Sem-Calaca RES Corp. in talks for 150 MW supply

Iris Gonzales (The Philippine Star) - November 27, 2018 - 12:00am
https://www.philstar.com/business/2018/11/27/1871926/sem-calaca-res-corp-talks-150-mw-supply

MANILA, Philippines — Sem-Calaca RES Corp. (SCRC), the retail electricity arm of integrated energy company Semirara Mining and Power Corp. (SMPC), is in talks with a number of large electricity users as potential clients.

SMPC president and chief operating officer Victor Consunji said the company is looking at supplying several customers with an aggregate volume of 150 megawatts.

“We are in talks with a number of contestable clients for an aggregate volume of 150 MW. The negotiations are in various stages of negotiation,” Consunji said.

The Consunji-led company has already sealed a four-megawatt retail supply contract with a Luzon- based steel manufacturing firm.

The supply deal commenced last September and will last for 15 months.

Consunji said the RES market could be a bright spot for the company given the challenging environment in the power sector brought about by growing competition in the market.

“We expect a challenging 2019 for the local power industry because of increasing power supply in the market and the growing competition for power contracts. With the increasing contestable customers switching to retail suppliers, the RES market could be a bright spot for SMPC,” Consunji said.

A retail electricity supplier (RES) refers to any person or entity authorized to sell, broker, market or aggregate electricity to the “contestable” market.

Effective January 2018, the threshold for the 12- month average peak demand to qualify to become a contestable customer was lowered from one megawatt to 750 kilowatts.

“We believe SCRC is capable of competing with the other RES players. We can provide customers with customized solutions to help manage their electricity costs,” Consunji said.

SCRC offers contestable power consumers with affordable electricity prices by securing sufficient supply from affiliate power plants SCPC and Southwest Luzon Power Generation Corp., other independent power generators, or from the Wholesale Electricity Spot Market.

At present, SMPC is the only power producer in the country that owns and mines its own fuel source.

This allows the company to generate affordable baseload power for the Luzon and Visayas grids.

Many power players have entered the RES market ahead of the Consunji Group, but company officials said the industry still has a lot of room to grow.

There are at least 1,377 contestable customers in Luzon, while there are 184 contestable customers in Visayas with a total demand of around 3,830 MW, according to the Competitive Retail Electricity Market (CREM).

Many of these contestable customers are still getting their power requirements from their distribution utilities.

Introduced in June 2013, RES are entities authorized by the Energy Regulatory Commission, the power regulator, to sell, broker or market electricity to big power users.

Prior to June 2013, all these big customers were captive customers of Manila Electric Co., the country’s biggest power distributor.