By Lenie Lectura - February 21, 2020
THE Department of Energy (DOE) has
given the Manila Electric Co. the green light to proceed with the publication
of the revised terms of reference (TOR) for the second round of the
competitive selection process (CSP) involving 1,200 megawatts (MW) of new
capacity.
“And finally, there was a meeting of
the minds already. I think it will be published. They asked for
authorization to publish and we’ve given it,” Energy Secretary Alfonso Cusi
told reporters in an ambush interview on Thursday.
Meralco is seeking bids via
competitive bidding for its 1,200-MW capacity requirement by 2024. The
first CSP was declared a failure after only Atimonan One Energy Inc. of Meralco
PowerGen Corp. submitted a bid. MGen is the power-generation arm of Meralco.
Thereafter, the DOE told Meralco to
revise the TOR so more power firms can participate. Meralco relaxed some of the
bid rules in order to accommodate more participants.
Among the DOE recommendations
include stacking of capacity of several power plants to meet Meralco’s
1,200-MW supply requirement and allow not only greenfield power plants, but
include merchant plants as well.
“Well, tinaggap nila [they
accepted it],” referring to the agency’s recommendations, which include any
power plant to contract or sell only a part of its capacity to Meralco.
“We want it to be transparent. We want to invite more participants. We don’t
want it to be restrictive,” replied Cusi when asked why the DOE was pushing for
a revision of the TOR.
Greenfield power plants
are those power projects that would be built from
scratch. Merchant plants are power facilities without an approved
power supply agreement (PSA). The output of merchant plants is traded at
the electricity spot market.
“We’re encouraging merchant power
plants. Let’s allow them to participate. Our policy is that we have been
encouraging merchant power plant,” said Cusi.
When sought for comment, Meralco
utility economics head Lawrence Fernandez said the new bidding dates would be
finalized when the bid committee members convene soon.
“Yes, we received DOE’s letter. For
publication, we just need to convene the TPBAC [Third Party Bids and Awards
Committee] and formally obtain their approval to publish. We also need to
confirm their availability to set the schedules for the Pre-Bid Conference and
the Opening of Bids. These dates will be part of the Invitation to Bid to be
published,” said Fernandez in a text message.
Conglomerate San Miguel Corp. (SMC)
earlier expressed keen interest to participate in the CSP, while Ayala Corp.
said it was reviewing the amended bid rules.
“Yes, we will bid,” SMC
President Ramon S. Ang replied in a text message when asked if the power unit
of SMC will participate in the competitive bidding.
Ang has been telling Meralco to
allow other power plants to join the bidding because the original bid rules
meant for greenfield power requirement were stringent.
Previously, Meralco’s TOR allow
power plants utilizing high-efficiency, low-emission technology.
Mariveles Power Generation Corp., a
joint venture between SMC Global Power Holdings Corp. and MGen, withdrew from
the first CSP because the power plant that would join the auction is a
circulating fluidized bed (CFB) coal-fired power plant.
Another power giant that is expected
to join the second round of CSP is AC Energy.
“We are reviewing it,” said AC
Energy President Eric Francia in a text message. “I hope this CSP
succeeds as we need additional capacity soon.”
AC Energy and SMC previously won in
two other competitive biddings for Meralco’s 1,200-MW brownfield and 500-MW
capacity requirement.
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