BACKGROUND
The 70-megawatt (MW) (two units of 35 MW) hydroelectric power plant in Bakun River located in Benguet and Ilocos Sur provinces was constructed by the Luzon Hydro Corporation (“Luzon Hydro”), a corporation formed by the consortium of Northern Mini Hydro Corporation, Ever Electrical Manufacturing Inc., Aboitiz Equity Ventures, Incorporated, and Pacific Hydro Limited under a Build-Operate-Transfer (BOT) scheme to supply the energy requirements of the Luzon Grid.
The development of the Bakun A/B hydro power plant project is part of the 1993-2005 Power Development Plan (PDP) for the Luzon Grid. This power plant is intended to lessen the National Power Corporation’s dependence on the base-load thermal power plant which uses imported fuel. Hydro plants have the advantage of being fuel-free. However, hydro plants have to shoulder higher fixed costs from the water infrastructure, e.g., dams, tunnels. Furthermore, the operations of hydro plants are dependent on the amount of water available. Hence, although hydro plants are built to generate a certain capacity (installed capacity), their dependable capacity is usually only about 25% of the installed capacity.
This power plant is covered by a Power Purchase Agreement between National Power and Luzon Hydro, which was signed and executed on 24 November 1996 for a cooperation period of 25 years from February 2000 to February 2025.
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Plant Name |
70-MW Bakun Hydroelectric Power Plant |
Name of Independent Power Producer |
Luzon Hydro Corporation (through accession undertaking) |
Power Plant Structure |
Composed of two units with an installed capacity of 35 MW per unit |
Location |
Bakun, Benguet, and Alilem, Ilocos Sur |
Installed Capacity |
70 MW |
PROJECT RATIONALE
The development of the Bakun A/B hydro power plant is part of the 1993–2005 PDP for the Luzon Grid. The development of this project was undertaken by the private sector on a BOT basis. As an initial step in its development, National Power issued a notice of public bidding inviting all interested parties to tender a bid to undertake the project. In response to this invitation, a consortium composed of Northern Mini-Hydro Corporation, Ever Manufacturing, Aboitiz Equity Ventures, and Pacific Hydro submitted a bid for the development, construction, and operation of a consolidated hydroelectric facility under a BOT arrangement. The consortium was awarded the right to develop the project after a thorough evaluation of its proposal.
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