SN Aboitiz Power Inc. (SNAP) is finishing the feasibility study to a big-ticket greenfield development, the proposed 350-megawatt (MW) Alimit hydropower complex in Ifugao province.
“We’re finishing our feasibility study. We still have to go through FPIC [free, prior and informed consent]. We have 82 barangays to consult, and then we still need to go through the provincial government,” SNAP Executive Vice President and COO Joseph Yu told reporters in a roundtable discussion over the weekend.
“We still need to sort through land issues of the transmission line. There’s still quite a bit of work to be done,” Yu added.
The facility will be developed by subsidiary SN Aboitiz-Ifugao (SNAP-Ifugao). SNAP is a joint venture between Aboitiz Power Corp. and SN Power of Norway.
The project is composed of three hydropower plants: the Alimit Hydroelectric power plant (HEPP) with a 100-MW capacity, Olilicon Hydroelectric with10 MW, and Alimit Pumped-Storage Hydroelectric with 240 MW.
“The area we’re looking at: there are very few households, less than 20. Indigenous people would be the tougher one… You have ancestral domain, then you have to collaborate with NCIP [National Commission on Indigenous People], then you have to make sure your communication is pretty spot on,” Yu said.
“It’s a fairly complicated project, you need to bring it to the town, communicate it with them in a manner they can understand and appreciate what it does. Also, we do really have to respect the culture, the history and the practices of the people. We view ourselves as a long term partner. You build a hydropower plant, you weave yourself into the community,” he added.
The study covers the technical and financial components, down to power and transmission.
“The business case won’t be ready for another 18 months before we can begin construction. Doing the math, add three to three and a half years for the project, that puts you around 2021 to 2022 or thereabouts,” Yu noted.
SNAP wants to start the project based on a timeframe that signals when the power plants would be needed most to meet the increasing power demand.
“The timeframe, if we push through right now at the current pace, that’s roughly when it will come on stream. If you delay it, you’ll have fewer years of commercial return. If it comes on stream at that point in time, you need to make a forecast on pricing you want to see, and that pricing will be heavily dependent on the pricing of coal, oil, and how much coal, solar, LNG, wind capacity are coming in,” Yu said.
“The challenge here is, the further away it is, the higher the variability of your forecast,” he said.
In terms of pricing Yu said, “We look at where the market’s headed. We look at the demand… the capacities that are coming in… a long term forecast for coal prices. And from there, we look at what kind of pricing we expect to see in the future.”
“Hydro will always have a place in the grid, whether you have a lot of coal coming in.
“We’re perfectly positioned to provide whether it’s baseload, mid-merit or even peaking. We’re also well into ancillary services. Our positioning, by that time, whether now, 2021 or 2022, will always have a place in the grid for that particular capacity,” he added.