Oriental Energy to put up hydro plants worth $95M
Oriental Energy and Power Generation Corp. is set to put up two hydropower projects worth $95 million (roughly P4 billion), which will firmly establish its presence in the local energy sector.
According to Oriental Energy president Caroline Tanchay, the company is planning to start construction of a $60-million, 18-megawatt hydropower plant in Aklan, as soon as it finalizes its power purchase agreement (PPA) with Iloilo Electric Cooperative I (Ileco I).
Tanchay revealed that the company had already signed the terms of reference with the electric cooperative and would sign the PPA in the next few weeks.
The full capacity of the plant will be taken up by Ileco I, she added.
Also in the pipeline is a 10-MW hydropower project in Cagayan de Oro, which is worth up to $35 million.
Oriental Energy, Tanchay said, is currently negotiating with possible offtakers of the power to be generated by the Cagayan hydropower plant. These include distribution utility Cagayan Electric Power and Light Company Inc., as well as an electric cooperative in Bukidnon.
The company intends to proceed with the construction of these run-of-river facilities by next year, even if the feed-in-tariff rates for renewable energy sources have not been issued. The price of power to be generated will be based on market prices, Tanchay said.
She explained that, in order to secure the viability of the projects, the company would need to seal long-term contracts with offtakers, such as electric cooperatives and distribution utilities.
Renewable energy projects, Tanchay added, are more viable today due to the availability of financing.
Apart from the two hydropower facilities, Oriental Energy is considering hybrid diesel and hydro facilities to be put up on remote islands that are connected to the grid or areas covered by state-run National Power Corp.’s missionary electrification arm, the Small Power Utilities Group (SPUG).
The company is currently negotiating power supply agreements with the electric cooperatives to support their planned power facilities within the SPUG areas, Tanchay said.
But she declined to identify specific areas pending the completion of these negotiations.
Meanwhile, Oriental Energy is also mulling over plans to bid for the management of the contracted capacity of the 150-megawatt Casecnan hydropower plant in Nueva Ecija, Tanchay said.
State-run Power Sector Assets and Liabilities Management Corp. hopes to bid out the independent power producer administrator (IPPA) contract for Casecnan in the fourth quarter this year.
The Casecnan facility in Nueva Ecija is a combined irrigation and hydroelectric power project, which is the first multipurpose build-operate-transfer project in the Philippines.
A previous report from the Department of Energy, however, noted a possible “major hitch” in the privatization of this IPPA contract as the facility’s ownership may still revert to the government through the National Irrigation Administration (NIA) instead of the IPP administrator, unlike in the case of other IPPA contracts.—Amy R. Remo
