Delay in Energy World Corp. power plant disrupts DOE’s supply plan

MANILA, Philippines — The delay in the gas-fired power plant of Australian firm Energy World Corp. (EWC)  “hurts” the Department of Energy’s power supply planning, DOE Secretary Alfonso Cusi said.

Cusi said the 650-megawatt (MW) power plant is a committed capacity and has been included in the Power Development Plan (PDP).

The project, however, has yet to start commercial operations.

“It’s hurting us, it’s affecting our planning. That is already counted as a committed capacity and we have projected when they will be online. But they have been delayed for more than two years,” Cusi said.

Planned since 2011, EWC’s Pagbilao liquefied natural gas (LNG) suffered numerous delays due to issues ranging from volatile LNG prices, funding, regulatory obstacles and confusion over transmission arrangements. 

Last year, EWC pushed back the operation of its LNG hub in Pagbilao Grande Island, Quezon from this year to March 2020 pending the completion of the tie-in connection to Tayabas-Naga transmission line of the National Grid Corp. of the Philippines (NGCP). 

NGCP’s grant of access to the Tayabas-Naga transmission line, a 230-kilovolt facility, will allow up to 200 MW of power to go through it on a temporary basis.

As per regulation, Cusi said there is no penalty imposed on power developers due to delay.

“While we continue to investigate, we can only just push the project and encourage them to complete,” he said.

The DOE has certified that EWC’s 650-MW power plant is an energy project of national significance.

The 650-MW power plant, adjacent to the LNG hub terminal facility, will provide clean electricity which will be sold through the wholesale electricity spot market (WESM) to the Luzon grid.

EWC’s LNG terminal is among the facilities intended to safeguard the country against the anticipated contract expiration of the Malampaya gas facility by 2024.

Other facilities approved by the DOE are that of Tanglawan Philippine LNG Inc. and First Gen Corp.’s wholly-owned subsidiary FGEN LNG Corp. 

The government is also studying other options with respect to the Malampaya project, the country’s only gas source.

“The contract will expire by 2024 and the question is, what’s next?” So we are studying the options, like taking over, looking for a new operator, or extending the contract,” Cusi said.

DOE is also considering tapping a foreign consultant to conduct a comprehensive study on the future of the Malampaya project.

“We are talking to Wood Mackenzie and IHS Markit for an independent study because we cannot just be dependent on the study being presented to us by Shell,” DOE undersecretary Donato Marcos said.

Shell Philippines Exploration B.V. (SPEX) is the lead operator of Service Contract (SC) 38, the contract for Malampaya.