Ayala energy arm to double generation capacity by 2020

By Danessa Rivera (The Philippine Star) | Updated July 15, 2016 - 12:00am

http://www.philstar.com/business/2016/07/15/1602829/ayala-energy-arm-double-generation-capacity-2020

MANILA, Philippines - AC Energy Holdings Inc., the investment arm of the Ayala Group for the power sector, is eyeing to double its generating capacity by 2020 as it nears its 1,000-megawatt (MW) capacity target this year, according to its top official.

The company is now setting a 2,000-MW goal in the next four years, a “next natural target” as it will cross its 1,000-MW target within the year, AC Energy president and CEO Eric Francia said.

The energy portfolio target was set as a five-year plan in 2011.

“We’re crossing that this year. Now, we’re looking at doubling that to 2,000 by 2020,” he said. “We’re putting that as our marker, our aspiration for now and then we’ll adjust accordingly whether we can exceed that or if there’s too much supply coming on, we’ll assess.”

Earlier, Francia said the company would meet its five-year goal when it starts expanding the 2x660-MW coal-fired Mariveles power station later this year. AC Energy currently has around 650-700 MW of attributable capacity.

AC Energy has a 17 percent stake in the expansion of GN Power Mariveles, after it partnered with US-based GN Power, owned by Nauruan-American firm Power Partners Ltd. Co., in 2014.

Other investors in GN Power include Sithe Global Power LLC, a company owned by investors of The BlackStone Group. The 1,000-MW target capacity will be a mix of operating and under construction power projects across the country.

In the next plan, AC Energy is looking to close the gap between fossil fuel and renewable energy (RE), the company official said.

“We want to close that gap. RE is around 10 to 15 percent of our portfolio in terms of attributable capacity. We want to increase that eventually,” Francia said.

“Right now, we’re just in wind and solar. We’re bigger in wind than in solar but that can change over time the way solar prices continue to behave, they continue to decline. We expect to do more investments in solar,” he said.

AC Energy has three RE projects: the 52-MW Northwind Power Development Corp. in Bangui, Ilocos Norte; the 81-MW wind farm in Pagudpud, Ilocos Norte through its affiliate North Luzon Renewable Energy Corp. (NLREC) and the 18-MW solar plant in Negros Oriental, which is a joint undertaking with Bronzeoak Clean Energy Inc.

But adding more RE projects will not be an overnight process, Francia said.

“Scale is challenging for renewables. When you go conventional, it’s easier to get scale. It’s going to take time but our aspiration is really to get this higher over time. We’ll take 10 percent at a time, take it to 20 percent, to 30 percent until we have a nice balance,” he said.

Other projects that make up the 700 MW portfolio include the 2x135-MW coal-fired power plant in Calaca, Batangas under South Luzon Thermal Energy Corp. (SLTEC), a joint venture with Trans- Asia Oil and Development Corp. and the 4x135- MW coal-fired power plant in Kauswagan, Lanao del Norte in Mindanao through GN Power Kauswagan Ltd. Co., a limited partnership among AC Energy, the Philippine Investment Alliance for Infrastructure (PINAI) and Power Partners Ltd. Co.