San Miguel to scrap pending coal power plants after gov't ban

Ian Nicolas Cigaral (Philstar.com) - October 28, 2020 - 12:10pm
https://www.philstar.com/business/2020/10/28/2052905/san-miguel-scrap-pending-coal-power-plants-after-govt-ban

MANILA, Philippines (UPDATE 1:20 p.m., Oct. 28) — San Miguel Corp. is abandoning future plans to construct coal power plants after the government enforced a moratorium on coal-powered generators.

Asked if the country’s largest conglomerate would still proceed with its coal power plans, Ramon Ang, president and chief operating officer, told Philstar.com in a text message: “No problem. We always follow rules.” He did not elaborate.

The energy department will not be accepting applications for the construction of new coal power plants, a policy shift that also came with allowing 100% foreign ownership on geothermal energy plants worth at least $50 million.

The moratorium greatly affects San Miguel’s power ambitions. As of July, energy department data showed the company’s subsidiaries are eyeing to build coal-fired power plants with cumulative capacity of 3,628 megawatts. That accounted for 37% of the 9,803 MW coal projects being explored, but yet to be submitted to government for approval.

Broken down, data showed SMC Global Power Holdings Corp. was planning coal projects with 2,400 MW capacity in Luzon, 600 MW in the Visayas and 628 MW in Mindanao.
Energy stocks rise

Separately, Aboitiz Power Corp. said the government order will not affect the company’s long-term plans. “AboitizPower’s growth strategy for the next 10 years remains the same, which is to significantly grow our renewables portfolio, Cleanergy,” the company said in a statement.

“We remain committed to achieving our goal of a more balanced energy mix or an almost 50:50 Cleanergy and thermal capacities by 2030,” it added.

Energy stocks were among the most actively traded shares on Wednesday as investors digested the government’s policy changes. As of 11:34 a.m., shares in First Gen Corp. were trading up 10.42%, while AC Energy Philippines Inc. of Ayala Corp. gained 0.52%.

“It's a bold and progressive policy...AC Energy is fully supportive of (Energy) Sec. (Alfonso) Cusi's direction and we will continue to scale up our renewable energy investments in the country,” John Eric Francia, AC Energy president and chief executive, said in a statement. The company previously announced plans to fully offload coal investments by 2030.

Lopez-led First Gen did not respond to request for comment.