SMC readies add’l 900-MW capacity

MANILA, Philippines - Diversified conglomerate San Miguel Corp., (SMC) through its power generation subsidiary SMC Global Power Corp., is on track to add  900 megawatts (MW)of coal-fired capacity by 2016 and 2017 to help address a looming power shortage in the country, its top official said  yesterday.

“We are building 900 MW,” SMC president and chief operating officer Ramon Ang said. This will come from the Limay, Bataan plant with a capacity of 600 MW while another 300 MW will originate from the Malita, Davao plant.

Energy Secretary Carlos Jericho Petilla has lauded SMC’s moves to build power plants amid tight power supply in the country.

He expressed hopes other investors would also jumpstart their plans to build power plants even without contracts with off-takers yet.

“RSA (Ramon S. Ang) is very bold.  He builds plants even without off-takers yet and financial closing. We should have more of his kind,” Petilla said.

SMC Consolidated Power has already commenced the construction of the Bataan power project. It earlier tapped Formosa Heavy Industries as engineering, procurement and construction contractor, which is the same contractor for the Davao coal-fired project.

The Bataan and Davao coal projects are seen to significantly contribute to the country’s energy security efforts.

SMC currently has an installed capacity of 2,545 MW, making it one of the biggest generation companies in the country.

Data from the Department of Energy showed that as of end-2012, the company had a 17 percent market share of the power supply of the national grid and 23 percent share of the Luzon grid.

Petilla has warned of a looming power crisis next year due to tight supply. He recommended the declaration of a state of emergency in the power sector to allow the government to tap additional capacity for 2015.

He said the Philippines will need 9,011 megawatts of power next year, higher than this year’s demand of 8,717 MW on the back of the projected growth in the economy.

Petilla proposed the declaration of a state of emergency in the power sector by invoking Sec. 71 of the Electric Power Industry Reform Act (EPIRA) to give the government the authority to put up additional generation capacity.

The declaration of a state of emergency would allow the government, through the Power Sector Assets and Liabilities Management Corp. (PSALM), to tap additional power capacity for the summer of 2015.

Under the plan, the government, through PSALM, will rent diesel-fired power facilities on short-term contracts of two years if possible.

The EPIRA prohibits the government from constructing power plants.

However, Sec. 71 states that the President, upon determination of an imminent shortage of supply of electricity, may ask for Congress for authority through a joint resolution, to establish additional generating capacity under such terms and conditions may approve.