Meralco keen on gas plants

Manila Standard Today

by Alena Mae S. Flores

Manila Electric Co., the country’s largest retailer of electricity, is interested in putting up natural gas plants as part of its foray into the power generation business.

Meralco chief operating officer Oscar Reyes said the company’s plan to put up 1,500 megawatts of generating capacities would likely include natural gas.

“I think it will be a mix. In the earlier stages, we may prefer sort of conventional although more cleaner but conventional. We’re looking at natural gas or LNG [liquefied natural gas] as potential sources,” he said.

Reyes said Meralco would also look into the impact of renewable energy facilities to electricity prices. Meralco wants to produce electricity at a cost lower than P5 per kilowatt-hour.

“We have to balance the challenges of cleaner and greener power generation and the affordability issues that consumers keep on raising,” he said.

Reyes said earlier that Meralco “would most likely be focusing in the early stages toward the more traditional fuels for power generation,” adding that “clean coal will be the most cost competitive.”

“I think the main issues are fuel assurance and price volatility. We have to ensure that we can feel comfortable with continued reliable supply of the fuel. Natural gas or imported LNG will require more due diligence as these will be imported from further locations and will be reliant on the logistics of LNG,” he said.

“Price volatility is more likely high in the case of LNG compared with coal.”

Reyes said Meralco was evaluating what power generation facilities it would go into. Meralco wants a 51-percent stake in the power generation projects.

“It’s in the process of evaluation. We continue to be in discussion with potential partners,” he said. Among the companies that Meralco is in discussions with are DMCI Holdings Inc. and TeaM Energy Corp., which both operate coal-fired facilities.

“Our timetable remains to have a sort of up to 300 MW of peaking capacity available by 2012 or 2013. After that, baseload power plants of up to 1,200 MW. The baseload power plants will be timed between 2014 and 2016,” Reyes said.

Meralco, which has over 4.5 million customers in its franchise area, has been out of the power generation business since 1979.