The proposed coal-fired power plant project of Chinese firm Kingstone Energy is not in the “indicative” or “committed” list of projects of the Department of Energy (DOE), hence, that could warrant its ultimate disqualification from the competitive selection process (CSP) of Manila Electric Company (Meralco) for its future power supply agreements (PSAs) that will add 1,800 megawatts into its supply portfolio.
It has been clear in the coal moratorium declaration of the DOE in October last year that it will no longer accommodate new coal plant applications starting from that timeframe.
DOE Assistant Secretary Redentor Delola confirmed that “Kingstone has no registered project with us – neither committed or indicative.”
He qualified that “we endorsed them to the SEC (Securities and Exchange Commission) for registration of the company in December 2019, but no specific project yet at that time.”
On the targeted project site of Kingstone in Tagkawayan, Quezon, it was noted that another company – Orion Pacific Prime Energy Inc. - had proposed a coal plant installation to the DOE, but even that venture has already been shelved.
“The Orion project in Quezon was delisted last September due to non-compliance to our reportorial requirements,” the energy official emphasized.
At this time, the energy department indicated that it cannot establish any connection yet between the two project proponents – as culled from their official records.
Relative to the outcome of last week’s pre-qualification process in Meralco’s CSP, the DOE is being urged to enforce stricter rules in the auction of PSAs for supply to be procured by the DUs.
Kingstone was reportedly disqualified in the CSP based on its technical proposal, but it lodged a motion for reconsideration with Meralco’s third party bids and awards committee (TPBAC).
In an earlier statement to the media, Infrawatch PH Convenor Terry Ridon asserted that “while the CSP has been proven as a viable and transparent process to ensure ‘least cost’ to electricity consumers, the DOE should implement stricter rules to ensure that bidders have proven local track record and pose no national security risks.”
At the very least, the former lawmaker noted the new CSP rules “should thoroughly vet the track record of bidders of future power suppliers.”
Ridon emphasized that in the Meralco CSP, “all bidders, except one, are familiar names in the power industry. These firms have already been generating power for various distribution utilities in the country even prior to the current 1,800-megawatt Meralco bid. The same cannot be said for one bidder, Kingstone Energy.”
Ridon thus stressed “a proven track record in the local power sector should be indispensable in CSP bidding, as it boosts the integrity of the entire bidding process, and raises consumer confidence on the viability of future power supply.”
He added the 1,800MW PSA bidding of the country’s biggest power distribution firm “is no small matter to be left to companies without a local track record, as this constitutes almost 20-percent of Luzon island’s 2020 peak power demand of 10,570 megawatts.”
The former solon further pointed out “Kingstone’s disqualification reflected its failure to grasp local rules and regulations, specifically President Rodrigo Duterte’s pronouncement banning new coal-fired power plants during his term.”