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ASSURED
of a power consumer for its additional output, STEAG
AG’s proposed expansion program will be further advanced
with the announced expansion of Hanjin Heavy Industries
and Construction Co. Ltd. (HHIC) for a shipbuilding
facility at the Phividec Industrial Estate in
Villanueva, Misamis Oriental.
STEAG AG
earlier announced that it plans to expand by 100 to 150
megawatts its 210-megawatt coal-fired power facility in
Mindanao, while Hanjin is set to spend a billion dollars
to put up a shipbuilding facility at the Phividec
Industrial Estate.
A source
privy to the discussions said that STEAG and Hanjin
officials have earlier discussed on the latter’s power
requirements owing to its planned shipbuilding facility.
The
source said that Hanjin will require a huge amount of
electricity to run its facility, while STEAG plans to
expand its current capacity.
The
Mindanao coal plant is joint venture between STEAG AG
and State Investment Trust Inc. (SITI).
“Should
Hanjin push through with its planned expansion program,
at least STEAG would no longer require a power supply
contract from the government as it can directly supply
the power needs of the Korean firm,” Energy Secretary
Raphael P.M. Lotilla said.
While
Hanjin’s power requirements are still to be evaluated,
according to sources, its requirements could easily
match STEAG’s additional capacity for its proposed
expansion program.
For its
power requirements in
Subic, Hanjin has direct connection arrangements with the National
Power Corp. (Napocor) and National Transmission Corp.
(Transco) to take advantage of cheaper rates.
On June
27 last year, Hanjin petitioned to ERC that it be
allowed to directly connect to Transco’s grid and source
its power from Napocor with the same rate given to
Special Economic and Freeport Zones.
Hanjin,
in its petitions to ERC, said its shipbuilding operation
is set to start in the middle of 2007, adding that any
delay means loss of foreign-exchange earnings for the
country, loss of earnings for thousands of prospective
workers, and unrealized profits for businesses.
Hanjin
said that Napocor, on one hand, has the right and duty,
under its charter, to sell electric power in bulk to
end-users whose power demand is more than 100 kilowatts.
Transco, on the other hand, is obligated to allow use of
its transmission system by end-users.
Hanjin
pointed out that Napocor and Transco are ideally
situated to provide stable and reliable electricity that
it (Hanjin) needs at a reasonable and fair cost.
Hanjin
said its shipbuilding facility is estimated to use
electric power from a low of 48 million kilowatt-hours
per annum by 2009 year to 107.1 million kilowatt-hours
per annum by 2016.
Assuming
an annual consumption of 48.3 million kilowatt-hours,
its savings on the rate differential is valued at P9.23
million by 2009, and P20.5 million based on the
projected annual consumption of 107.1 million
kilowatt-hours by 2016.
With an
annual turnover of $1 billion, according to Hanjin, the
cost of an hour interruption to Hanjin could amount to
$416,667 ( P20.83 million) using a P50 to a dollar
foreign exchange rate and that these losses will exclude
damage to equipment caused by sudden power outage, the
quality of work in progress, missed delivery schedules,
and its reputation as supplier, which cannot be readily
assessed. |
