Meralco eyes solar, wind projects

By Ronnel W. Domingo October 31, 2018 at 5:22 am

https://m.inquirer.net/business/259795

Power distribution giant Manila Electric Co. wants to go into renewable energy through its electricity generation subsidiary, looking at building a portfolio of up to 1,000 megawatts of solar and wind resources over the medium term.

Rogelio L. Singson, president of Meralco PowerGen Corp. (MGen), said in a briefing that the company was focused on the development of a portfolio of utility-scale solar generation projects to supply the Luzon grid—particularly Meralco’s franchise areas—“with low-cost electricity.”

Wiki-Solar, a part of renewable energy consultancy WolfeWare Ltd., defines “utility-scale” as solar power plants with a capacity of at least 4 MW.

Singson said MGen also believed there was ongoing potential for competitive new wind-based power generation in Luzon.

“The target we’re looking at is hopefully at least 500 MW to 1,000 MW of solar in the next two to three years,” he said.

“We are in discussions for a wind project with 150 MW of capacity,” he said, adding that this was a potential partnership on an existing wind project.

The former public works secretary said MGen was considering to undertake solar and wind projects that were either greenfield—to be built from scratch—or ones that were already being developed.

“We will start going through a screening process (to choose the projects),” Singson said. “It looks like most of the constraints are either limitations on transmission or limitations in terms of land availability and conversion, specially if they (lands) are covered by restrictions related to ancestral domains or agrarian reform.”

“We hope to sign off by the first quarter of next year our first project,” Singson said.

MGen is taking such a path amid opposition from various groups to some of the company’s pending projects, especially coal-fired power plants.

In particular, MGen has been awaiting regulators’ action on proposed power supply agreements (PSA) related to several projects.

Of such projects, the most advanced along the development process is the 1,200-MW green project being pursued by Atimonan One Energy Inc.

Singson has reiterated that all permits and clearances for the Atimonan project have been secured and the plant was ready for construction, and all that was lacking was a regulator-approved PSA.

Meralco may turn Atimonan coal plant into merchant facility

By Lenie Lectura - October 31, 2018

https://businessmirror.com.ph/meralco-may-turn-atimonan-coal-plant-into-merchant-facility/

THE Manila Electric Co. (Meralco) has considered the option of converting the shovel-ready $3-billion Atimonan One Energy (A1E) coal-fired power plant into a merchant facility or power plants that do not have long-term power purchase agreements to cover their output.

The utility firm is optimistic the regulators would soon approve the power supply agreement (PSA) application it entered into with A1E. The PSA approval is necessary before the project proponent can financially close the project and commence construction. This is because lenders require projects to present an approved PSA before extending loans to energy developers.

However, the utility firm’s chairman is not discounting the possibility that the power project may be converted into a merchant plant.

“Yeah, why not? It’s only money,” replied Meralco Chairman Manuel V. Pangilinan when asked if the Atimonan power plant can be converted into a merchant plant.

“We have given the greenlight to management to proceed with Atimonan. At first, we gave the limited notice to proceed, but eventually when they start shoveling, we will give them a notice to proceed. We don’t want Atimonan to fall by the wayside like Redondo,” Pangilinan said.

More than two years since the PSA between A1E and Meralco for A1E’s 2×600 megawatt (MW) plant was filed, A1E continues to await approval from the ERC. On August 30 A1E filed with the ERC its fourth “very urgent motion” to resolve its PSA, highlighting significant negative impacts to the overall project in terms of total project cost, timetable and eventual power prices, as well as the country’s power situation.

All the necessary agreements, particularly the EPC (engineering, procurement and construction) and loan agreements, are in place.

Financing has been arranged by the mandated lead arrangers and bookrunners with a mandate letter signed with a consortium of eight local banks. Transmission right-of-way acquisition is currently close to full completion.

Meralco PowerGen Corp. (MGen), the power generation arm of Meralco, said the option to convert it into a merchant plant is being considered as a last option.

“There are other options such as to go into competitive selection process first. We can go merchant also, but that’s the last resort,” MGen President Rogelio Singson said.  “We will assess whether to go merchant or not.”

As delays hound the power project, Singson cited ballooning costs. Of the P150-billion project cost, Singson said P107 billion will be funded via bank loan.

“There’s a P3-billion interest per year. Since the time we negotiated until today, there is a 3-percent increase every year,” Singson said.

Meralco President Oscar Reyes also cited adjustments in the exchange rate, another major factor in determining the project cost.

“Project cost has significantly increased because of the exchange rate. At the time we filed, the rate was between 46 and 48. Now, it’s 53 to 54 to a dollar. Interest rate at the time we filed was low at below 4.4 percent. Now, it’s up by at least 3 percent. It’s P3 billion a year on the P107-billion loan and construction period of about 42 months. We still remain focused though,” Reyes said.

A1E is a 2×600 MW greenfield, ultra-supercritical pulverized coal-fired plant in Atimonan, Quezon, the first ultra-supercritical plant in the country. Completion of the first 600 MW is targeted by the third quarter of 2023, and the second unit by the first quarter of 2024.

DoE short-lists 3 groups for LNG terminal project

October 31, 2018 | 12:01 am

https://www.bworldonline.com/doe-short-lists-3-groups-for-lng-terminal-project/

SINGAPORE — The Philippines have short-listed three different groups of companies to build and operate its first liquefied natural gas (LNG) import terminal, a senior energy official said on Tuesday.

The companies were chosen out of 18 groups which submitted proposals for the project, Secretary of Energy Alfonso Cusi told Reuters on the sidelines of the Singapore International Energy Week.

The Philippines National Oil Company (PNOC) is one of the bidders and it is seeking a partner for the project, he said, while Tokyo Gas has partnered the Philippines’ First Gen Corp.

China National Offshore Oil Corp. (CNOOC) is also in the running although it has yet to firm up a local partner, Cusi said. CNOOC was previously in talks with the Philippines’ Phoenix Petroleum as a partner, he added.

“Hopefully we can have a conclusion on which proposal to accept by the end of November,” Cusi said. — Reuters