of Subic’s new container terminal and the Hanjin shipyard project, and you’d have an exponential growth in power demand here,” he said.

Arreza said the proposed 300-megawatt coal plant to be built near the Hanjin shipyard is designed to partly address the expected surge in electricity demand in Luzon.

“But we’ve been assured by the project proponent that it will also help bring down power cost in the Freeport, and that’s what the SBMA is primarily interested in,” he said.

The project, a joint venture of Aboitiz Power Corp. and Taiwan Cogeneration Corp., is scheduled for completion in 2011, with another 300-megawatt facility set to follow three years later.

Arreza said that with the expected influx of investments, a progressive power program has to be in place within a short period to maintain Subic’s momentum in investment generation.

“We have proven in the past two years that Subic can attract $1 billion in new investments each year. We were able to do that because the SBMA has been improving the facilities and systems in Subic for the past several years,” Arreza explained.

“This is really a very competitive business, and we’re playing hardball with more advanced economies like Singapore, Malaysia and Thailand,” he added. “Once your efforts to woo investors go slack for even just a moment, then you’d be left years behind.”

Because of this, Arreza said the upgrading and rehabilitation program to be undertaken by Subic Enerzone Corp. next year will also play a big part in Subic’s overall investment generation strategy.      — With Aisa Osorio