GNPower, National Grid to put up transmission line in Bataan

MANILA, Philippines - GNPower and the National Grid Corp. of the Philippines (NGCP) have signed an agreement to construct a transmission line in Bataan worth P919 million.

With the agreement, NGCP and GNPower Mariveles Coal Plant Ltd. Co. have sought the approval of the Energy Regulatory Commission (ERC) to proceed with the construction of a 19-kilometer, 230-kilovolt transmission line that would support GNPower’s 600-megawatt (MW) coal plant in Mariveles, Bataan.

In their joint filing, the two companies said GNPower’s additional capacity which will be delivered to the grid through the transmission line assets “will help avert the significant economic cost of protracted brownouts, such as reduced investment, lost production and the loss of business confidence.”

On Jan. 11 this year, this line is necessary to connect the GNPower plant to the Luzon grid.

“To help address the need for additional capacity in the Luzon grid, GNPower will design, engineer, procure, construct, supply, start-up, test, commission, own and operate the approximately 2 x 300 MW pulverized coal-fired power plant located at Mariveles, Bataan, its associated ancillary and auxiliary equipment and associated switchyard and transformers. Once operational, the generation facility will introduce 600 MW of additional capacity to the Luzon grid,” the parties said.

Under the agreement, NGCP will construct the transmission assets and provide the necessary financing for such construction. GNPower will pay NGCP related connection charges.

“The additional capacity to be provided by the generation facility and transmitted to the grid through the connection assets will help avert the significant economic cost of protracted brownouts, such as reduced investment, lost production and the loss of business confidence,” the filing said.

The two parties said there is a need for additional capacities to the grid, citing the Power Supply and Demand Situationer for 2006-2014 of the Energy Department which states that power supply will become critical in Luzon beginning this year.

“By 2011, the dependable capacity will no longer be sufficient to meet Luzon’s required capacity. Furthermore, this generation facility was included in the list of committed projects in the 2007 Power Development Plan Update of the Energy Department,” they said.

According to GNPower, the company has already commenced site mobilization and earth works and will continue the project construction subject to its financial closing early this year.

“Any delays at this point will hinder GNPower’s projected commencement of commercial operations scheduled on late 2012,” it said.

Moreso, GNPower has already obtained and completed the major permits and licenses needed to construction of the power plant, including an environmental compliance certificate from the Environment and Natural Resources Department.

NGCP, meanwhile, said certain enhancements to the transmission system should be made to improve reliability and service particularly because of the advanced age of the certain affected transmission line assets.

“The operation by GNPower of the proposed generation facility is a concrete step in averting a power crisis that will adversely affect the Luzon grid as early as 2011,” the parties said.