RP Energy to resolve geological issues

MANILA, Philippines —  Redondo Peninsula Energy Inc. (RP Energy) has enough time until the second half of 2020 to resolve geological issues and finalize which power plant technology to use for the stalled construction of the 2x300-megawatt (MW) coal-fired power plant in Subic, Zambales.

RP Energy – a consortium composed of Meralco subsidiary Meralco PowerGen Corp. (MGen), Aboitiz Power Corp. and Taiwan Cogeneration International Corp. – is currently resolving the stability issue of the site and the change in technology, said AboitizPower COO Emmanuel Rubio.

“Issues like this with geological conditions is very tricky. In fact, one of the recommendations I believe is to let it rest for one rainy season and that’s rainy season up to 2020,” he said. 

“The recommendation on all plant options are all early days. A number of options are just being presented, but there is no decision yet on which one to take,” Rubio said.

But as a shareholder in RP Energy, AboitizPower is open to any technology as long as it is competitive and it can serve the needs of the power grid.

“Coal will always be an option. Maybe an opportunity for us to consider a different technology, supercritical to ultra supercritical. That’s why it’s all options at the moment. It’s good to be in a position where you have a lot have options,” Rubio said.

For now, the focus is to resolve the geological issue near the project site.

“There’s a hill behind the site, that’s the one that’s moving, not the site itself. We just want to make sure we protect ourselves from that geological condition once we make a decision on putting up the plant,” Rubio said.

RP Energy has tapped a consultant to address the slope issue in the site. So far, it is working on a solution which will be up for discussion and approval in a board meeting in June, Rubio said.

“The solution for the slope is up for board approval in June. Once approved, then they would have to work on the slope and with the recommendations to actually wait for it stabilize for one rainy season,” he said.

Earlier this year, Manila Electric Co. (Meralco) chairman Manuel V. Pangilinan said Meralco PowerGen Corp. (MGen) is exploring the possibility of converting the stalled coal power plant of RP Energy to newer coal technology or a liquefied natural gas (LNG) plant.

Apart from resolving the slope issue of the site, RP Energy still has time to revise its plan because its power supply agreement (PSA) has not yet been approved by the Energy Regulatory Commission (ERC).

RP Energy’s PSA with Meralco for a 225-MW capacity was submitted to ERC in April 2016 which, in turn, has prevented RP Energy from issuing a notice-to-proceed to its engineering, procurement and construction (EPC) contractors – contractors Korean firm Doosan Heavy Industries & Construction Co. Ltd. and local company Azul Torre Construction Inc. – by Dec. 31, 2017.

This has also prevented the project company from achieving financial close as its loan facility expired on Jan. 3 last year.

Since then, RP Energy has been implementing activities to safeguard the condition of the project site in fulfillment of its obligations to the Subic Bay Metropolitan Authority and the Environmental Compliance Certificate. 

Originally, the project has an estimated cost of P41 billion with the first 300 MW unit targeted in 2020 and the second unit after one year.

Despite the delay, RP Energy is classified as a committed project by the Department of Energy (DOE), has an environmental compliance certificate (ECC) from Department of Environment and Natural Resources (DENR) and approved and registered by BOI as a preferred non-pioneer enterprise.