January 10, 2018 By
Victor V. Saulon, Sub-Editor
MANILA ELECTRIC Co. (Meralco) is
looking to invest around $800 million in two wind farms, its president said, as
he disclosed details about the company’s plan to expand its portfolio to
include 300 megawatts (MW) of the renewable energy.
“You’re talking 300 MW. So [the
investment is] probably lower than $900 million. At $3 million per MW, make it
$800 million, plus or minus,” Oscar S. Reyes, Meralco president and chief
executive officer, told reporters on Tuesday.
He said on a 75%-25% debt-equity
ratio for project financing, Meralco would need to invest roughly $200 million
if it would shoulder the full equity portion.
“I think it will take maybe 24
months for the whole [investment to be spent],” Mr. Reyes said.
Asked why Meralco is diversifying
into wind energy, he said: “We have gotten indications that are attractively
priced to us because they are significantly lower than second round FiT
(feed-in-tariff) rates.”
Mr. Reyes was referring to the
guaranteed tariff of P7.40 per kilowatt-hour for 20 years that was awarded to
early investors in wind energy. He said the output of the wind farms would be
supplied to Meralco in a future power supply agreement (PSA).
He said the 300 MW wind farm is
broken down as two 150-MW projects that are under development.
“They are developing and they are
inviting us to… provide the PSA of their output and at the same time, see if we
are interested to invest,” Mr. Reyes said. “We are focusing first on the PSA.”
“Investment is still to be
discussed,” he said. “We’d like to be an enabler. If they don’t need the
investment, we remain open. It’s up to them whether they [will] welcome [us].”
Mr. Reyes said the wind energy
investment of Meralco would be housed under subsidiary Meralco PowerGen Corp.
(MGen).
Rogelio L. Singson, MGen president
and chief executive officer, earlier said that Meralco’s utility scale power
development subsidiary had been looking at wind energy proposals and might make
a decision on investing early this year.
Ahead of the proposed renewable
energy projects, MGen is developing several coal-fired power plants, including
the 100% company-owned ultra-supercritical coal-fired power plant under
subsidiary Atimonan One Energy, Inc.
The two-unit plant, each with a
capacity of 600 MW, is awaiting Energy Regulatory Commission (ERC) approval of
its power supply agreement (PSA).
MGen has a 47% stake in Redondo
Peninsula Energy, Inc. (RP Energy), which is awaiting the ERC approval of its
PSA with Meralco for 225 MW of the first of two 300-MW units, and 75 MW with
the retail electricity supply business of Aboitiz Power Corp.
Therma Power, Inc., a unit of
AboitizPower, owns 25% of RP Energy’s coal-fired power plant at the Subic
Freeport Zone, while Taiwan Cogeneration International Corp. holds another 25%.
MGen has a 51% stake in another
coal-fired power plant being developed in Quezon province with a capacity of
455 MW under San Buenaventura Power Ltd. Co. (SBPL).
SBPL, which is expected to start
commercial operation in mid-2019, is a partnership between MGen and New Growth
BV, a subsidiary of the Electricity Generating Public Co. Ltd. or EGCO Group of
Thailand.
Another project, St. Raphael Power
Generation Corp., is a 50-50 partnership between MGen and Consunji-led Semirara
Mining and Power Corp. It is also awaiting ERC approval of its 400-MW PSA with
Meralco. The planned coal power plant in Calaca, Batangas has two units, each
with a capacity of 350 MW.
Meralco’s controlling stakeholder,
Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings
Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest
Holdings, Inc., has interest in BusinessWorld through the Philippine
Star Group, which it controls.
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