Subic power station

From Global Energy Monitor

Subic power station is a cancelled 600-megawatt (MW) coal-fired power station in Zambales Province, Philippines.

Location

The map below shows the plant's site, in Sitio Naglatore, Cawag Barangay, Subic Municipality, Zambales Province.

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Background on Plant

Subic power station is a proposed $1.1-billion, 600-MW coal-fired power plant in the Subic Bay Freeport Zone. The leading proponent of the Subic power station is AboitizPower, which is undertaking the project with power distributor Manila Electric Co. and Taiwan Cogeneration through a vehicle firm called Redondo Peninsula Energy Inc. (RP Energy).[1]

In July 2011, Manila Electric Co. (MERALCO), the Aboitiz Group, and Taiwan Cogeneration Corporation signed a memorandum of agreement to build a 600 MW, $1.28 billion coal plant in Subic Town, on the Redondo Peninsula in Subic Bay, in the province of Zambales. The plant would be built by the joint venture Redondo Peninsula Energy (RPE).[2] Environmental permits were issued for the project in December 2012.[3] MERALCO is the majority owner of the project, with a 52% share and the other owners owning an equal share of the remainder, or 24% each.[4]

In May 2013, the regional Court of Appeals of the Philippines — while also rejecting aspects of opponents' legal claims against the project — invalidated the Environmental Compliance Certificate issued by the EMB "due to various defects and non-compliance with legal procedures/requirements concerned," and ordered a halt to the construction of the plant.[5] The company continued with site preparation work, beginning in Q3 2013, but held off on further construction until the appeal was completed.[4]

In February 2015, the Philippines Supreme Court overruled the Court of Appeals and reinstated the project's Environmental Compliance Certificate. MERALCO's president, Oscar Reyes, said that the company hoped to award the engineering, procurement, and construction (EPC) contract and finalize the financial arrangements by mid-2015, at which time construction would begin. MERALCO hopes to complete construction by mid-2018.[6][7] As of May 2015, it was reported that the sponsor had chosen an Engineering, Procurement, and Construction (EPC) contractor and had "tapped" a consortium of local banks for financing.[8]

In March 2016, Meralco chairman Manuel V. Pangilinan said that the company would probably build the plant in two phases of 300 MW each, and that construction would begin in the first quarter of 2016.[9] That schedule has since been pushed back.

In October 2016, RP Energy signed a construction contract with Azul Torre Construction and a supply contract with Korean firm Doosan Heavy Industries & Construction to build the plant. Construction is planned for January 2017, and operation by mid-2020.[10]

In January 2017, RP Energy signed an initial $600 million long-term financing agreement with three banks for the plant's construction. As of May 2017, RP Energy was awaiting approval of power supply agreements from the Energy Regulatory Commission before beginning construction. RP stated that it was ready to begin construction as soon as these agreements were finalized.[11]

The plants Enginering, Procurement, and Construction (EPC) contract expired in January 2018 due to its failure to complete a purchasing agreement.[12] In March 2018 RP Energy canceled the order for two coal-fired generators from Doosan, citing delays.[13]

In January 2019 it was reported that because of delays the project may be converted from coal to gas.[14] In April 2019 AboitizPower announced that the project would be delayed for one year. With no progress in over two years the project appears to be shelved.[15]

In May 2019 the Supreme Court of the Philippines invalidated the plant's Power Supply Agreements (PSA's) because they had not gone through a competitive selection process (CSP), delaying development of the plant. In all seven plants owned by Meralco or contracting with Meralco had their PSA's invalidated by the ruling.[16]

In April of 2021, RP Energy announced that they were cancelling plans for construction of the Subic coal-fired plant, in a victory for the movement opposing the plant's construction since 2011. A spokesman for Aboitiz suggested that the company may construct a gas-powered plant at the Subic site instead.[17]

October 2020 moratorium on greenfield coal plants

On October 27, 2020 the Philippine Department of Energy imposed a moratorium on the construction of new or "greenfield" power plants, meaning those which have yet to begin construction.[18] Meralco and Aboitiz subsequently confirmed that their planned greenfield coal plants were cancelled.[19] In November 2020 DOE Secretary Alfonso Cusi clarified that projects listed as "indicative" by the DOE would still be considered and might still be developed.[20]

Subsidies

On June 1, 2016, the Board of Investments issued a certificate of registration for the project. The certificate entitles RP Energy to import equipment, materials, and spares for the plant for five years free of duties and to receive an income tax holiday for the first four years of commercial operation.[21]

Public opposition

A protest against the Subic Bay plant in Olongapo City on Aug. 29, 2011.

At the project's signing ceremony in July 2011, Alex Hermoso of the Olongapo-Zambales Civil Society Network gave protest letters and an anti-plant resolution of the Olangapo City Council to the company representatives, signaling public opposition and protest against the plant.[2]

While the plant's backers, AboitizPower and the Philippine Department of Energy, argue that the plant is necessary to supply power for growing local demand and ward off a "looming energy crisis," the Panalipdan-Southern Mindanao Network Opposed to Coal-Fired Power Plant argues that no such crisis exists, and that the plant's actual goal is to provide power for proposed mining operations of Xstrata and Sagittarius Mines, Inc. (SMI-Xstrata) in Davao.[22]

Participants in an "anti-coal fun run" in Olongapo City on Jan. 30, 2012.

On Aug. 29, 2011, 3,000 local residents of Olongapo City (the largest city on Subic Bay) and of the province of Zambales participated in a protest against the proposed plant, organized by the Olongapo-Zambales Civil Society Network and the Sigaw ng Lumalabang Olongapeño (Siglo). Among the protesters were Olongapo Mayor James Gordon Jr. and members of the Olongapo City Council, Zambales First District Rep. Mitos Magsaysay, and Zambales Vice Governor Ramon Lacbain. Numerous communities from Subic Bay read resolutions opposing the plant, and pointed out that these local communities had not approved construction of the plant as required under Philippine environmental regulations.[23] In Dec. 2011, when the Subic Bay Metropolitan Authority held a "social acceptability forum" about the plant, RPE representatives, acting on advice from company lawyers, cancelled at the last minute.[24] During the following year, government officials from both Olongapo City and Zambales Province issued repeated resolutions opposing construction of the plant — largely on the grounds that it would impact tourism, which is vital for the local economy.[3]

In Nov. 2011, an official with the Subic Bay Metropolitan Authority confirmed that KEPCO Philippines Corp. had applied to build an additional coal plant in Subic Bay.[25]

In June 2012, following an appeal by the Subic Bay Metropolitan Authority to relocate the plant, Philippine Energy Secretary Jose Almendras refused, arguing that relocating the plant would push back the completion date and thus "jeopardize the power situation in Luzon."[26] This also followed a special report by the Manila Times, which found that "virtually every segment of the Subic, Olongapo City and Zambales province population — as well as the public officials and city, town and provincial councils — had registered, in writing and in marches and demonstrations, in city and provincial council resolutions, their strong opposition to the Aboitiz-Meralco-Taiwan RP Energy project."[27]

A Greenpeace activist speaks at a protest against the Subic Bay plant in Subic on July 27, 2012.

In Oct. 2012, when RPE held a scheduled public consultation as required by the permitting process, company representatives were not able to present a single slide of their presentation before angry residents barraged them with questions, forcing the Department of Environment and Natural Resources to reschedule the presentation.[28]

In December 2012, the Philippine Department of Environment & Natural Resources' Environmental Management Bureau (EMB) issued an amended Environmental Compliance Certificate to the project, despite ongoing public opposition. Many public leaders were highly critical of this move, with Zambales Vice Gov. Ramon Lacbain stating, "I wonder how the [EMB] issued the ECC despite the very strong opposition of local governments and civil society organizations to the establishment of this coal-fired plant within Subic Bay." Jen Velarmino, a spokesperson for the Subic Bay Freeport Chamber for Health and Environment Conservation, criticized the EMB for its provision for providing annual reports to the public on the plant's operations, stating that public input "should have been done first, and the basis of the ECC should have been the concurrence of stakeholders with this project."[3]

In May 2013, the regional Court of Appeals of the Philippines — while also rejecting aspects of opponents' legal claims against the project — invalidated the Environmental Compliance Certificate issued by the EMB "due to various defects and non-compliance with legal procedures/requirements concerned," and ordered a halt to the construction of the plant.[5] Opponents applauded the decision, and called on the Subic Bay Metropolitan Authority to "uphold and honor the results of the Social Acceptability Process which they themselves initiated" by increasing transparency regarding the permitting and construction process.[29]

In February 2015, the Philippines Supreme Court overturned the Court of Appeals' decision and reinstated the plant's environmental permits. The Kalikasan People’s Network for the Environment called the court's decision "appalling."[30]

In February 2018 the Court of Appeals Fourteenth Division denied a petition filed by Subic Bay Freeport Chamber for Health and Environment Conservation (SBFCHC) to stop construction of the plant.[31] SBFCHC alleged that the project will endanger human health and the environment, that its proximity to Subic Bay International Airport creates a safety hazard, and that indigenous people in the area have not been consulted about the project.[31]

Citizen groups

Project Details

Articles and resources

References

  1. Diarmaid Williams, "Aboitiz Power to sign deals to finance 900 MW of coal power," Power Engineering, Jan. 28, 2013.
  2. 2.0 2.1 Consortium to Build Coal Power Plant in Subic, Subic Times, July 22, 2011.
  3. 3.0 3.1 3.2 Subic Folk Protest Coal Plant ECC, Philippine Daily Inquirer, Dec. 6, 2012.
  4. 4.0 4.1 "Meralco acquires 52% share of Subic coal plant," SubicNewsLink, July 25, 2011.
  5. 5.0 5.1 Court Blocks P56-M Coal Power Plant in Zambales, Manila Times, May 28, 2013.
  6. Meralco-led consortium resumes 600-MW Subic coal plant, Rappler, 4 Feb. 2015.
  7. Riza Olchondra. Meralco seeks funding for $1B Subic plant. Philippine Daily Inquirer, 5 Feb. 2015.
  8. Ritchie A. Horario, "MGen’s Subic JV power plant in ‘advanced stage’," Manila Times, May 3, 2015
  9. Danessa Rivera, "Redondo Peninsula to stagger construction of Subic power plant," The Philippine Star, March 3, 2016
  10. Danessa Rivera, "RP Energy inks contracts for Subic coal power plant," The Philippine Star, October 19, 2016
  11. RP Energy set to start construction of 600-MW coal plant this year, Manila Standard, 1 May 2017.
  12. PRIVATE SECTOR INITIATED POWER PROJECTS (LUZON) COMMITTED, Philippine Department of Energy, 31 Oct., 2020
  13. Ronnel W. Domingo, "PH firm cancels P46-B coal-fired plant contract," Philippine Daily Inquirer, March 19, 2018
  14. MGen mulls options for Subic power project, Business World Online, Jan. 21, 2019
  15. Experts defer for 1 year proposed RP Energy coal plant in Subic, Business Mirror, Apr. 29, 2019
  16. Averting a potential power crisis, PhilStar, Jul. 10, 2019
  17. Alena Mae S. Flores, Redondo Peninsula drops 660-MW Subic coal project, Manila Standard, Apr. 28, 2021
  18. Jordeene B. Lagare, DoE issues ban on new coal plants, Manila Times, Oct. 28, 2020
  19. Lenie Lectura, Major coal players to abide by D.O.E. ban on ‘new’ projects, Business Mirror, Oct. 29, 2020
  20. Philippines mulls ban on greenfield coal-fired plants, IJ Global, Nov. 5, 2020
  21. Patrick Roxas, "US$1.2-B coal-fired power plant up in Subic," The Manila Times, 11 February 2017
  22. 12 Frequently Asked Questions on Circulating Fluidized Bed Coal-Fired Power Plant of Aboitiz Power Corporation, No to Coal Plant in Subic Bay website, Aug. 6, 2011.
  23. Residents Reject Subic Coal-Plant Project, Arangkada Philippines website, Sept. 1, 2011.
  24. Subic Coal Plant Developer Snubs Stakeholders' Forum, Subic Times, Dec. 8, 2011.
  25. Another Coal Plant Eyed in Subic, Subic Times, Nov. 22, 2011.
  26. Energy Chief Rejects Transfer of Subic Coal Plant, Subic Times, June 25, 2012.
  27. President Aquino, Please Have Mercy, Subic Times, June 21, 2012.
  28. Subic Stakeholders Force DENR to Reset Coal Plant Consultation, Subic Times, Oct. 22, 2012.
  29. Residents Hail Decision Halting Construction of Coal Plant in Subic, Subic Times, May 29, 2013.
  30. Dee Ayroso. Green groups blast SC overturn of kalikasan writ on Subic coal plant. Bulatlat.com, 8 Feb. 2015.
  31. 31.0 31.1 C.A. junks plea to stop construction of power plant in Subic Freeport, BusinessMirror, Feb. 26, 2018
  32. "Approved Coal Plants in the last two years," Greenpeace, accessed December 2013
  33. "The Power Plant," RP Energy, accessed December 2013

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