Page 11 - AsiaElec Week 16

AsiaElec
NEWS IN BRIEF
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The power plant will be built and operated as an IPP under a “build-own-operate” concession contract in the form of a 21-year power purchase agreement with state utility Tenaga Nasional.
Tadmax said that building and commissioning the power plant would cost MYR3.30bn ($751mn).
About 80% will be funded via a debt instrument in the form of sukuk loan, and
the remaining 20% would be funded via a combination of internally-generated funds and or additional funds from the shareholders of PIPP.
The sale of the stake to KEPCO allows it to realise its investment in PIPP.
“The company expected to recognise
a net gain on disposal of approximately RM11.02mil and a net inflow of RM32.45mil in cash. This will provide additional working capital for the group’s existing and future projects as well as for the group’s future investments in other complementary businesses and/or assets,” it said.
Under a prior heads of agreement dated September 14, 2018, Tadmax was to partner KEPCO and Selangor state-linked Worldwide Holdings on the project, under a proposed shareholding ratio of 40:25:35 in PIPP respectively.
Tadmax said it would invest the proceeds of the sale to KEPCO in future investments in other complementary businesses and assets.
The proposed power plant would comprise two CCGT blocks, with natural gas as the main fuel and distillate as the back-up fuel.
COAL-FIRED GENERATION
Ayala to fully abandon coal investments by 2030
Ayala Corp. has announced it will fully offload its investments in coal-fired power
developments by 2030, joining other big companies around the globe in shifting away from projects that contribute to climate change.
The oldest Philippine conglomerate’s energy unit, AC Energy Philippines, is “making a commitment to transition to a lower carbon portfolio by rebalancing our generation portfolio to grow our renewable energy assets,” Fernando Zobel De Ayala, company chair, said in a message to stockholders.
The move came as coal-fired power — which the Philippines and other developing economies in Southeast Asia have largely turned to — comes under increasing environmental oppositions, prompting investors, world leaders and global financial institutions to divest from fossil fuels to avoid criticism over climate change.
Fossil fuels, when burned, release carbon dioxide and other greenhouse gases, making them major contributors to global warming.
In 2019, the Ayala-led firm agreed to transfer its assets in the 552MW GNPower Kauswagan’s (GNPK) coal-fired power project to its partner, Power Partners Ltd. Co.
In 2019, the company also completed the sale of a 49% voting interest and 60% economic interest in AA Thermal, Inc. — which owns a plant in Bataan — to Aboitiz Power Corp.
But analysts expect coal to stay dominant in the Philippines’ power sector, stressing that fossil fuels will remain the most practical means to generate affordable electricity needed to support a growing economy. Fitch Solutions, a unit of the Fitch Group, forecast coal to make up 59.1% of the country’s total power mix by 2028.
AC Energy President John Eric Francia said around 700MW of new capacity was added to the company’s portfolio last year, of which 60% were from renewable sources.
“We will continue to expand and diversify our generation capacity and will target to exceed 1,500-megawatt of capacity by 2020
and significantly increase our renewables capacity,” he explained.
China relaxes restrictions
on coal power expansion
for third year running
China has lowered the risk ratings for coal- power overcapacity in many parts of the country for the third year in a row.
The move opens the door for more regions to build coal power in 2021-23 and has been interpreted by experts as a signal that coal will be a key part of the 14th Five Year Plan, which will start next year.
Every year the National Energy Administration (NEA) releases a “risk
alert for coal power capacity planning and construction,” which looks ahead three years.
The 2023 Risk Alert gave a red rating for capacity adequacy – meaning there’s a high risk of coal power overcapacity – to just three regions. Orange ratings increased from two to three, and all other regions were rated green.
The alert’s resource constraint assessment, which tracks coal and water availability, remained unchanged from last year,
with the same 12 regions rated as red. As
for profitability, ten regions were rated red – meaning operations are likely to be unprofitable – and the number of orange regions dropped from two to one.
While profitability warnings are only advisory, a red or orange rating for capacity adequacy or resource constraints means binding restrictions: these regions cannot approve or start construction on new coal power projects intended to supply local demand; only a green rating gives permission.
Over the past three years, the risk alerts have seen the number of regions with red or orange warnings for capacity adequacy and resource constraint fall from 26 to 17 to 13 for the years 2021, 2022 and 2023.
Week 16 22•April•2020
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