Philippines needs 7000 MW to avert energy shortage

Officials of the Philippine government said the country will need 7150 MW within the next ten years if an energy crisis is to be averted.

Energy Undersecretary JV Emmanuel de Dios briefed the press last month stating that the 7.6 per cent growth figure within ten years was in line with expectations that the local economy would expand by 5.4 per cent a year. Dios referred to the Philippine Energy Plan covering 2003-12 and said the estimated investment needs stood at PHP388bn ($7.3bn).

Expected to come on stream during the period 2004 to 2006 is a 40 MW wind project by Philippine National Oil Company Energy Development Corporation, the 350 MW Caliraya-Botocankalayaan expansion facility, the 25 MW Northwind power facility, a 345 MW San Roque hydropower facility in Luzon, the 40 MW Northern Negros geothermal facility and a 200 MW coal fired facility in Mindanao.

The reason no power shortfall has arisen up until now, explains Roger Lim, CEO of East Asia Utilities in Lapu-Lapu City, is due to the supply of 100 MW from Palimpinon, Negros Oriental and 180 MW from Tongonian, Leyte through a submarine cable. But as demand increases, he envisages a power crisis as early as 2005.

Vietnam gets World Bank backing

The developers of Vietnam’s Phu My 2.2 power plant have reached out to the World Bank for a $75m loan to construct the $480m project. The 715 MW gas-fired power plant will help to ease power shortage worries throughout the country.

The loan, inclusive with a ten-year grace period, will cover defaults on debt service payments. The partial risk guarantee will mitigate sovereign and political risks for commercial lenders by ensuring the contractual obligations of the government.

Elsewhere, consortium leaders – France’s Electricité de France along with Japan’s Sumitomo Corporation and Tokyo Electric Power Company – continue with construction works to build a power plant in the Southern province of Ba Ria-Vung Tau. The project is the country’s second largest foreign investment after the $1.3bn Nam Con Son gas complex. All projects will address Vietnam’s growing energy demand that has been outpacing GDP by 13-15 per cent in the last five years.

India to install $48m Vizag II HVDC system

India’s PowerGrid Corporation has selected ABB to design, build and install a 500 MW high voltage direct line system. The contract is worth $48m.

The system will connect two vital regional grids to feed power to millions of consumers in the eastern and southern parts of the country. The project – Vizag II – is to be installed alongside an existing HVDC station, increasing the capacity for high voltage power exchange by 500 MW. The project is expected to be completed by 2005.

EU, USA review nuclear deal with North Korea

The EU and US have expressed concern over their continued participation in a programme to construct nuclear power plants in North Korea after learning the country is developing nuclear weapons. President Bush of the US named the country as being part of the so-called ‘Axis of Evil’.

North Korea recently admitted to the US that it had been running a secret uranium enrichment project to support a weapons programme. The North Koreans argue that the US was not abiding by a 1994 agreement to supply safe nuclear reactors, but the US was unmoved by their stance.

The EU backed the US claiming it would be very difficult to continue with the power projects unless the North Koreans make it clear that they will stop developing nuclear weapons. Aside from the EU and the USA, Japan and South Korea have also provided funds for the $4.6bn project.

Structural reform underway in China’s power industry

China’s power sector is making drastic changes to break up the country’s state-owned power utility, State Power Corporation, into five generation and two grid corporations to promote a higher level of competition.

The regrouping, hoped to be completed by the end of this year, will consist of setting up a national power regulatory committee, two power grid corporations and five independent power generation groups – Datang Power Generation, Shandong International Power Development Company, State Power, China Power International and Huaneng Power International Inc.

The power grid reforms will involve setting up the State Power Grid Corporation and the Southern Power Grid Corporation. The State Grid will establish regional companies all over the country. The Southern Grid will be act as a stock company covering areas such as Yunnan, Guizhui and Guangxi.

News digest

China: Foster Wheeler announced that it has completed work on a 2100 MW (6 x 350 MW) coal fired plant in Shanxi province, 800 km south west of Beijing – the first coal-by-wire power plant to be undertaken in the People’s Republic of China for Yangcheng International Power Generating Company. Foster Wheeler was awarded $360m contract funded by the Export-Import Bank of the US, to design and equip the Yangcheng power station and also acted as co-consultant to Yangcheng on civil works, commissioning and erection of the plant.

Japan: Tokyo Electric Power Co said that it falsified data during government safety tests ten years ago to keep a nuclear power plant in operation. The company will suspend the operation of the 460 MW Fukashima Daiichi nuclear reactor. The Nuclear and Industrial Safety Agency has drafted rules aimed at preventing cover ups of defects at nuclear power plants. The regulations call for surprise inspections of nuclear facilities and set standards for allowing a plant to continue operating if a defect does not compromise safety.

Philippines: The PNOC-Energy Development Corporation has signed a memorandum of agreement with the Aboitiz group for the construction of the second phase of a proposed $120m wind power project.

Philippines: The Philippine government has said it hoped to generate $2bn from the sale of the country’s power transmission company. It estimates $5bn in total revenue from the sale of Napocor’s generation and transmission operations. Foreign owners will be restricted to 40 per cent of the Transco share, while the remaining 60 per cent must be held by Philippine investors.

Thailand: Tractebel has agreed to sell 100 per cent of two of its Thai subsidiaries, Nong Khae Cogeneration Company and Samutprakarn Cogeneration Company to Gulf Electric Public Company, a Thai-Japanese joint venture company. Both subsidiaries own and operate 121 MW of cogeneration facilities as part of Thailand’s Small Power Producer Programme.

Vietnam: Electricity of Vietnam has set up a $196m joint venture company to build a 600 MW coal fired power plant in Haiphong City. The authorities of Haiphong have approved building of the power plant, estimated to cost $640m.

Vietnam: The World Bank will provide Vietnam with $225m credit to help the country carry out a project to optimize the electricity transmission system and reduce electricity losses from 15.5 per cent to ten per cent. The project is due for completion by 2007.