Meralco plans to invest in wind, natural gas, hydro projects

by Alena Mae S. Flores – April 26, 2016 at 11:15 pm

from Manila Standard Today

Meralco PowerGen Corp., the power generation arm of Manila Electric Co., plans to invest in natural gas, wind and hydro-electric power projects to boost its power generation capacity to 3,000 megawatts, an executive said Tuesday.

Meralco PowerGen is currently looking at a portfolio of 755 MW of coal projects in joint venture with other companies.

“For attributed capacity, we have so far only 455 MW of SBPL [San Buenaventura Power Ltd.] and 300 of Redondo [RP Energy], so that’s 755 MW. Even if we include Atimonan, that’s only 1,900 MW and out attributable capacity  is only 50 percent of  that,” Meralco president Oscar Reyes told reporters.

Meralco PowerGen needs to build another 2,000 MW of power projects to meet its goal of 3,000 MW. Reyes said the additional capacity would require an investment of $2 million to $2.5 million per MW.

Reyes said the company was in talks with possible partners for the development of a 100-MW wind power project, 100-MW pump storage hydro project, a run-of-river hydro project and a 1,000-MW natural gas power project.

He said Meralco PowerGen was also studying the power generation mix of the country and the role of additional coal-fired power plants.  He confirmed ongoing talks with other developers for prospective coal projects.

Reyes said while there were indications of an oversupply scenario by 2021 and 2022, the company was looking at the growth in demand that would fuel the need for additional capacity.

“That’s what happened in 1989. Nobody expected that the Philippine economy will shoot up, so there was pent-up demand that was not seen and became visible especially during the Ramos administration.  That’s why there were brownouts,” he said.

“It’s better to have overcapacity…We’re always looking at strategic partnerships,” Reyes said.

Construction of the San Buenaventura supercritical coal plant in Mauban, Quezon started in December when the notice to proceed was issued.

RP Energy, meanwhile, is developing a 600-MW circulating fluidized bed coal-fired power plant in Subic Bay, Zambales, with an initial component of 300 MW.

Construction of the second 300-MW unit would depend on the resolution of transmission line constraint issues, the company said.

RP Energy signed a power supple agreement with Meralco for a substantial portion of its first 300-MW capacity.

The balance of the capacity and energy was contracted by Aboitiz Energy Solutions, Inc., a retail electricity supplier entity of the Aboitiz Group.

“Our 3,000-MW aspiration for our power generation portfolio will be built through a mix of brownfield and greenfield developments as well as acquisitions. We remain committed to be part of the solution to the current power situation to sustain economic growth,” Reyes said.

Meralco PowerGen is also pursuing the 1,200-MW Atimonan One coal project in Quezon.  Bidding for the engineering, procurement and construction contract is ongoing.

“I think you have to have a portfolio mix so natural gas is a part of the long term portfolio,” Reyes said.