SMC’s Ang admits continued pursuit of RE prospects

By Lenie Lectura - June 12, 2017

http://www.businessmirror.com.ph/smcs-ang-admits-continued-pursuit-of-re-prospects/

CONGLOMERATE San Miguel Corp. (SMC) continues to pursue renewable-energy (RE) prospects aimed at transforming its power business unit into a highly diversified energy company.

SMC President Ramon S. Ang confirmed in a text message his company is looking at a possible involvement in geothermal energy.  He said there are talks with Pan Pacific Power Corp. to pursue this interest.

“In talks,” was his reply when asked last week if there are ongoing discussions with Pan Pacific Power on a possible investment or partnership with the geothermal firm.

The talks are just preliminary and a possibility of buying into Pan Pacific is still under study, Ang said. He would not say how much is at stake.

Pan Pacific Power is among the power firms awarded with geothermal projects by the Department of Energy (DOE) as of December 2016. In the list is its geothermal project is known as Sal-lapadan-Boliney-Bucloc-Tubo Geothermal Power Project located in the province of Abra.

The project’s potential and installed capacity were not indicated. However, the geothermal-power project is “compliant with the approved WP, RESHERR and reportorial obligations; posting of PB is subject to the approval of one-year contract term extension.”

No other details were provided.

Last month Ang said the company would also pursue solar-power development albeit on a small-scale basis.   “Yes, pero hindi napakalaki. It could be 50 megawatts [MW] to 100 MW,” Ang said, adding the common challenge for a solar-power project is the land area.

“Ang problema ay per megawatt, you need 10 hectares. Problema ang lupa. Mas bagay ang solar gawin sa area na mainit,” he said.

Details for a solar-power project have yet to be firmed up, he said.

The company has formed a team that will conduct researches on, and develop solutions across, the clean-energy sector, as it affects the consumers and the environment.

“We are challenging ourselves to be able to operate in the most environmentally responsible manner while taking into consideration energy security and affordability to the consumers. Initiatives to achieve this objective are under way and I am proud to say we are making good headway,” Ang said.

He said the company is looking into developing ocean-tidal energy that could cost $3.6 billion for a planned 1,200-MW capacity.

Ang said last week the necessary regulatory requirements are being completed. “It’s being finalized so that we can apply the project with the DOE and Board of Investments. This is a very good project,” he said.

He added that the company has shortlisted two Asian firms as possible partners for SMC Global Power’s RE venture.

The location of the proposed ocean-tidal energy, which could be the first in the country, was kept undisclosed. Ang said construction for the project, once approved, could take five years. It can also be scaled up to 18,000 MW as per results of an ongoing study.

He said then that power rates for ocean-tidal energy may be sold for as low as P2.50 per kilowatt hour (kWh).

“Hindi ako hihingi ng FiT [feed-in-tariff] doon kasi kawawa ang taumbayan. Bebenta ko lang mura, siguro mga P2.50 per kWh para makababa presyo ng kuryente. FiT kasi is charging it to the pockets of everyone, nakakahiya yun. Kahit hindi mo ginagamit, nagbabayad ka,”Ang said.

The country’s FiT system guarantees compensation for RE producers through a long-term fixed price over a 20-year spread, a subsidy that is shouldered by power consumers.

The Philippines has one of the highest electricity rates in Asia, and with subsidies to renewables through FiT, the rates become even more expensive.

“It’s about time we find a balance between promoting clean energy and securing the country’s energy needs without making consumers bear the cost of a punishing subsidy for years in favor of RE producers,” Ang said.

SMC’s power plants mostly run on coal. SMC Global Power is currently the largest independent power producer in the country by installed capacity.

“We have a responsibility as a major power producer to do our share in pushing for a sustainable clean-energy economy but it has to be done in the most efficient way possible for the consumers. With critical mass and better technology, I believe we should be able to strike the perfect balance between renewable and nonrenewable sources in terms of the country’s energy mix,” Ang said.