Korean firm lone bidder for Malaya plant

Danessa Rivera (The Philippine Star) - July 29, 2020 - 12:00am
https://www.philstar.com/business/2020/07/29/2031273/korean-firm-lone-bidder-malaya-plant

MANILA, Philippines — Korean firm Soosan ENS Co. Ltd. is the lone bidder to operate and maintain the 650-megawatt (MW) Malaya Thermal Power Plant in Rizal until its privatization the Power Sector Assets and Liabilities Management Corp. (PSALM) said.

PSALM held a virtual bid opening for the one-year operation and maintenance service contract (OMSC) of the Malaya TPP Monday.

Only Soosan ENS emerged as a lone bidder with a bid of P222.55 million for the one-year service contract. The bid is below the approved budget of P224.8 million for the procurement of the OMSC.

PSALM said the bid submitted is still subject to the detailed bid evaluation and post-qualification activities.

“Should Soosan ENS pass the said activities, the bid will be presented to the PSALM board of directors for the approval of the issuance of the notice of award,” it said.

The bidding for the one-year OMSC of the Malaya TPP was launched in January. Last year, Soosan ENS bagged the operation and maintenance (O&M) contract MTPP.

Part of the responsibilities under the service contract includes the day-to-day upkeep, management and maintenance or repair of the power plant and its equipment.

The OMSC will be bid out annually until the MTPP is privatized. PSALM is targeting to rebid the power asset within the year.

MTPP is currently designated as a must run unit (MRU) by the Department of Energy (DOE) to address supply deficiency when operating power plants in the grid suddenly bog down or become unavailable.

Located in Pililia, Rizal, the MTPP consists of a 300-MW unit with a once-through type boiler and a 350-MW unit fitted with a conventional boiler. However, only the second unit is working.

It was last rehabilitated in 1995 by Korea Electric Power Corp. under a 15-year rehabilitate-operate-manage-maintain agreement.

AC Energy units get P 2.2-B infusion

By: Ronnel W. Domingo - 04:06 AM July 29, 2020
https://business.inquirer.net/303784/ac-energy-units-get-p-2-2-b-infusion

AC Energy Philippines Inc. (ACEPH) is infusing as much as P2.2 billion into two of its subsidiaries, Bataan Solar Energy Inc. and Giga Ace 4 Inc., in line with efforts to push renewable energy initiatives.

Through this latest move, the Ayala group’s platform for the energy business is following through with an outlay of up to $100 million or about P5 billion for new technology investments, which was announced in March.

ACEPH said in a disclosure that its board of directors had given the green light for the investments in Bataan Solar and Giga Ace 4, and had tasked a team to finalize the needed subscription agreements.

“The company’s infusions into each of Bataan Solar and Giga Ace 4 will be used by the subsidiaries to further the opportunities presented by emerging clean energy technologies,” ACEPH said.Also, the investments into the two companies will be used for various development activities like securing land, permitting, undertaking project studies, project planning, and procuring and installing equipment available from the new technologies that the subsidiaries will use.

In March, the board of ACEPH approved the increase in its authorized capital stock by P24 billion aside from another change in name to AC Energy Corp.

This was by way of an infusion from AC Energy Inc., the new parent firm of the subsidiary formerly Phinma Energy Corp.Back then, AC Energy chair Fernando Zobel de Ayala said the infusion would firmly establish the ACEPH as Ayala’s energy platform both in the Philippines and around the region.

Zobel was referring to the combination of ACEPH’s domestic assets as well as AC Energy’s international portfolio.

The combined platform is intended to have an attributable capacity of around 1,500 megawatts (MW) in operations and

under construction, of which 60 percent is from renewable energy.

Their goal is to reach 5,000 MW of renewable power generation capacity by 2025. INQ

Power sector plans left out of SONA — energy advocates

posted July 28, 2020 at 11:20 pm by Manila Standard
https://www.manilastandard.net/news/national/329881/power-sector-plans-left-out-of-sona-energy-advocates.html

Power consumers and clean energy advocates on Monday expressed dismay at the absence of power sector plans in the country’s COVID-19 recovery pathway as pronounced in President Duterte’s fifth State of the Nation Address.

Prior to SONA 2020, the Power for People Coalition had been staunchly advocating for relief and reform programs as well as renewable energy development to aid the people’s recovery from the coronavirus crisis and transform the power sector for the better.

“We are disappointed that the President did not reaffirm his directive to the Department of Energy to reduce the country’s reliance on coal. There was no mention of a sanction on Secretary Al Cusi, whose ‘technology neutral’ approach was as an act of brazen disobedience to a direct presidential order,” said Gerry Arances, Convenor of P4P.

Arances said that the Meralco billing shock during the Enhanced Community Quarantine was also left out from the address, despite it being a major blow for consumers already struggling to make ends meet.

“Power consumers all over the country are also certainly dissatisfied that, while the President did warn private electricity providers to serve end-users better, no satisfactory resolution was provided. There was no mention of Meralco’s bill shock, immediate power relief for consumers as they struggle with the economic dislocation caused by the pandemic, and the renegotiation of power supply agreements detrimental to consumers,” he said.

While P4P commended the President’s recognition of solar energy as a viable method of powering Last Mile schools, the group reiterated that solar and other forms of renewable energy provide the same kind of electricity produced by coal which we can power factories, homes, and offices even in major cities.

“The difference is that renewable energy also empowers consumers because it can reduce their dependence on the monopolistic grid, helps protect the environment, and costs less. In recognizing the power of renewable energy to deliver power where coal-based power can’t, we cannot understand why the President cannot make the logical conclusion that renewable energy can do more than coal to benefit the country’s recovery from Covid-19,” Arances said.

The energy advocate said that with only two years left in his term, President Duterte should not be dallying with urgent power sector reforms and the transition to sustainable sources.

“There is no time for us to wait for him to realize on his own the contradictions inherent in choosing an expensive and polluting power source which he himself concedes cannot provide what the country needs while claiming that the responsible use of natural resources is one of his non-negotiables. The government cannot proclaim a new normal when it fails to make any real reforms to solve the problems of the old. The most that we would get is the old normal but with even graver consequences for the poor and the marginalized,” he said.

Meralco 2020 core profit to slip to P21 billion

Danessa Rivera (The Philippine Star) - July 28, 2020 - 12:00am
https://www.philstar.com/business/2020/07/28/2030997/meralco-2020-core-profit-slip-p21-billion

MANILA, Philippines — Manila Electric Co. (Meralco) expects core profits to slip to P21 billion this year as the power distributor started to register the full impact of the COVID-19 pandemic on power demand and the economy, its top official said yesterday.

Reported net income, meanwhile, was nearly halved from P12 billion last year to P6.8 billion this year as the company recognized an impairment of an equity investment of P2.7 billion.

In a virtual press briefing yesterday, Meralco chairman Manuel V. Pangilinan said this year’s core net income is projected to be around P21 billion, lower than last year’s P23.8 billion.

“We will be down by about 10 percent, no more than 12 percent for the year versus 2019. Compared to other corporates, we’re not as badly hit as other corporates,” he said.

The income guidance was based on Meralco’s outlook for the rest of the year, despite encouraging first half results.

“The three most consequential matters during this time are our people, keeping the lights on for our customers, and helping our government respond to COVID-19. Profitability had to take a back seat. Despite various challenges, including lower cash inflows, delayed capital expenditures, and the limitations resulting from the pandemic and lockdown, Meralco performed quite well,” Pangilinan said.

“While our first half results provide some encouragement, uncertainty remains as the effects of COVID-19 continue to impact the nation. We are moving with caution, but remain positive that as recovery is in the offing,” he said.

In the first half, Meralco reported a 14 percent slide in first half core net income from P12.3 billion last year to P10.6 billion this year.

Consolidated revenues were down seven percent from P165 billion to P138.6 billion as consolidated energy sales also declined by seven percent to 21,139 gigawatt-hours (GWh).

During the first six months, the power distributor recorded its highest sales in June at 3,953 GWh.

“The 3,953 GWh was our biggest month to date, coming from sales that were unbilled coming from previous months which were added on into June month sales,” Meralco first vice president and head of customer retail services and corporate communications Victor Genuino said.

He said the residential segment had 47 percent share at end-June compared to 33 percent in January. Commercial was at 28 percent versus 41 percent at the start of the year, while industrial was at 25 percent compared to 26 percent.

As of end-June, Meralco is close to its seven-million customer count as its total number of customers went up by three percent to 6.94 million customers.

Meralco president and CEO Ray Espinosa said COVID-19 has disrupted and adversely affected industries, employment, operating procedures and our way of life, but the power distributor is stepping up efforts to keep the lights on.

“The pain brought by this global pandemic is expected to be felt for quite some time. Meralco has stepped up and increased its message handlers and added digital and voice agents to address all customer concerns, while continuing to keep a robust and reliable network,” he said.

“We recognize the pain of our customers with the surge of consumption brought about by WFH arrangements and the scorching summer heat, and we have thus instituted ‘Customer First’ measures. We have relaxed customer credit, while being mindful of our obligations to suppliers and stakeholders,” Espinosa said.

For the remaining months of the year, Meralco has prepared its network to enable the micro-, small- and medium-sized enterprise (MSME) commercial and industrial customers to bounce back as stimulus is provided and as capital slowly flows back into the system, the company chief said.

“We are looking at their requirements and ensuring that we are ready to energize them when and as needed. We are in constant communication with our regulators on automation, digital transformation and a more responsive service. Policies and rules are also being updated to respond to the needs and requirements of the times,” Espinosa said.

Meanwhile, Pangilinan said Meralco recognizes its critical role in enabling industries as businesses restart and transition to the ‘new normal.’

“Even while everyone faces uncertainty of an unknown future, the entire Meralco organization is committed to, and will remain relentless in ensuring network reliability, customer care, and workplace integrity. We also reiterate our commitment to sustainability and to powering the good life as well,” he said.

Meralco to apply for P20-B capex next year

Published July 28, 2020, 10:00 PM by Myrna M. Velasco

https://mb.com.ph/2020/07/28/meralco-to-apply-for-p20-b-capex-next-year/

 

Power utility giant Manila Electric Company (Meralco) will apply for capital expenditures (capex) of P20 billion to bankroll projects for network expansion, reinforcement of its network reliability as well as targeted massive-scale rollout of smart meters.

Atty Jose Ronald V. Valles, first vice president and head of regulatory of Meralco, stated that the capex application will be filed with the Energy Regulatory Commission (ERC) next week.

“We’re targeting to file that next week, that’s for the RY (regulatory year) 2021 already,” he told reporters during a virtual press briefing.

Valles expounded that the capital outlay shall underpin the utility firm’s “load growth and the usual network reliability improvements…and we’re also looking for capex requirements for smart meters to address the situations which happened recently,” referring to the “estimated billing” resorted to during the lockdown period that subsequently resulted in overwhelming complaints from consumers.

The initial deployment of smart meters in the firm’s capital outlay next year will be for 100,000 meters – and it may cover both prepaid and post-paid subscribers.

In the longer term, the rollout shall be ramped up to 1.0 million meters in the next three years; and a wider base of 3.3 million smart meters in eight years.

Meralco is leaning on the deployment of advanced metering infrastructure or AMI, which is in the genre of “intelligent meters” that could then perceptively guide consumers on managing their usage based on what would really fit their budgets.

The smart meters could also spare consumers from billing confusion akin to what happened in the April-May billings of Meralco when its meter readers were not physically able to go on field for meter reading – that will be so because there is already direct information available in the smart meters that could then be fed forward into the information technology (IT) system of a power utility.

In the first six months of this year, Meralco reported that it already spent P6.9 billion of its consolidated capex for key projects, primarily those that are supporting the Build, Build, Build (BBB) infrastructure development program of the government.

Meralco First Vice President and Head of Networks Ronnie L. Aperocho said “we’re gaining momentum in our capex execution despite the numerous challenges and we have already utilized 51% or P4.76 billion out of our reduced capex of P9.34 billion budget for the year.”

The major capex spending of the utility firm had been for: new connections at P2.42 billion, which accounted for 84-percent of the firm’s P2.88 billion budget; then P1.12 billion for maintenance and asset renewals; and P780 million for load growth and residual utilization of non-network BBB and Meralco electrification projects.

He further noted “we expect higher utilization of BBB-related projects for second half of this year, and we’re working closely with different stakeholders, especially DPWH (Department of Public Works and Highways) and DOTr (Department of Transportation),” the key implementing agencies of the State’s infrastructure undertakings.
The power firm similarly spent roughly P80 million in fast-tracking the energization of the Covid-19 quarantine and treatment facilities within its franchise area.

Aboitiz Power income dives 57% to P3.7-B in first half

Published July 28, 2020, 3:45 PM by Myrna M. Velasco

https://mb.com.ph/2020/07/28/aboitiz-power-income-dives-57-to-p3-7-b-in-first-half/

 

Given the coronavirus contagion that pummeled businesses in recent months, listed firm Aboitiz Power Corporation reported that its net income in the first half tumbled 57-percent to P3.7 billion from a more auspicious bottom line of P8.6 billion in the same six-month stretch in 2019.

And in the second quarter when the pandemic exceptionally stymied economic activities in the country because of the government-enforced lockdown, the company’s income took further beating with 67-percent drop to P1.7 billion compared to P5.0 billion in a parallel period last year.

On its six-month income, Aboitiz Power emphasized that it logged non-recurring gains of P224 million, which was higher than the P121 million the previous year. It attributed such to “net foreign exchange gains on the revaluation of dollar-denominated liabilities.”

The firm emphasized that if these one-time gains had not been posted, the earnings of the company from January to June should have been lower at P3.5 billion, still seemingly inferior compared to last year’s P8.5 billion.

Primarily in the second quarter, the company noted decline in its earnings before interest, taxes, depreciation and amortization (EBITDA) “stemming from decreased demand due to the enforcement of COVID-related community quarantine and outages.”

Aboitiz Power similarly logged additional tax expenses following the lapse of the income tax holiday (ITH) perks of its Therma South Inc. and GNPower Mariveles Coal Plant Ltd. Co.; compounded by added interest expense from bond and loan that were availed of in last year’s fourth quarter.

For the power generation and retail supply segments of the company’s operations, Aboitiz Power indicated that it registered EBITDA of P14.8 billion, which was 17-percent lower versus last year’s P17.8 billion in the same six-month period.

“The variance was primarily due to reduced demand resulting from the enforcement of COVID-related community quarantines, as well as forced outages during the first half of 2020 involving Pagbilao units 1-3, TSI (Therma South Inc) Unit 2 and GMCP (GNPower Mariveles Plant) Unit 2.”

The reduction in earnings, it stressed, “offset the decrease in purchased power costs during the first half of 2020,” as well as the revenues cornered from its Therma Visayas Inc. (TVI) and Therma Mobile Inc. (TMO) plants.

In terms of energy sold during the covered financial review period, it declined 6.0-percent to 10,764 gigawatt-hours (GWh) from 11,460 GWh last year, and this was mainly attributed to “lower demand brought about by the pandemic and forced outages.” Conversely, overall capacity sold during the period

had been higher by 12-percent to 3,388 megawatts from 3,035MW a year ago.

The income contribution of the distribution segment of its business had been flattish at roughly the same level of P3.7 billion, despite the reported fall in sales.

“Energy sales decreased by 7.0-percent to 2,629 gigawatt-hours during the first six months of 2020 from 2,842 GWh in the first half of 2019,” the company stipulated, and that had been similarly traced to the drop in energy consumption of commercial and industrial end-users because of the stay-at-home orders of the government that in turn had affected work flow in businesses.

Ayala firm partners with Marubeni subsidiary for 150-MW diesel plant

Published July 27, 2020, 10:00 PM by Myrna M. Velasco

https://mb.com.ph/2020/07/27/ayala-firm-partners-with-marubeni-subsidiary-for-150-mw-diesel-plant/

 

ACE Endevor Inc., a subsidiary of AC Energy Philippines Inc. of the Ayala group, has inked a deal with a subsidiary firm of Marubeni Corporation of Japan for its greenfield 150-megawatt diesel-fired power facility in Pililla, Rizal.

The Japanese firm has used Axia Power Holdings Corporation in the joint venture pact it sealed with the Ayala company for that power generating facility.

“Under the agreement, Axia will acquire 50-percent of the shares and 50-percent of the economic rights in the company’s subsidiary Ingrid Power Holdings Inc.,” AC Energy has stipulated in its disclosure to the Philippine Stock Exchange.

Ingrid Power is the corporate vehicle for the Pililla diesel plant project that is targeted to be on commercial stream by first quarter of next year.

In AC Energy’s case, it will hold the balance of the 50-percent shares and 45-percent economic rights,

with Endevor having 5.0-percent of the economic rights in the Ingrid power project.

The JV deal concluded by the two firms will still be subject to the approval of the Philippine Competition Commission (PCC), according to the Ayala energy company.

As designed, the Pililla plant “will supply peaking and reserve power to the Luzon grid,” as the industry is already seeing tight supply conditions straining the country’s main power grid especially at the time when the coronavirus pandemic wanes.

As of January this year, AC Energy already infused P570 million into the Ingrid power facility; which is more than one-third of the project’s indicative cost of P1.5 billion.

Based on the project’s design, the facility will have fast start, high speed and quick response capability – and this will make it ideal for a peaking plant or the facility that could be dispatched by the grid operator when there is sudden surge in system demand.

The project developer’s plan is to also offer the generated electricity from the plant for contingency or spinning reserve; or for the regulating reserve requirement of system operator National Grid

Corporation of the Philippines.

Probable shortfall in power system reserves had been anticipated this year, but because of the lingering pandemic, that scenario in the country’s power supply-demand outlook had been avoided.