SMC power unit to invest ‘heavily’ in RE

By Lenie Lectura - July 29, 2018

https://businessmirror.com.ph/smc-power-unit-to-invest-heavily-in-re/

THE power unit of conglomerate San Miguel Corp. (SMC) vows to “heavily” invest in the renewable-energy (RE) sector of up to 10,000 megawatts (MW) in a bid to further expand its presence in the energy industry.

“We are going to heavily invest in hydro, wind, tidal and battery storage. We predict to invest up to 10,000 MW in the next 10 years,” SMC President Ramon Ang said.

At end-2017, SMC Global Power Holdings Corp., the holding company for the power businesses of SMC, controls 3,213 MW of combined capacity. It had 15-percent market share of the power supply of the national grid, 21-percent market share of the Luzon grid and 5-percent market share of the Mindanao grid.

When asked how much is the conglomerate ready to spend for such capital-intensive projects, Ang said, “All RE projects are expensive to develop, except solar. All projects have potential, whether they are small or big.”

Ang said there is a lot of potential for wind-power projects, particularly in Luzon, which he identified as the best location to harness wind energy. “The profile of wind in Luzon is very good. We have a report already that a very good capacity can be installed and the land for that project is already owned by SMC.”

For hydropower projects, Ang said the power firm is looking at any available opportunities. “We are interested kahit saan pa iyan.”

Each hydropower project the company is eyeing has the potential to produce “at least 1,000 MW,” Ang said.

In August last year, SMC Global Power unit Strategic Power Development Corp. (SPDC) announced plans to build a 500-MW pumped storage hydro project in Tarlac province.

In May last year, the Department of Energy (DOE) approved three hydropower projects of SMC. These are the 100-MW Nabuangan run-of-river hydro in Apayao, the 500-MW Dingalan pumped storage hydroelectric plant in Aurora; and the 400-MW San Roque Lower East Pumped Storage in Pangasinan.

SPDC, the independent power producer administrator (Ippa) of the San Roque power plant, is set to take over the 345-MW hydroelectric multipurpose power project in 2024.

Ang also intends to install battery-energy storage possibly in all of its power facilities. “The idea is to put as many as possible.”

For tidal energy, SMC said in April last year it will submit to the DOE for its approval a tidal-power plant project with a capacity of 1,200 MW. At an estimated $3 million per megawatt, the proposed tidal-power project could cost about $3.6 billion.

He said in April last year that ocean-tidal power would be easy to operate as it doesn’t require fuel to run. “You build it once and it will run forever. According to our study, we can build about 18,000 MW of renewable energy out of ocean tidal waves in the Philippines.”

Ang had said a team is conducting researches on the clean-energy sector.

“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’m proud to say, we are making good headway,” Ang said.

SMC’s power plants mostly run on coal.

SMC Global’s other existing power projects include the Sual power plant in Sual, Pangasinan; the Ilijan power plant in Ilijan, Batangas; the Limay Greenfield clean coal plant in Limay, Bataan; Angat Hydroelectric Power Plant in Angat, Bulacan; and Greenfield Powerplants in Malita, Davao del Sur and Limay, Bataan.

SMC Global Power recently acquired the 630-MW Masinloc coal-fired power plant in Zambales. The conglomerate’s plan to go into RE was welcomed by the Department of Energy.

“It’s good. We welcome that for as long as they don’t ask for feed-in-tariff [FiT],” Energy Secretary Alfonso G. Cusi said.

Ang said earlier his company is not after the FiT subsidy. “We will put up a power facility even without any FiT.”

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

“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.