Meralco mulls purchase of up to 100MW additional solar capacity

October 19, 2017 By Victor V. Saulon, Sub-Editor

http://bworldonline.com/meralco-mulls-purchase-100mw-additional-solar-capacity/

MANILA ELECTRIC Co. (Meralco) is considering to buy up to 100 megawatts (MW) solar capacity after it agreed to three power supply agreements (PSAs) that have become the benchmark for pricing electricity produced by the renewable energy.

“We’re looking at an additional solar power that’s been offered to us,” Oscar S. Reyes, Meralco president and chief executive officer, told reporters on the sidelines of an industry forum.

“We’re looking whether we can at this stage accommodate 50 to 100 MW more and then we’ll take a look at the impact on the distribution grid and certain circuits,” he added.

Mr. Reyes said the company was studying the acquisition of more solar capacity because of its impact on the electricity distribution system.

“We’re doing it in a way that we also want to ensure that the penetration or injection of solar in the system is something that the distribution grid can absorb without adversely affecting the quality of power performance,” he said.

He said if there is a capacity to buy more, the move would also be determined by whether it is “right price and beneficial to our overall generation charge.”

“We’re in discussion with certain parties,” Mr. Reyes said. “Maybe in the next three to six months.”

On Oct. 9, 2017, Meralco announced that it had executed a PSA with Solar Philippines Tarlac Corp. for the sale and purchase of solar power at a rate of P2.9999 per kilowatt-hour. The rate is significantly lower than the prevailing solar feed-in-tariff rate of P8.69/kWh.

The PSA came after Meralco subjected an offer of P3.50/kWh from another company to price challengers as required under rules on competitive selection process. It is to take effect upon the approval by the Energy Regulatory Commission (ERC).

“We’re also looking forward to how ERC will resolve the pending petitions,” said Lawrence S. Fernandez, Meralco vice-president and head of its utility economics. Mr. Fernandez was referring to Meralco’s previous two PSAs with separate solar power developers priced at P4.69/kWh and P5.39/kWh.

Gloria Victoria C. Yap-Taruc, one of four ERC commissioners, said the pending PSAs are being studied by the regulator’s technical working group before these are transferred to the commissioners for deliberation.

Meralco buys power for distribution to its 6 million customers based on its requirement. Last year, its energy sales reached 40,142 gigawatt-hours, higher by 8.1% compared with the previous year.

“In terms of our procurement of [solar] renewables, we already have signed up about 185 [MW],” Mr. Reyes said.

For October, PSAs and independent power producers respectively account for 43% and 45% of Meralco’s total requirements. Power purchases from the wholesale electricity spot market makes up the rest.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc.

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