NEW VENTURE: Meralco to build microgrids outside franchise area

May 31, 2018 | 12:08 am

http://bworldonline.com/meralco-to-build-microgrids-outside-franchise-area/

MANILA ELECTRIC Co. (Meralco) plans to build microgrids outside its franchise area to serve communities that remain without access to electricity, its president said.

“I think we’d start doing this by next year, by 2019,” Oscar S. Reyes, Meralco president and chief executive officer, told reporters.

He said the company had started making preparations for setting up a microgrid, which is a small-scale electricity grid that can be operated independently from the country’s interconnected network of power transmission facilities.

Mr. Reyes identified microgrids as a prospective new business for Meralco, which has a 25-year franchise valid through June 28, 2028 to construct, operate and maintain an electric distribution system.

Meralco serves the cities and municipalities of Bulacan, Cavite, Metro Manila and Rizal, and certain cities, municipalities and barangays in the provinces of Batangas, Laguna, Pampanga and Quezon.

Asked about where the planned microgrid would be built, Mr. Reyes said: “Outside the franchise area.”

“We’ve identified some but we’d rather keep quiet because others might beat us to those communities,” he said.

The plan to build a microgrid — or a system with its own power resources, generation and load centers within a defined boundary — is separate from the company’s corporate social responsibility projects, the Meralco official said.

“We are sensitive to the government’s desire to see further energization of un-electrified areas. There are still areas, particularly outside our franchise area, where communities are not yet electrified,” Mr. Reyes said.

The communities that Meralco is looking at are off-grid communities where it could introduce a “hybrid” system such as solar energy with battery storage, or solar together with a small power generation set.

“There will have to be some degree of tariff flexibility,” Mr. Reyes said. “We’d like to play our role in bringing electricity to communities who have not had access [to it] for some time.”

He said Meralco is venturing into microgrids “not as a corporate social giving, which we are doing for un-electrified public schools, but as a business proposition.”

“Within Meralco franchise area, we are already close to 98% electrified,” he said, placing the exact number at 97.8%.

Mr. Reyes said the company is not planning to give up the remaining un-energized households to other power distribution utilities. “We will do what we can,” he said.

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. — Victor V. Saulon

DOE eyes non-OPEC, Russia for oil amid rising prices

May 30, 2018 at 5:07 pm
http://powerphilippines.com/2018/05/30/doe-eyes-non-opec-russia-oil-amid-rising-prices/

The Department of Energy (DOE) plans to put up a strategic petroleum reserve (SPR) which will be sourced from Russia and other non-OPEC countries in a bid to lessen the impact of rising oil prices in the international market.

DOE Secretary Alfonso Cusi directed the Philippine National Oil Company-Exploration Corp. (PNOC-EC) to prepare for oil trading and retail to provide competition to existing oil industry players and pacific oil prices.

“The government is aware of the country’s vulnerabilities to abrupt changes in the international oil situation and impending threats on the same, hence we are formulating various strategies to address those vulnerabilities to cushion the impact for our consumers,” the Energy chief said.

Cusi is ex-officio chairman of the PNOC-EC, the exploration arm of state-run PNOC.

The DOE currently requires oil companies to maintain a Minimum Inventory Requirement (MIR) of in-country stocks equivalent to 30 days of crude and products for refiners, 15 days worth of products for importers/bulk suppliers, and seven days of liquefied petroleum gas (LPG) stocks for LPG players.

The DOE is urging oil consumers to use petroleum products efficiently and wisely.

The creation of the SPR is founded on a number of joint international studies, according to the DOE-Oil Industry Management Bureau.

The Philippines and Thailand signed a memorandum of understanding in 2003 to jointly study, investigate, and assess the possibilities of cooperation. The memorandum also includes the identification of strategic locations for oil stockpiling and distribution points.

In 2004, another study was conducted by the US Department of Energy to assist the country in assessing the options and potentials for strategic oil stockpiles. They also recommended to enact legislation pertaining to the oil stockpiling program.

In the same year, Japan’s Ministry of Economy, Trade and Industry conducted a feasibility study on the development of a master plan and comprehensive scheme for oil stockpiling.

The oil price hikes was due to the movement in the international oil market and the continuous depreciation of the peso against dollar.

Oil companies raised gasoline by P0.65 per liter, diesel prices by P0.35 per liter, and kerosene prices by P0.45 per liter.

MGen wants renewable energy capacity at 20%

May 30, 2018 | 12:02 am

http://bworldonline.com/mgen-wants-renewable-energy-capacity-at-20/

MERALCO PowerGen Corp. (MGen) targets renewable energy to account for at least 20% of its attributable capacity in the coming years even as the company is looking at the coal-fired power plants being sold by the Ayalas’ energy unit.

“Siguro (Maybe) in the next three to four years at least 500-600 megawatts ang gusto naming i-develop (are what we want to develop),” said Rogelio L. Singson, MGen president and chief executive officer, told reporters.

“It (renewable energy) should be at least 20-30% of the MGen capacity,” he added.

Mr. Singson said solar has a “very strong potential in Luzon” amid a tighter window for coal-fired power plants.

The MGen CEO said he has looked at some of the stranded solar farms that failed to make it to the government’s feed-in-tariff (FiT) scheme.

“They’re telling us, you want our solar farm, we want to joint venture with you, what kind of PSA (power supply agreement) can we expect. Tiningnan namin lahat ng ino-offer sa amin (We’re looking at everything that’s offered to us),” he said, adding that the benchmark rate for solar capacity is at P2.98 per kilowatt-hour.

“We’re hoping that battery will come into play within the next five years. We’re seriously looking at the development of battery,” he said.

Mr. Singson also said that MGen was evaluating the coal-fired power plants being offered by AC Energy Holdings, Inc.

Earlier this month, Ayala-led AC Energy said it was looking for buyers for as much as half of its thermal energy platform to raise capital to support the company’s regional growth and balance its renewables and thermal portfolios.

“First of all, the assets being disposed are coal and if we look at the market outlook, the window for coal is very very tight,” Mr. Singson said, adding that the outlook for renewables is becoming “very very strong.” — Victor V. Saulon

Meralco sets additional P70-B capital investment

Updated May 29, 2018, 10:51 PM By Myrna M. Velasco

https://business.mb.com.ph/2018/05/29/meralco-sets-additional-p70-b-capital-investment/

As its parent firm, Manila Electric Company (Meralco) will be rolling out up to P70 billion worth of capital spending for projects that will chiefly reinforce its distribution network and other ventures it will be engaging in at the utility segment of the business, according to company president and chief executive officer Oscar S. Reyes.

He noted that the next batch of capital expenditures will be for its next regulatory reset in 2019 to 2023; with him emphasizing that average capital outlay on a two-year period is estimated at P35 billion.

“If you extrapolate, that will be P70 billion for four years,” Reyes said, although he emphasized that the capital needs of their distribution network will depend on eventual load growth being served by their system.

That level of spending is almost parallel to the P73 billion that the company had budgeted over regulatory years July 2015 to June, 2019.

The next round of investments will go along with the 50-year corporate life extension (starting May 7, 2019) that the company has approved on its annual stockholders meeting on Tuesday (May 29).

Meralco chairman Manuel V. Pangilinan said the extended corporate life has yet to be filed with the Securities and Exchange Commission (SEC) and subject to the approval of the company’s stockholders.

On the power generation front, Meralco and its power generation subsidiary are eyeing several brownfield and greenfield assets – including possible buy into the 50-percent thermal capacity of the Ayala group.

When asked on that particular prospect, Pangilinan indicated that the company’s interest is “ocean deep”, but he has not elaborated as to which numbers they have been looking at.

Meralco PowerGen President and CEO Rogelio L. Singson further asserted that he had already seen the numbers, but he cannot further comment “because we have non-disclosure agreement.”

Singson has been more forthright though on the company’s targeted investments on the solar space – to the tune of 500 to 600 megawatts of capacity into years 2021-2022. “In the next 3 to 4 years at least 500 to 600MW (of solar). It should be at least 20 to 30-percent of the portfolio of MGen,” he stressed.

Given the intermittent nature of solar, the MGen chief executive further noted that battery storage will be the ‘coupling technology’ that they shall be leaning on – primarily the prospective partnership deal they have been pursuing with Japanese multinational conglomerate Hitachi Ltd.

“We’re hoping that battery will come into play within the next five years. We’re seriously looking at development in battery,” Singson asserted.

At this stage though, he emphasized that the “cost proposition” for battery is still comparatively expensive and the capacities still at relatively smaller magnitude. “It is still in the development stage as far as battery is concerned. They’re still very small capacities, the biggest being in the order of just 2.0 megawatts,” he said.