Following the Department of Energy’s (DOE) rejection of its force majeure plea, Pangilinan-led SP New Energy Corporation (SPNEC) is now looking for an alternative site for the development of the 280-megawatt Nueva Ecija solar farm project it won under the first round of the green energy auction (GEA) program, which is supposedly scheduled for delivery on or before the end of this year.

SPNEC President and CEO Emmanuel V. Rubio told reporters that “we’re looking for possible replacement of the capacity but in a different location,” hinting that the prospective site could still be in the Luzon grid.

He qualified that they already received the DOE reply on their earlier bid for “force majeure” declaration, and that has not been in the affirmative.

“We’re drafting actually the reply looking for a legal basis to stand firm but we’re willing to replace the capacity in other areas where we can actually evacuate the energy,” Rubio noted.

On probability of forfeiture of the project’s performance bond because of the company's failure to deliver the capacity as committed in the GEA, the SPNEC chief executive indicated that “we will ask DOE if they can consider a certain level of the pricing and we are willing to accept concessions on the penalties, but not the performance bond.”

He further disclosed that SPNEC had met with Energy Undersecretaries Rowena Cristina Guevara and Sharon Garin on the matter, hence, the alternative being explored now is  “to look for a new place because we don’t know when that transmission line is going to be available.”

Under the GEA terms of reference, force majeure (FM) or fortuitous event (FE) had been defined as “extraordinary event not foreseeable or avoidable, or an event that could not be foreseen; or which though foreseen, is inevitable to happen on the part of the winning bidder, and is beyond the will, control, participation, and influence of the winning bidder.”

It was further stated that FM or FE shall refer “to an event or circumstance generally caused: (a) by nature, such as but not limited to, fires, floods, typhoons or other catastrophes, or natural calamities; and/or (b) by the acts of man, such as but not limited to: war, national emergencies, revolution, riot, insurrection, civil unrest, or any other similar violent or threatening actions,” or it may also “pertain to any analogous event that may relate to a power system emergency or transmission system issue that shall affect the continuity or delivery of power by the winning bidder.”

The TOR expounded that “ a winning bidder affected by FM or FE shall be granted an extension to commence delivery of supply,” adding that “such extension period shall be equivalent to the duration of FM or FE.”

It was similarly stipulated that  “failure to deliver after the period of extension shall cause the calling of the performance bond in full or in part.”

The 280MW capacity delivery from the solar development of SPNEC under the GEA-1 award had already been accounted for by the DOE as part of the additional megawatts that will help boost Luzon grid supply by next year.

The energy department is very circumspect in allowing transmission-related circumstance for ‘force majeure’ declaration, because that is a dilemma restraining most investors, but some developers pursue more judicious approach when it comes to their project siting to ensure the wheeling of their generated capacities.