by Lenie Lectura, 28 April 2015
THE power-generation arm of the Manila Electric Co. (Meralco), Meralco PowerGen Corp. (MGen), is committed to develop an additional 300 megawatts (MW) of power-generation capacity to help achieve adequate reserves in the Luzon grid.
Meralco Chairman Manuel V. Pangilinan said the power firm’s objective of putting up 3,000 MW of capacity is “probably quite achievable” given that the utility firm is already working on four power projects with over 2,000 MW of total capacity.
These are the 455-MW coal-fired power plant in Mauban, Quezon; 600-MW coal-fired power plant in Subic; and the 1,200-MW coal-fired power plant in Atimonan, Quezon. Pangilinan did not say when MGen could put up another 300 MW, stating, “our plate is full” at the moment.
“If we look at all of it, it’s fairly a sizable investment,” he said, referring to MGen’s ongoing power projects.
Favorable developments have moved MGen’s projects closer to financial close and substantive engineering procurement and construction (EPC) activities.
For instance, the Supreme Court in February issued its decision upholding the validity of the environmental compliance certificate to Redondo Peninsula Energy Inc. (RP Energy) and the lease and development agreement between Subic Bay Metropolitan Authority and RP Energy.
Discussions have resumed and are in the advanced stages with RP Energy’s EPC contractor for an updated contract price, and with a consortium of local banks for financing of the project.
RP Energy is undertaking the long-delayed 600-MW power project in Subic. It is a consortium composed of MGen, Aboitiz Power Corp. and Taiwan Cogeneration International Corp.
The target commencement of construction is in the latter part of the year.
Meanwhile, the power sales agreement (PSA) jointly filed by San Buenaventura Power Ltd. Co. (SBPL) and Meralco in 2014 covering the 455-MW coal-fired power plant in Mauban is still awaiting approval from the Energy Regulatory Commission (ERC).
SBPL is a joint venture of MGen with New Growth BV, a wholly owned subsidiary of Electricity Generating Public Co. Ltd. of Thailand.
The financial close with a consortium of banks for the project’s financing, and the finalization and issuance of a notice to proceed to the selected EPC contractor, will proceed upon release of the decision on the PSA by the ERC.
The fund-raising exercise could reach P40 billion.
The ERC decision is expected to be made in the next few days, while financial close is being eyed sometime mid-2015. The target commissioning of the power plant is in the second half of 2018 to first half of 2019.
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.
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.
Aside from the three power projects, Meralco is also in talks with Osaka Gas for an LNG project consisting of an integrated LNG facility, with a terminal and power plant with a capacity of up to 1,500 MW.
A feasibility study is expected to be finished this year. The project could cost over $2 billion, which will be divided on a 60:40 basis.
MGen also has interest in Global Business Power Corp., one of the largest independent power producers in the country and a member of the GT Capital group of taipan George Ty.
MGen is seeking to develop other base-load and mid-merit power-plant projects with the aim of significantly contributing to a more robust power-supply situation.