by Lenie Lectura, 25 February 2015
THE Manila Electric Co. (Meralco) is still on the lookout for more power projects in a bid to beef up its portfolio in the power sector.
At the moment, Meralco is involved in three coal power projects with a total power-generating capacity of 2,255 megawatts (MW). These are the 455-MW coal-fired power plant in Mauban, Quezon; the 600-MW coal-fired power plant in Subic; and the 1,200-MW coal power plant in Atimonan, Quezon.
Meralco Chairman Manuel Pangilinan said the plan is “to build up to 3,000 MW” of power-generation capacity for now. This means that there is still one more power project that will generate 745 MW.
“We are talking to a number of parties who are also interested in putting up power plants. If they require an off-taker…we must be able to invest so that we can participate in the benefits of the project,” Pangilinan said.
He declined to divulge the identities of the companies, but Pangilinan said these are all Filipino companies.
For its existing power projects, Meralco’s power-generating arm, Meralco PowerGen, has partnered with New Growth BV, a wholly owned subsidiary of Electricity Generating Public Co. Ltd. (EGCO) of Thailand to form San Buenaventura Power Ltd. Co. (SBPL) for the 455-MW coal-fired power plant project in Mauban, Quezon.
The 600-MW power project in Subic is being developed by a consortium composed of Meralco PowerGen, Aboitiz Power Corp. and Taiwan Cogeneration International Corp.
For the planned 1,200-MW coal-fired power plant in Atimonan, Pangilinan said this capital-extensive project will require a partnership with a foreign firm to spread any possible risk.
“We may look for a foreign partner so long as Meralco observes a majority stake,” said Pangilinan, who added that the project could cost at least $2 billion. Meralco was initially planning a liquefied natural gas (LNG) project in Atimonan but later decided on a coal-power facility.
“We’re still looking at possibilities on the gas side, but the reason for the shift of our focus on coal is because it is still the cheapest source of power,” Pangilanan said.
Power produced from an LNG plant is more expensive than from coal. Energy Secretary Carlos Jericho L. Petilla earlier said that while LNG is less costly than coal in other markets, it is still more expensive to bring into the country because of logistics costs. Besides, the government has yet to craft a master plan for LNG in the country.
LNG prices in the international market have also been on an upswing due to growing demand worldwide and a recent US policy aimed at cutting carbon emissions from coal plants. Meralco’s earlier plan involved a 1,750-MW LNG power plant in Atimonan with Chubu Electric Power Corp. as its partner. The shelved project was expected to be completed by 2018 to 2019.
Pangilinan also said Meralco and JG Summit Holdings Inc. are still discussing plans on possible joint power projects.
“We are in talks with them. They have a big petrochemical facility. They need to build a power plant. We are still under discussions,” the Meralco executive said.
JG Summit now owns 21.7 percent of Meralco, the country’s biggest power distributor after acquiring the stake of San Miguel Corp. for P72 billion. Meralco and JG are now exploring possible partnerships in the power sector. JG Summit is a pioneer in the petrochemical industry and now has two wholly owned subsidiaries in its 250-hectare fully integrated, world-class, Philippine Economic Zone Authority-accredited petrochemical manufacturing complex in Barangay Simlong, Batangas City. These are JG Summit Petrochemical Corp. and JG Summit Olefins Corp.