SP New Energy Corporation (SPNEC), is now considering an alternative site for its 280-megawatt (MW) Nueva Ecija solar farm project after the Department of Energy (DOE) denied the firm’s plea for a force majeure.
In a report by Manila Bulletin, the firm had originally secured the project through the first round of the green energy auction (GEA) program and was scheduled for delivery by year’s end.
SPNEC President and CEO Emmanuel V. Rubio confirmed that they have received the DOE’s response saying that the company is now exploring other locations for the project’s capacity, with a possibility of staying within the Luzon grid.
The company is currently drafting a reply, seeking a legal basis for its position while also preparing to relocate the capacity to areas where energy evacuation is feasible.
Regarding the potential forfeiture of the project’s performance bond due to non-delivery of the committed capacity under the GEA, Rubio noted that SPNEC is planning to negotiate with the DOE, proposing concessions on penalties but aiming to retain the performance bond.
The SPNEC CEO added that meetings with Energy Undersecretaries Rowena Cristina Guevara and Sharon Garin had been held to discuss the situation, with SPNEC now focusing on finding a new site because of uncertainties about the availability of the original transmission line.
The GEA terms of reference define force majeure (FM) as an unforeseeable or unavoidable event beyond the control of the winning bidder, which can be caused by natural calamities or human actions such as war or civil unrest.
FM or fortuitous events (FE) can also be triggered by power system emergencies or transmission system issues affecting energy delivery by the winning bidder.
According to the GEA guidelines, a bidder affected by FM or FE is entitled to an extension equal to the duration of the event, but failure to deliver after this extension could result in forfeiture of the performance bond.
The DOE already included the 280MW from SPNEC’s solar project under the GEA-1 award as part of the megawatt additions expected to strengthen the Luzon grid next year.
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