Alterpower in talks with electric cooperatives for PSA

April 23, 2018 | 12:04 am By Victor V. Saulon, Sub-Editor

http://bworldonline.com/alterpower-in-talks-with-electric-cooperatives-for-psa/

ALTERPOWER SPECIALIST, Inc., a new player in the renewable energy sector, is planning to contract up to 80% of the capacity of a Davao del Sur solar farm it recently bought, as it hold talks with electric cooperatives in the area for a power supply agreement (PSA).

Jose Silvestre M. Natividad, who heads Alterpower, said he targets “at least 70% or 80%” of the solar farm’s 28.6 megawatt (MW) to be under a PSA, with the rest of the capacity to be traded at the wholesale electricity spot market (WESM).

“In six months’ time, 50%,” he told reporters when asked about the timeline in closing a supply contract with electric cooperatives.

“In stages of 5, 10 [MW],” he said about the phase of contracting, adding that closing a PSA takes time because of regulatory requirements, including a competitive selection process that subjects the contract to price challengers.

Alterpower is one of the special purpose vehicles under Clean Renewable Energy Solutions Philippines, Inc. (Cresphil), which Mr. Natividad runs as president and chief executive officer.

The unit secured on April 12 the approval of the Philippine Competition Commission for its acquisition of the shares of Enfinity Philippines Renewable Resources Fourth, Inc., one of the solar energy companies that aimed to qualify for the government’s guaranteed 25-year feed-in-tariff (FiT) but failed to meet the March 2016 deadline.

Enfinity is the latest among the “stranded” solar farms that are struggling after building a project at an investment cost that is way above the projected revenue streams from trading its capacity at the electricity spot market.

Its solar power project in a 34-hectare land farm in Brgy. San Roque, Digos City, Davao del Sur was acquired by Alterpower, a company established to construct and maintain solar electric facilities. Cresphil is the company’s majority shareholder.

In its approval of the deal, the PCC said it “does not result in substantial lessening of competition in the relevant market, considering that post transaction, sufficient constraints remain from other market participants and does not result in increased likelihood of anti-competitive coordinated behavior.”

The solar project was completed in 2016 with Sterling and Wilson of India as its international engineering, procurement and construction contractor. Meralco Industrial Engineering Services Corp. is its local contractor.

After the transaction, Alterpower will own 65% of Enfinity’s outstanding capital stock. The solar project is directly connected to the Mindanao grid.

Mr. Natividad said Cresphil’s aspiration is to reach an installed capacity of 100 MW in five years. These projects will be under Cresphil and various companies focused on hydroelectric power and a hybrid of hydro and solar.

The target capacity will be achieved through acquisitions and new projects, he said. Cresphil and its units have under construction a 1.8-MW mini hydro facility in Mindanao that might qualify under the FiT scheme, which was extended for two years until 2019. Another ongoing project is an 8.5-MW hydro plant in the north.

Another 1.5-MW hydro is being eyed for acquisition in the north. Other projects being considered in various parts of the country are 12-MW and 2-MW hydro facilities in Mindanao.