Posted on October 03, 2016
MANILA Electric Co. (Meralco) is on the lookout for
more deals with renewable energy companies after it received an offer from two
solar farm developers for electricity supply at P5.39 per kilowatt-hour, which
are way below the current subsidized rate for solar energy.
“We always continually review our
portfolio,” said Lawrence S. Fernandez, head of Meralco’s utility economics.
“We’re waiting for other proponents if they can beat the price that was offered,” he said, referring to proposed power supply agreement from two solar power developers.
Meralco, the country’s biggest distribution utility, received power supply offers from Solar Philippines Tanauan Corp. and PowerSource First Bulacan Solar, Inc., for which it asked a “price challenge” from other suppliers as required by the Energy Regulatory Commission.
“They have around a month to submit alternative offers,” he said. “We’ll have to wait for the deadline.”
The offered price is P3.3 lower than the guaranteed feed-in-tariff (FiT) of P8.69 per kilowatt-hour (kWh) awarded to developers during the second round of installation target set by the Department of Energy for solar energy.
“For this we saw that adding 100 megawatts (MW) to our portfolio will benefit the entire generation cost,” Mr. Fernandez said.
He said if a power supply agreement (PSA) is forged with the two solar developers, it would be Meralco’s first contract for the renewable energy.
He described the offers as a “coincidence” because they were received after the 500-megawatt (MW) installation target was reached after the deadline for the “first to build, first to FiT” race on March 15.
“The second batch of FiT was already filled so maybe developers are now beginning to talk to utilities,” Mr. Fernandez said. “At least people now know that P5.39 is possible,” he said.
Solar Philippines offered to supply 50 MW for 20 years from solar power plants it is developing in Tanuan, Batangas and in Naic, Cavite and their surrounding areas, or an alternative site embedded within Meralco’s franchise area. The first site is expected to operate in February 2017 while the second is to start two months later.
PowerSource’s offered supply of 50 MW will come from its proposed solar farm in Barangay Labne in San Miguel, Bulacan. Like Solar Philippines, it is open to an alternative site embedded within Meralco’s franchise area. The required contract period is 20 years, starting August 2018.
Price challengers are given until 4:00 p.m. of Oct. 3 to submit their expression of interest.
Mr. Fernandez said the company does not have a specific preference for a fuel source or the type of technology from power suppliers, as long as they agree on contract terms and how it fits in Meralco’s portfolio mix.
“By their nature they will produce during their peak hours,” he said about the solar power suppliers.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls.
“We’re waiting for other proponents if they can beat the price that was offered,” he said, referring to proposed power supply agreement from two solar power developers.
Meralco, the country’s biggest distribution utility, received power supply offers from Solar Philippines Tanauan Corp. and PowerSource First Bulacan Solar, Inc., for which it asked a “price challenge” from other suppliers as required by the Energy Regulatory Commission.
“They have around a month to submit alternative offers,” he said. “We’ll have to wait for the deadline.”
The offered price is P3.3 lower than the guaranteed feed-in-tariff (FiT) of P8.69 per kilowatt-hour (kWh) awarded to developers during the second round of installation target set by the Department of Energy for solar energy.
“For this we saw that adding 100 megawatts (MW) to our portfolio will benefit the entire generation cost,” Mr. Fernandez said.
He said if a power supply agreement (PSA) is forged with the two solar developers, it would be Meralco’s first contract for the renewable energy.
He described the offers as a “coincidence” because they were received after the 500-megawatt (MW) installation target was reached after the deadline for the “first to build, first to FiT” race on March 15.
“The second batch of FiT was already filled so maybe developers are now beginning to talk to utilities,” Mr. Fernandez said. “At least people now know that P5.39 is possible,” he said.
Solar Philippines offered to supply 50 MW for 20 years from solar power plants it is developing in Tanuan, Batangas and in Naic, Cavite and their surrounding areas, or an alternative site embedded within Meralco’s franchise area. The first site is expected to operate in February 2017 while the second is to start two months later.
PowerSource’s offered supply of 50 MW will come from its proposed solar farm in Barangay Labne in San Miguel, Bulacan. Like Solar Philippines, it is open to an alternative site embedded within Meralco’s franchise area. The required contract period is 20 years, starting August 2018.
Price challengers are given until 4:00 p.m. of Oct. 3 to submit their expression of interest.
Mr. Fernandez said the company does not have a specific preference for a fuel source or the type of technology from power suppliers, as long as they agree on contract terms and how it fits in Meralco’s portfolio mix.
“By their nature they will produce during their peak hours,” he said about the solar power suppliers.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls.
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