Another SPNEC project hits snag on grid woes

SP New Energy Corp. (SPNEC) is experiencing delays in the construction of its 500-megawatt (MW) solar farm in Nueva Ecija due to right-of-way and grid connection issues, with a portion of the project’s commercial operations pushed back to the latter part of 2025.

The Manuel V. Pangilinan-led company is developing the Sta. Rosa Nueva Ecija 2 Solar Power Project. Dubbed NE 2 Project, it would be established in two phases.

The first phase is a 225-MW solar power plant in Barangay Las Piñas, Peñaranda, which would be divided into two parts: Phase 1A covering 50 MW and Phase 1B with 175 MW. The second phase, meanwhile, would be for the development of an additional 275-MW capacity.

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In a disclosure to the local bourse on Thursday, SPNEC said Phase 1A of the project was already “installed.” However, right-of-way challenges are hindering it from building a transmission line, which would allow the plant to deliver power to the main power highway.

“Subject to the resolution on the right of way issues and the completion of the line connecting the plant to the transmission grid, Phase 1A is expected to achieve commercial operations sometime [fourth quarter] of 2025,” SPNEC said.

The company originally targeted to make Phase 1A operational by the middle of this year. Phase 1B, on the other hand, was supposed to be energized by end-2025.

It also noted that while preconstruction or development work for the rest of the solar farm has “progressed significantly,” ground works have yet to make headway.

“Construction works have not yet started on account of grid constraints,” it said.

The company serves as the renewable energy vehicle of Meralco PowerGen Corp. (MGen), the power generation unit of Meralco. The Pangilinan group took control of SPNEC after purchasing a big block of shares from founder Leandro Leviste.

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Last month, the company bared it was looking for a possible new location for a 280-MW solar farm project it had committed under the government’s green energy auction program (GEAP).

To recall, the company asked the Department of Energy (DOE) in August to terminate the award it bagged in 2022 for the project, also in Nueva Ecija, due to transmission woes. The GEAP seeks to accelerate the growth of renewable energy capacity.

The DOE is currently filtering out “nonserious” developers that are unable to finish projects on time. It said at least 105 clean energy projects were already facing termination.

Sought for insights, Jose Layug Jr., president of Developers of Renewable Energy for Advancement Inc., said he hoped the DOE would only cancel deals “that are indeed nonperforming in terms of predevelopment and securing permits.”

Layug said the agency must “consider lack of or insufficient transmission capacity on the targeted commercial operations date as acts of force majeure.”

For a generation plant to sell its capacity, it has to be near or connected to transmission assets owned by the National Grid Corporation of the Philippines. While developers can build a line for interlinking with the main grid, they have to deal with various issues including clearing right-of-way.

“[The DOE must] treat service contracts as primarily a platform to study the feasibility/availability of the particular [renewable energy] resource and therefore assist the private investors in their efforts to build the … plant,” Layug told Inquirer.