BY LENIE LECTURA – MAY 2, 2023
from Business Mirror
ACEN Corp., which is transitioning its generation portfolio to 100 percent renewable energy (RE) by 2025, declared that it will not provide funding for the planned gas-fired power plant of its oil and gas unit.
Nonetheless, the power firm said it wants the 1,100 megawatt (MW) combined cycle gas turbine project of ENEX Energy Corp. to succeed.
“This is a clarification that while ACEN has supported ENEX to help develop this joint venture company, ACEN has already committed to only invest in 100 percent RE. I just want to make it clear that it is not the intent of ACEN to invest in the construction equity of a gas-fired power plant because we already committed to become 100 percent RE generation by 2025.
What it means is that ENEX will have to source, together with its partner, for the capital once the project gets to financial close. We are not yet in financial close,” said ACEN President Eric Francia.
The project proponent is Batangas Clean Energy Inc., a joint venture between ENEX and Singapore-based Gen X Energy LLC, which is a subsidiary of United States-based Blackstone Group.
Based on Department of Energy (DOE) filings, Batangas Clean Energy is expected to reach a final investment decision this year and targets commercial operation of the gas plant by last quarter of 2026 to first quarter of 2027.
The gas plant will rise on 24 hectares of onshore land and 15 hectares of foreshore area in Barangays Libjo and Malitam, Batangas City. The project’s estimated cost is P60 billion.
“We have a joint venture which is a 1,100 MW gas-fired plant that’s under development in Batangas. That’s in very advanced stages of development and we believe it can participate in the upcoming CSP [Competitive Selection Process] of Meralco (Manila Electric Co.], for instance,” said Francia.
He said a power supply contract is vital to the project’s success given the volatility of fuel and gas prices in the world market.
“We would like the project to win a long-term contract. It is very risky to invest in a merchant, uncontracted gas power plant. It would need a contract with a reasonable pass-through mechanism and so forth.”
The way to balance ACEN’s goal vis-à-vis the success of the gas project of ENEX is for ACEN to make sure that ENEX secures the needed funding without ACEN having to shell out any amount.
“So, its still yet to be determined where the particular source of funding will come from but we have various sources for that, notwithstanding the fact that ACEN will not be the source of construction equity.
We would like nevertheless for the project to succeed, we will exert all efforts to make sure the project gets fully funded and that would be the role of ENEX to play and we have various options. For that, details of which I cannot go into at this point,” Francia said.
“So, we really are working hard making this project successful and real and we will ensure it will get the proper funding when the time comes.”
Batangas Clean Energy said the power plant will source natural gas from a nearby liquefied natural gas import facility. The plant would have the flexibility to burn up to 50 percent clean hydrogen as a supplemental fuel when hydrogen becomes commercially available and supply five to 10 percent of Luzon grid’s power requirements.
The plant has been certified as an energy project of national significance by the DOE.
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