TO ENHANCE the power supply in the Province of Cebu and prevent potential power shortages, plans are underway for the construction of a 150-megawatt power supply plant in Daanbantayan, Cebu.
This, after the Cebu Provincial Government signed a memorandum of understanding (MOU) with Spain-based Acciona Energia Global, S.L. and Makati-based Freya Renewables Inc., jointly referred to as AEG-Freya, on Thursday, Oct. 12, 2023.
Both companies had expressed their intent to build and develop the proposed solar power plant in the northern Cebu town at no cost to the Provincial Government.
According to the MOU, the proponents submitted their tentative unsolicited proposal to the Economic Enterprise Council (EEC) on Sept. 27, 2023, after discovering the possible shortage of power supply in the Province of Cebu.
“The construction of the 150-Megawatt Solar Power Plant Project could greatly improve the power supply in the Province of Cebu and avert the projected power shortage that the Province may experience in the future,” the MOU read.
Rafael Esteban Fernandez de Cordoba signed the MOU on behalf of Acciona Energia Global, S.L. while Fermin Alvarez signed for Freya Renewables Inc.
On Thursday, Cebu Gov. Gwendolyn Garcia said the solar power plant to be constructed in the northern part of Cebu will be the first of its kind in the entire Philippines.
Garcia said the proponents are from the largest power supplier in Europe, and they are now partnering with the Province of Cebu.
She said the partnership is mutually beneficial because while Acciona will bring in cheaper renewable energy, it also acknowledged the need for the Province’s assistance in overcoming challenges along the way.
She said the Province is ready to provide assistance, whether it involves engaging with various communities, collaborating with distribution utilities, or working with the Department of Energy.
“In the next year and a half, longest two, we will be able to provide cheaper energy for the province of Cebu, enticing more investments and more importantly helping those who are in the lower ranks of the economic pie,” Garcia said.
As outlined in the MOU, once the project is completed, it will generate income for the Province through a percentage share of Freya’s revenues from electricity sales.
Provincial Legal Officer Donato Villa Jr. told SunStar Cebu that the next step involves the proponents submitting a final copy of their proposal to the Provincial Government.
Villa said the Provincial Government will then proceed with a “Swiss challenge“ for the proposal.
Unsolicited proposals are subject to a Swiss challenge, which allows competing bids from other companies or groups. If a challenger submits a better proposal, the original proponent is given the right to match it.
As of the MOU signing, AEG and Freya had already been granted the original proponent status through EEC Resolution 2023-0902.
Both parties have to diligently negotiate for the terms of reference of the 150-megawatt solar power plant in Daanbantayan, Cebu.