First Gen to bid for 300MW mid-merit needs of Meralco

by Myrna Velasco – October 17, 2016

from Manila Bulletin

First Gen Corporation will be joining the competitive selection process (CSP) set out by Manila Electric Company (Meralco) for up to 300 megawatts of its mid-merit power supply needs.

In a power system, a mid-merit plant or capacity refers to an asset which can adjust its power output based on the fluctuation in demand at any given period of the day.

First Gen President and Chief Operating Officer Francis Giles B. Puno said they are keen to win the supply contract auction for capacity coming from their 414-megawatt San Gabriel gas-fired power plant in Batangas.

For mid-merit capacity, it is seen that gas-fed power plants would be ideal because their output could be cycled at any uptrend or sudden drop in system demand.

“They (Meralco) came out with a CSP – so we will have to go through CSP and that seeks out for 300MW…that is purely for mid-merit,” he said.

The First Gen executive added “we’ve always been in talks with Meralco, and actually, it would be nice to see a situation where they are contracting their longer term needs.”

Puno explained the San Gabriel facility “is a mid-merit plant so what we’re doing is complementing the requirement of the grid.”

And, to him, their biggest advantage is that they are offering a tangible capacity, not an output of a plant that has yet to be built.

Other than Meralco, the Lopez firm has also been exploring off-take agreements with other distribution utilities, and possibly industrial end-users.

He added “we’d like to be in a situation wherein for San Gabriel (plant), we’re contracting that to other distribution utilities also.”

While baseload needs of each grid are taken care of by coal-fired power plants, many players in the industry are actually seeing some sort of poverty in meeting the electricity system’s need for mid-merit capacity – and that leaves a room then for gas power plants to enter into bilateral supply deals.

Puno said “the supply situation is not really that sufficient, and actually it’s good for distribution sector to contract a portion of our capacity.”

The San Gabriel plant is still completing its commissioning phase – but executives added they are all set for full commercial operations once the facility’s certificate of compliance (COC) is issued by the Energy Regulatory Commission.

Parallel to San Gabriel plant’s coming on-line, First Gen is also offering the capacity of its 97-megawatt Avion power plant to off-takers with peaking capacity requirements.