San Miguel to sell Limay combined cycle plant

Manila Times.net
Published : Monday, October 03, 2011 00:00 Written by : EUAN PAULO C. AÑONUEVO


SAN Miguel Corp. (SMC) is set to sell the Limay combined cycle power plant to an undisclosed group of investors.


Ramon Ang, SMC president, said they will finalize the sale of the 620-megawatt plant soon.


In place of the existing facility, which is expensive to operate and has deteriorated under government hands, SMC will put up “a greenfield power plant,” which Ang said is more “viable.”


The country’s biggest food and beverage firm acquired the Limay plant from the government for $13.5 million in an auction in 2009.


SMC however had planned to convert the facility into a compressed natural gas-fed plant or scrap it altogether so the company can put up a coal-fired facility in its place.


The company had to run the Limay plant when brownouts hit Luzon last year because of the unavailability of a number of other power facilities, which either bogged down because of technical troubles or were shut down for scheduled maintenance. As a must-run unit, the Limay plant, which runs on diesel, charged a higher generation rate, thus resulting in a spike in electricity rates back then.


Considered the country’s biggest power plant operator, SMC had a 21-percent share of the market as of April this year with its 3,149-megawatt generating capacity.


This volume is four percentage points away from breaching the market share ceiling set by regulators. All of the company’s assets were acquired from the government auction block.