The Energy Development Corporation (EDC) has announced plans to allocate as much as P14 billion towards capex for 2016 with the goal of upgrading reliability of its power plants. In 2015, the firm has spent P12 billion on capex. The EDC also hopes to make inroads in the area of renewable energy by expanding its portfolio.
Capex hiked, refurbishment to fix reliability issues in Tongonan
The announcement of the allocations for capital expenditure comes on the back of fiscal year 2015 financial numbers being shared. The EDC has experienced issues with reliability at their Tongonan Geothermal Plant facility leading the organization to plan for reviewing and enhancing reliability of all its existing plants. Transmission constraints had also led to the Burgos Wind Project being curtailed temporarily.
The EDC CFO, Nestor Vasay went on record to say that much of the increased capex was earmarked for refurbishing the existing portfolio of plants, but the primary focus would be on Tongonan because it had resulted in P700 million in lost revenues due to its unscheduled six month shutdown. As such Tantoco confirmed that the EDC was committed to investing in the range of P4.3 billion for improving its reliability.
Richard Tantoco, the President and CEO of the EDC said that a complete rehab and retrofitting of the company’s Tongonan units was slated for October. New turbine rotors already ordered from Mitsubishi will replace the existing equipment to deliver better efficiency and higher output from the same facility. This overhaul would take about six months to be completed.
The EDC’s Leyte based Upper Mahiao Geothermal Plant is also likely to see investments to boost reliability. Like with the Tongonan plant, the EDC has already placed an order, this time with GE for new motors. These are set to come in by the second half of the year.
Expansion still on the cards
While refurbishment was a priority, the EDC would still make good on its expansion plans in the areas of solar, geothermal and wind energy both on domestic shores as well as overseas. The capex does also cover for drilling costs.
The company would not have an urgent requirement for fundraising, with about P18 billion in cash readily available in the EDC coffers. However, Tantoco did say that the EDC is also hoping to raise an additional P5 billion by way of loans towards the end of 2016, something they planned to work out with local banks.