Team Energy defers planned expansion on low demand

MANILA, Philippines – Team Energy Corp. has backtracked on plans to expand its running power plants due to a slowdown in demand. 

Federico Puno, Team Energy president and CEO, said they opted not to proceed with the expansion until such time there is clear indication there would be buyers of the additional capacities. Team Energy took over control of the facilities of the former Mirant Philippines Inc.

“On Pagbilao’s expansion, I said to them the need for it has been pushed back because power demand has been down. So you’re looking at 2012 to 2013 when new plants will be needed,” he said. 

The company earlier carried out a study to expand the 735-megawatt (MW) Pagbilao power plant by another 350 MW.

Puno said the delay in the expansion plan hinges on the government’s new growth targets. 

“Originally, the DOE was forecasting that we would have a shortfall in Luzon in 2010 to 2011. Now, based on current demand growth, I think that has been pushed back to 2012 to 2013,” he said.

He said they are also taking into consideration the contract bidding for independent power producer administrators (IPPAs) before undertaking the expansion program. 

“In terms of the Pagbilao expansion we still have to determine if we will still retain that right once there is an IPPA because the IPPA will eventually own the Pagbilao power plant. So the question is, are we allowed to build another one or should that right pass on to the IPPA?” he said.

He said Team Energy stakeholder   Marubeni Corp. has expressed interest to bid for the IPP contract of Pagbilao.

“Marubeni is still one of the qualified bidders and they are looking at the numbers,” he added.

Puno said the two Japanese owners of Team Energy- Marubeni and Tokyo Electric- have been aggressively scouting for business opportunities in the power sector. 

“As far as Marubeni is concerned they are always on the lookout for possible projects. For Tokyo Electric, this is their first big investment here but they have also indicated that they are looking at other opportunities where they can increase their participation in the power industry,” he said.

He said they would likely take advantage of the passage of the Renewable Energy Act and the incentives attached to it.

“For other projects, we’re looking at maybe geothermal and some renewables,” he said.

He noted that there is a provision in the Renewable Energy Act that may require all distribution and generation companies to allot a portion of their capacity to renewable energy development.

“It will depend on what the RE law says because it says that distribution utilities, suppliers and generators must comply. So if they say five percent of what we sell to National Power Corp. must come from renewables, then we have to develop renewables.If we are mandated, we will look at some potential around Pagbilao for, maybe some small hydros,” he said.