Banks, govt delays hit Quezon power plant

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Quezon: The former governor of Quezon, Eduardo Rodriguez, who is now the country manager of Energy World Corp. (EWC), has listed two key factors for the delay in the starting operation of the Liquified Natural Gas (LNG)—fired power plant located in Bgy. Ibabang Polo.

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They are, he said, funding requirement with local banks and transmission arrangement with various government agencies.

He stressed this in a letter to the secretary of the Department of Energy, Alfonso Cusi on Aug. 3. The main issue preventing the release of funds with EWC’s lenders, he told Cusi, is the transmission lines, particularly the right of way owned by Power Sector Asset and Liabilities Management Corp. (PSALM).

The power plant project consists of the development, construction and operation of a LNG Hub Terminal and Re-gasification Facility in Pagbilao Grande Island in the province

The EWC’s timetable for commissioning the first gas turbine with a capacity of 200MW is six months after the draw-down of funds under its loan facility with the 3 lending banks: Development Bank of the Phils., Land Bank and Asian Development Bank.

Rodriguez added that EWC’s original plan for its transmission line arrangement involved the construction of 400 meters transmission line to cut in to an existing 230KV Pagbilao transmission line owned by the National Grid Corp. of the Phil (NGCP).

He said that NGCP has advised that Team Energy Corp that operates the nearby 730MW coal-fired power plant is unwilling to allow EWC to connect into the 230KV line as it may interfere or disrupt the coal-fired power plant’s ability to export power from their plant.

He also mentioned the NGCP and the National Corp. of the Phil. have noted that the transmission line is capable of taking up to 2400MW with minor technical modifications.

In a meeting last October attended by DOE, NGCP, NPC, Transco, Team Energy and EWC, it has been agreed in principle that EWC would utilize and upgrade an existing 69KV line, later learned to be owned by PSALM, to transport its power and which the latter has agreed.

Rodriguez, who was also responsible for the construction of the two coal-fired power plants in Pagbilao and Mauban towns sometine in the 80’s and ‘90s during his administration as provincial governor, said that the bank lenders have requested that EWC obtain further confirmation from PSALM on the right of way and EWC’s ability to utilize this right of way and from NGCP clarifying details regarding its connection agreement.

He asked assistance from DOE Sec. Cusi to expedite the transmission arrangements to enable the EWC to obtain funds for the commissioning of the project.

Graham Elliot and Brian Allen, both of EWC, were optimistic the national government agencies in charge of the power needs of the country would come around and see the reality of a better option provided by an LNG-fired power plant.

Elliot and Allen told reporters who visited the project site recently that natural gas is much cleaner, safer and environment-friendly as fuel source for the country than coal in terms of standard emissions in the environment.

Using natural gas instead of coal in generating electric power, the EWC has already constructed a 65 meters concrete storage tank with a capacity of 130,000 cubic meters; a jetty and marine facilities for berthing, unloading and reloading LNG ships; a regasification facility to convert LNG back to natural gas and a 650 MW combined cycle power station all located in Bgy. Ibabang Polo here.

Elliot said EWC already invested about $500 million for its power project, directly hiring more than 500 locals as employees and it is capable of supplying more than 3,000 MW of clean energy from natural gas.

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