3 energy giants vie for Meralco’s 1,200MW greenfield capacity

By Myrna M. Velasco – August 18, 2019, 10:00 PM
from Manila Bulletin

Three of the country’s major energy firms are advancing interests to join the competitive selection process (CSP) for the 1,200-megawatt (MW) greenfield baseload capacity that power utility behemoth Manila Electric Company (Meralco) will be scheduling at the auction block next month.

The Filipino energy giants that attended the pre-bid conference recently had been First Gen Corporation, San Miguel Energy Corporation and Meralco PowerGen, which is the power generation affiliate of the utility firm.
According to sources, the major questions raised during the pre-bid conference had been on the “high efficiency, low emissions” (HELE) technology configuration that Meralco had set out in its CSP terms of reference (TOR).

In a separate interview, Energy Secretary Alfonso G. Cusi indicated that the HELE technology specification in the TOR of the scheduled CSP of Meralco was approved by the Department of Energy (DOE).

“The technology is welcome to us and that’s good – that’s why we approved it,” he said. That is in reference to the technology preference of Meralco for the new power capacity that will be adding up to its supply portfolio by year 2024.

The energy chief said what is important to the energy department is for the prospective project-sponsors to meet the targeted completion of capacity additions because the country’s power system will be needing these new power facilities.

“We cannot delay anything or everything because we have timelines to meet. We have to ensure that we have sufficient supply in the coming years,” Cusi stressed. The 1,200MW capacity addition being solicited by Meralco could entail gigantic investments of up to $3.0 billion.

The preference for HELE in the solicited greenfield capacity generally leans on the deployment of ultra super critical (USC) boiler technology which makes electricity generation more efficient and could also pare the project’s carbon emissions – because it entails that the plant will be using less coal for every megawatt of electricity generation.

For the greenfield capacity, the bid submission date is slated September 11 this year – and it will be the last one in three PSA auctions that Meralco has slated for next month.

The utility firm has also set a tendering process for 1,200-megawatt brownfield capacity on September 9 – that’s being offered at a block of 200MW capacity each to the interested bidders.

The other power supply agreements (PSA) set for CSP or bidding on September 10 will be its requirement for mid-merit capacity of 500MW – which is being offered at 100MW capacity chunk each to interested suppliers.

The DOE will be supervising the Meralco auction processes and it will sit as observer in these scheduled CSPs in compliance with the recent ruling of the Supreme Court upholding the DOE Circular being the guiding rule in the conduct of CSPs of the distribution utilities (DUs) and electric cooperatives.

Before any DU or EC could undertake a CSP, it will need to submit first its terms of reference as well as its Power Supply Procurement Plan (PSPP) with the DOE and will also correspondingly secure the department’s approvals on such requirements.