13 APRIL 2011
DoE cancels 30-MW biomass project given go-signal by Palawan
MANILA, Philippines – A service contract for a 30-megawatt biomass power project by a Korean firm was among the renewable energy (RE) deals cancelled by the Department of Energy (DoE), but a bizarre twist happened after its Palawan host community gave go-signal for its implementation.
Energy Undersecretary Jay Layug confirmed that the service contract of Phil-Korean Renewable Energy Corporation (PKREC) is considered “cancelled” at this point.
“We sent notice to cancel for failure to comply with work commitments under its RE contract,” the energy official said.
The Korean firm has committed to invest $72 million (approximately P3 billion) for its biomass project which shall utilize wood chips, cornstalks and coconut husks as fuel.
Nevertheless, Layug qualified that the Korean company is afforded the 60-day “curing period” which shall allow it to comply with commitments wherein it has been failing. The deadline for this process is first week of May.
Last week, however, the board of directors of Palawan Electric Cooperative Inc. (PALECO) has voted giving the green light for the project’s implementation. The electric cooperative will be the off-taker (buyer) of the biomass facility’s electricity output.
The conflicting moves of the national government to that of its local counterpart raise the question whether some segments of policymaking can be disregarded based simply on the preference of a host community. In Korea, their Ministry of Knowledge and Economy announced that PKREC has already completed all procedures required by the national and local governments for the project’s execution. It apparently missed out though on the ‘cancellation phase’ of the service contract by the energy department.
It was gathered that the offer price for the biomass-produced electricity to PALECO would be at P8.90 per kilowatt hour (kWh) and will be packaged through a long-term power purchase agreement starting 2013.
Read article source in Manila Bulletin(mb.com.ph), April 13, 2011