Ayala, Trans-Asia expanding thermal plant in Batangas

MANILA, Philippines - Ayala Corp. and Trans-Asia Oil and Energy Development Corp. are expanding their 135-megawatt thermal power plant in Calaca, Batangas, Ayala said in a disclosure to the Philippine Stock Exchange (PSE) yesterday.

The companies, joint venture partners in South Luzon Thermal Energy Corp. (SLTEC), will soon start the construction of the second unit of SLTEC’s Calaca Thermal Power Plant aiming to start operating in 2016.

Ayala, through its energy arm AC Energy Holdings Inc., is investing P1.5 billion while Trans-Asia also earlier said that it would pour in P1.5 billion, bringing the equity portion of both Trans-Asia and Ayala to P3 billion.

The estimated total cost of the project is P10 billion, Trans-Asia officials earlier said.

SLTEC has tapped Consunji-owned DMCI Holdings, through its wholly owned subsidiary, D.M. Consunji Inc. for the construction of the power plant’s expansion phase.

In a separate disclosure to the stock exchange, DMCI Holdings said D.M. Consunji had signed an engineering procurement contract with SLTEC.

“DMCI together with China National Technical Import and Export Corp. will construct under a turnkey basis a second 135-MW coal-fired fluidized bed (CFB) unit next to the currently under construction unit 1 in Calaca, Batangas,” it said.

The construction of SLTEC 2 is expected to commence in the second half of this year, DMCI also said.

Ayala and Trans-Asia signed the joint venture agreement in 2011 to develop and operate the Batangas coal power plant.

The proponents are optimistic on the business prospects of the plant because of the open access regime, which would soon be in place.

Under the open access regime, large power users will be able to choose their own suppliers, in contrast with the current system where they are limited to the supplier that has jurisdiction over their areas.

Mandated under the Electric Power Industry Reform Act, open access is expected to spur competition among players.

Once operational, the joint venture plans to purchase its coal requirement from the Semi-Calaca Power Corp., a unit of Semirara Mining, which is also owned by the Consunji group.

The Ayalas, meanwhile, formed the joint venture as part of the conglomerate’s strategy to enter the power generation business.