SEOUL, South Korea – The operation and maintenance (O&M) contract for the 200-megawatt circulating fluidized bed combustion (CFBC) coal plant in Naga power plant complex in Cebu has been awarded by project developers Kepco SPC Power Corporation (KSPC) to Korea East-West Power Co. Ltd. (EWP).

EWP president Gil Gu Lee disclosed in an interview that they were tapped for the O&M component of the project given their know-how in running a coal facility equipped with CFBC technology.

“We have expertise on that technology that’s why we were tapped for the O&M of the Cebu coal project. We initially have 10 years contract for that,” he said.

EWP is a spin-off power generation company of Korea Electric Power Corporation (KEPCO), which was entrusted mostly with coal-based generation capacity. In Korea, the company has roughly 9,500 MW capacity under its sleeve, and the chunk accounts for ultra super critical (USC) boiler-equipped coal plants, and near-term addition would be the 2x 1,000 megawatts 9th and 10th Dangjin thermal power stations currently under development.

The first unit of 100-MW capacity of the KSPC coal facility in Cebu is targeted on-line by February 2011; while the second unit of another 100-MW will be set on stream by May 2011.

The expanded Naga coal plant is aligned to help alleviate power interruptions and eventually shore up supply reliability in the energy-starved Visayas grid.

The project’s total cost was placed at $520 million, and the equity portion has been shared by partners Kepco and publicly-listed SPC Power (formerly Salcon).

The engineering, procurement and construction (EPC) contract alone that was awarded to Korean firm Doosan Heavy Industries and Construction Companies would cost roughly $300 million.

The off-take agreements for the plant’s capacity were sealed with various electric cooperatives and other buyers across Visayas.

It can be culled from KSPC’s filing with the Energy Regulatory Commission that the proposed selling rate for the facility’s generation is at average P4.2511 per kilowatt hour. The estimation factors in adjustments relative to escalation indices, such as those on foreign exchange rates, fuel prices and international price indices.

Apart from the electric coops, KSPC also plans to offer part of its capacity for the requirements of state-owned National Power Corporation, but the ERC specified this shall be embodied in a separate contract and subject to approval by the regulator.