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DMCI plans to invest $300m in hydro sites

May 7, 2016 | Editor

DMCI Power Corp., a unit of the Consunji Group, plans to invest $300 million to build 100 megawatts of run-of-river hydro power projects to expand its power generation portfolio.

“We’re looking at some mini-hydro opportunity, run-of-river,” DMCI Power president Nestor Dadivas told reporters.

The projects include four different hydro potential areas in Sultan Kudarat with a combined capacity of 90 MW and a 9-MW hydro project in Cagayan de Oro City.

“In Cagayan de Oro… we’re looking at buying in. They have a  service contract but it expired and they are renewing it,” Dadivas said.

“In Sultan Kudarat, it’s around 90 MW, but there are like three or four different areas there,” he said.

The projects are estimated to cost $3 million per megawatt to construct.

Dadivas said the company was focused on run-of river hydro projects among the renewable energy technologies.

“Too many people are getting into solar, biomass. We’re not convinced on feedstock availability. It must be significant to make it happen and the seasonality of it,” he said.

Davidas said while hydro projects were more costly to build at $3 million per MW, compared to $2.5 million for coal plants, the fuel of the hydro projects is free.

“What is good about hydro is that the fuel is free.  You just have to look at the capacity factor. The capacity factor should be high for the project to earn because your project cost is also high,” Dadivas said.

He said the government was looking at a capacity factor of 46 percent for hydro, compared to solar at 20 percent and  biomass at 30 percent.

“If we ever go into renewable, we’re going hydro because it has a bigger capacity factor and a big percent of project cost would be civil works which can be undertaken by DMCI,” he said.

Davidas said the company was carefully studying hydro power development, because “we’ve never done hydro in our life yet.”

“We’re in the due diligence stage right now. We also have funding for the CDO project of P2 billion from LandBank,” Dadivas said.

Dadivas said the company was in the initial stage of identifying locations for the renewable energy projects.

“Right now, we have identified one or two areas. But the locations could still change depending on the results of our feasibility studies,” Dadivas said.

The company cited market conditions and government incentives as the reasons for its planned foray into renewable energy.

“Having priority dispatch, government support and a competitive price at a growing but highly competitive power industry makes these RE projects more attractive,” Davidas said.

DMCI Power was established in 2006 to provide sufficient and reliable electricity to areas that are not connected to the main transmission grid.

posted May 06, 2016 at 11:45 pm by Alena Mae S. Flores

http://thestandard.com.ph/business/205039/dmci-plans-to-invest-300m-in-hydro-sites.html

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