Cebu Energy fires off $450-M power project

01/19/2010

Energy consortium Cebu Energy Development Corp. (CEDC) reached a milestone in the construction of its 246-megawatt (MW) coal-fired power plant last Jan. 17 when shareholders of the company witnessed the initial firing of firts boiler out of three 82-megawatt (MW) units expected to come online this year.

Among the shareholders, present were CEDC senior adviser and Metrobank Group chairman Dr. George Ty, CEDC chairman Francisco Sebastian, president Jesus Alcordo, vice chairman Elon Ting, and members of the board of directors selected from consortium partners Global Business Power Corp. (GBPC), Aboitiz Power Corp., Vivant Energy Corp. and Formosa Heavy Industries Corp. (FHIC).

These four companies entered into joint ventures to form two holding units: Global Formosa Power Holdings Inc. and Abovant Holdings Inc. with the former controlling 56 percent of the venture.

Charlie Tsiou, FHIC vice president, was also present during the milestone firing. Formosa serves as the consortium’s technical partner for engineering, procurement and construction of the $450-million power plant.

Boiler 1 is set to deliver power to the Grid by the first week of March 2010. CEDC’s next two units are expected to be online in June and December of this year respectively.

Among the bigger off-takers of the power plant is Visayan Electric Co. which signed a memorandum of agreement last year with CEDC under a 25-year cooperation period.

Prior to the initial firing, concurrent president for GBPC and CEDC Jesus Alcordo assured the shareholders that project construction was on schedule and that the firing “marked the beginning of a cleaner transitional technology that would not only help address the power shortage in Cebu but also address Cebu’s need for improved environmental management.” The power plant uses the latest circulating fluidized bed boiler technology which reduces emissions and wastes at practically negligible levels. Alcordo reported that negotiations with cement companies were being finalized for the sale of the power plant’s coal ash before the three units come online.

Alcordo further noted that the initial firing signaled Cebu Energy’s commitment to help propel the economic development of the province. Based on internal projections of the company, Cebu is expected to hit a high of about 703MW in the next three years. “We decided to put up this power plant with the end-goal of helping improve Cebu’s economy, create more jobs and help Cebu move forward with more reliable, stable and reasonably priced power,” Alcordo said.

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