9 firms now interested to bid for Malaya plant

By Myrna M. Velasco – October 23, 2018, 10:00 PM
from Manila Bulletin

Interests in the divestment of the 650-megawatt Malaya thermal power plant has been significantly stimulated; with nine prospective bidders already in the list of asset-seller, the Power Sector Assets and Liabilities Management Corporation (PSALM).

PSALM-logo

These are SMC Global Power Holdings of the San Miguel Group; AC Energy Inc., DMCI Power Corporation, Panasia Energy Inc., Quezon Power (Philippines) Ltd. Co.; Crown Investment Holdings Inc.; Energy World Power Operations Philippines Inc., FGen Reliable Energy Holdings Inc. and Pan Pacific Renewable Power Philippines Corp.

It was gathered that the interested investing groups are either looking at the possibility of converting the facility into a gas plant; or have its electricity generation aligned for the ancillary services needs of the Luzon grid.

With targets of higher penetration of renewable energy that shall be ushered in by the government-designed Renewable Portfolio Standards (RPS), the electricity system’s need for ‘back-up power capacity’ would also be on uptrend.

Electricity generation to underpin the intermittency of renewables forms part of the ancillary services that the power system would prudently require to ensure reliable operation and seamless service to consumers.

The Malaya plant, it was noted, could be ideal for that – especially if the buyer would pursue some reconfiguration of the facility so its ramp up rate can be hastened.

In this current track of privatization, PSALM has indicated that it will no longer impose conditions relative to the asset’s sale.

Last year, when the facility was first lodged on the auction block, there had been requirements to have the plant converted into a gas-fired asset; and to have it lined up as must-run unit (MRU) over three-year duration.

Those enforcements initially dampened the appetite of prospective bidders, hence, the asset-seller company had to backpedal on the asset’s divestment then.

At this time though, PSALM firmly indicated that it is now ready to let go of the asset given the current improvements also in the power supply-demand outlook that the country’s various power grids are now experiencing.

Over the years, capacity additions have been reaching commercial stream – including in the biggest power grid of Luzon, giving the system more comfort then that consumers will not be compromised of brownout conditions in case the State would unload on its remaining power assets.

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