POWER NEWS JUNE 26, 2012

Toledo Power bags supply deal with Carmen Copper

MANILA, Philippines - A subsidiary of tycoon George S.K. Tys Global Business Power Corp. has bagged a deal to supply electricity anew to the mining operations of Carmen Copper Corp. (CCC) in Cebu. Global Power, through its wholly-owned subsidiary Toledo Power Co., signed an agreement with CCC for the supply of up to 60 megawatts (MW) of electric power beginning Dec. 26, 2014, the energy firm said in a statement. Under the deal, Toledo Power will design, engineer, finance and construct a 82-MW clean coal-fired power plant in Toledo City, Cebu. The expansion of an existing coal plant aims to supply much needed power to CCC to address the projected increase in [the miners] power requirements as a result of the expansion of its mining operations, Global Power said. CCC is a subsidiary of listed Atlas Consolidated Mining and Development Corp. With the proposed expansion of the Toledo Power facility, Global Power seeks to respond to the projected increase in power demand in the area and provide more efficient energy, the company said. It will replace the current coal facility with a power facility that will use a circulating fluidized bed boiler, which is one of the latest, environment-friendly, clean coal technologies available, Global Power said. To date, Toledo Power operates two power plants: the 60-MW Sangi coal-fired power station and the 40-MW Carmen diesel engine power station. This is further to Global Powers commitment to ensure sufficiency of power supply in the Visayas, the firm said. Toledo Power has been in the power generation business for the past 43 years. It was initially put up to serve the electric power requirements of the Toledo Copper mine complex. When the mines closed in the mid-1990s, Toledo Power was sold to Global Power (formerly Mirant Global Corp.), catering to the power requirements ofCebu City, Toledo City and the Cebu Industrial Park in Balamban, Cebu. Global Power is a leading independent power producer in the Visayas regionwith a combined gross dependable capacity of 627 MW, comprising 619.5 MW of power supplied to the Visayas grid and 7.5 MW supplied to Mindoro Island. Its two largest power generation subsidiaries - Panay Energy

Development Corp. and Cebu Energy Development Corp. own power plants with a combined installed capacity of 410 MW. Global Powers parent firm, GT Capital Holdings Inc., the flagship company of taipan George Ty, raised P21.6 billion in the countrys largest public offering last April. CCC, a unit of listed Atlas Consolidated Mining and Development Corporation, has started the production of higher-grade copper ore from its Carmen ore deposit. In a disclosure to the Philippine Stock Exchange, Atlas said the expansion of its operations was pursued two months ahead of schedule. Atlas, which operates the Toledo copper mines in Cebu, said the expansion of CCCs operations from the Lutopan ore deposit marks a milestone in its drive to enhance its mining efficiencies and optimize its throughput potential. As we establish steady production from the Carmen ore body, we will continue to work towards achieving expansion goals through cost reduction measures and process improvements, said CCC vice president Adrian Ramos. CCC produced 1.246 million tons of ore in May 2012, up 26.75 percent from 983,000 tons in the same period last year. This resulted in the production of 13, 172 dry metric tons (DMT) of copper concentrate with an average metal grade of 26.64 percent copper, 3.09 grams per ton of gold, and 20.11 grams per ton of silver. The ore was sourced from the Lutopan pit which is part of the 1,634-hectare Toledo copper mine in Cebu. Three shipments of 4,892 DMT, 4,939 DMT and 5,173 DMT of copper concentrates were made in May, totaling 15,004 DMT. The shipped concentrates averaged 26.95 percent copper, 3.07 grams per ton gold and 21.18 grams per ton silver. The payable metal content of the concentrate was 8,568, 000 pounds copper and 1,351 ounce of gold. The estimated value of the shipments was $33.66million based on provisional and hedged prices of $3.68 per pound of copper and $1,580 per ounce of gold.

Hydroelectric plant to be built in Mindanao

CAGAYAN DE ORO -- A new mini hydroelectric is expected to further improve the competitiveness of this city when it comes online in 2014. Principals of the Turbines Resource and Development Corp. (Turedeco) broke ground for the project last Saturday in Barangay Lumbia this city and in Baungon, Bukidnon. It will be built at the left bank of the Cagayan River approximately 142 meters downstream from the junction of the Cagayan and Bubunawan rivers. "Our run-of-river plant will have an installed capacity of nine megawatts and will be a merchant plant with on-grid connectivity," said Fr. Emeterio J. Barcelon, S.J., Turedeco president. "The project is estimated to cost around P1.5 billion," said Edgar N. Seronay, senior assistant vicepresident and regional head for the Development Bank of the Philippines (DBP), which has been tapped as lead bank for project financing. In addition, the Land Bank of the Philippines and shareholders from the Barcelon, Arguelles and Lagapa families will also contribute capital for the project. "The project will be financed under DBPs Environment Program for Renewable Energy and is part of the banks commitment to environmental protection and sustainable development," Mr. Seronay said. -Michael D. Baos

Lopez group eyes 600-MW hydro plants

Proposed projects to tap Angat, Norzagaray rivers By: Amy R. Remo Philippine Daily Inquirer 1:45 am | Monday, June 25th, 2012 First Gen Corp. plans to build two hydropower plants in Bulacan and Nueva Ecija provinces, according to documents from the Department of Energy. PHOTO FROM FIRSTGEN.COM.PH The Lopez-led First Gen Corp. is planning to build in Bulacan and Nueva Ecija two hydropower plants that can generate a combined 600 megawatts. Documents from the Department of Energy (DoE) showed that the company, through its wholly owned subsidiary First Gen Prime Energy Corp., is looking at building a 300-MW hydropower plant that will tap the Pantabangan River in Nueva Ecija.

Another wholly owned subsidiary, First Gen Premier Energy Corp., will likewise look into the feasibility of putting up a 300-MW facility that will tap the Angat River in Norzagaray, Bulacan. These hydropower projects represent First Gens approved renewable energy contracts with the Department of Energy, First Gen president Francis Giles Puno told the Inquirer. Both projects are still in their predevelopment stage and are undergoing site investigation to determine feasibility, Puno explained. The renewable energy service contracts for these two projects were approved by the DoE on March 29. Its service contract for the proposed 30-MW Balintingon hydropower project in Nueva Ecija was also signed on the same day. The three contracts are among the 35 hydro service contracts signed and awarded by the DoE so far this year. The proposed projects are estimated to generate a total of 895.5 MW for the three main grids. First Gen has been aggressively looking at new projects to further expand its clean energy portfolio. The companys gross generation capacity has reached 2,763 MW as of the end of last year, 2,144 MW of which could be considered as its net attributable capacity. The company is also looking at run-of-river hydropower projects in Mindanao that can generate 91 MW in a bid to help shore up power supply on the island. Priority has been placed on two projects worth a combined P10 billionthe 30-MW Puyo project in Agusan del Norte and the 23-MW Bubunawan facility in Bukidnon. The other power projects in the pipeline are expected to be put up in Cabadbaran, Agusan del Norte, and in Tumalaong and Tagoloan Rivers, both in Bukidnon.

Power rate increase in Iloilo draws protests

Philippine Daily Inquirer
8:22 pm | Monday, June 25th, 2012

Militants yesterday launched a series of protest actions against the implementation of a 32-centavo per kilowatt-hour (kWh) increase in electricity rates. Consumers are angry that we have to pay more when electricity rates are already too much just to satisfy profit-hungry companies, said Lean Porquia, spokesperson of the Bagong Alyansang Makabayan (Bayan) in Panay. Bayan led around 30 people who threw rotten tomatoes at the office of Panay Electric Co. (Peco), the citys lone power distributor, during a picket. The Energy Regulatory Commission (ERC) has granted a petition of Panay Energy Development Corp. (PEDC) to recover P692.304 million in commissioning and testing costs. PEDC operates the 164megawatt coal-fired plant, which supplies the bulk of electricity to Peco. An ERC order released this month allowed PEDC to collect the commissioning and testing costs from consumers over a period of five years. The city government is expected to file a motion for reconsideration at the ERC to stop the implementation of the order. Increased business cost Business groups have also opposed the extra charges, saying this will disturb the investment climate in the city and increase business costs.

Randy Pastolero, Peco vice president for operations, said the company would implement the ERC order only after the agency rules on the issue with finality. He said Peco was merely collecting the charges for PEDC. Gil Altamira, commercial operations manager of Global Business Power Corp. which operates the PEDC, said measures were being worked on to cushion the impact of the order, including the reduction of generation costs. We are bound to implement orders of the ERC, but we are studying all options so that it will not burden consumers, Altamira told the Inquirer. Nestor P. Burgos Jr., Inquirer Visaya

Greenergy creates new subsidiary for green venture projects

By Neil Jerome Morales (The Philippine Star) Updated June 26, 2012 12:00 AM MANILA, Philippines - Listed renewable energy firm Greenergy Holdings Inc. has created a new subsidiary to handle its green energy ventures with a Chinese firm. In a disclosure, Greenergy said the Securities and Exchange Commission (SEC) approved the incorporation of Winsun Green Ventures Inc. Winsun, a wholly-owned subsidiary of Greenergy will engage in energy projects including renewable energy resources. In a text message, Greenergy president and chief executive Antonio L. Tiu said the creation of the new firm will facilitate the consolidation of wind power projects. Greenergy is in a joint venture with China-based Tianjin Tianbao for the construction of $1.3 billion worth of wind power projects with a total generating capacity of 1,000 megawatts (MW) in the Philippines in the next 10 years. Winsuns primary purpose is to develop and invest in energy projects, which includes the exploration, development and utilization of renewable energy resources. It can also use renewable energy resources and operate power assets within or outside the Philippines. Winsun has an authorized capital stock of P20 million divided into 20 million shares at a par value of P1 apiece, said Greenergy, which subscribed to P4.99 million worth of shares in the new firm. Under the joint venture, China Power and Greenergy will create a joint working committee to conduct final due diligence for planned power projects. Initial investment will cost $200 million for a 49.5-MW wind energy project composed of 33 units of 1.5-MW wind mills.

Greenergy is also looking at solar power, geothermal energy and hydroelectric power projects here and abroad. Greenergy, which already doubled its authorized capital stock to P2 billion, committed to invest 100 million yuan (around P672 million) to finance start-up science and technology firms and make their innovations commercially available. The company was incorporated as Music Semiconductors Corp. in 1992 to engage in the creation, design, development and manufacture of specialty semiconductor products and to market and sell the same to customers worldwide.

Meralco to source power from SMC unit

By Neil Jerome C. Morales (The Philippine Star) Updated June 26, 2012 12:00 AM Comments (0) MANILA, Philippines - Manila Electric Co. (Meralco) will secure part of its electricity requirements from a subsidiary of diversified conglomerate San Miguel Corp. (SMC). The companys board of directors, in its regular meeting yesterday, approved the grant of authority for the company to enter into a power supply agreement with San Miguel Energy Corp. (SMEC), Meralco told the local bourse. However, the company has yet to specify how much electricity it will buy from the SMC subsidiary. In February, the countrys largest power distributor said it is in talks with SMC for a power supply agreement to ensure continued supply of power to its customers. Early this year, Meralco signed a seven-year supply deal with Therma Luzon Inc., a subsidiary of AboitizPower Corp. Meralco will source 350-megawatts (MW) of electricity from Therma Luzons 764-MW coal-fired plant in Quezon province. Meralco wants to secure electricity from SMEC, which holds the independent power producer contract administrator license for the 1,200-MW Sual coal plant in Pangasinan. The power distributor is locking up power supply deals amid expectations of higher electricity demand from its customers. Meralco added 40,000 new customers in the first quarter, bringing the total to a record 5.07 million as of end-March. Meralco is indirectly controlled by Hong Kong-based First Pacific Co. Ltd. and partly owned by SMC. Meralco, through unit Meralco PowerGen Corp., is building a 600-MW coal-fired power plant at the Subic Bay Freeport Zone in Zambales in partnership with Aboitiz Power Corp. and the local unit of Taiwan Cogeneration International Corp.

It is targeted to start commercial operations in 2015, increasing available electricity in the Luzon grid. The coal plant in Subic is the first of Meralcos numerous power generation ventures, targeting reach a power generation capacity of 1,500 MW.

Bataan suitability as site for coal power plant doubted

The site of the mothballed Bataan nuclear power plant is not a suitable alternative site for the coal power plant being planned for Subic according to Energy Secretarty Jose Rene Almendras. He said that it has been decided by a team of experts that the plant designed to be powered by nuclear energy cannot be converted to be powered by coal and it would be very costly to convert ito into a natural gas fired power plant. If youre going to use that site for coal, you have to clear some areas and retrofit it, he added which will cause the delay in getting power onstream. SBMA officials have asked the government to relocate the plant after the project earned widespread opposition on its possible environmental hazards. The project is being undertaken by Redondo Peninsula Energy Inc. (RP Energy), a joint-venture company among Meralco, Aboitiz Power Corp., and Taiwan Cogeneration International Corp. (TCIC). Almendras noted that BNPP also has an issue in its unloading facility because it had no design for a port. The problem with coal, you need to be an area where you can unload the coal in huge quantities because a 600 MW coal fired power plant will consume a lot. The problem with BNPP was the site is not the best site for a coal fired power plant, because it does not have logistical capability to handle the fuel itself, he said. According to Almendras, the original plan for the BNPP was to have somebody look and see whether they are interested to build a coal-fired power plant in the area. The energy secretary, however, noted that nobody has come back and indicated that there is any strategic advantage to it because of its location and draft of the water, among many other reasons.