San Miguel plans RE investments

By Myrna M. Velasco – February 3, 2017, 10:01 PM

from Manila Bulletin

To offload the punishing feed-in-tariff (FIT) subsidies being shoved into consumers’ electric bills, the energy arm of diversifying conglomerate San Miguel Corporation (SMC) indicated interest to join the “investment fray” on the renewable energy (RE) capital outlay terrain that shall be based solely on competitive bidding.

Essentially, according to SMC President Ramon S. Ang, he will be responding to the challenge of Energy Secretary Alfonso G. Cusi that the next rounds of RE ventures shall be done through competitive selection process (CSP) or any other form of bidding without the underpinnings of fixed and long-term subsidies.

“We will go into RE as long as there is bidding or CSP, and we will compete with anyone in the industry even without the subsidies,” he stressed.

Ang laments the reported trickery done by some investors in the renewable energy (RE) sector just so they can corner a pie in the FIT system, a subsidy scheme borne by consumers via the FIT Allowance (FIT-All) line item in the electric bills. “I don’t have fears or apprehensions investing in RE as long as it is not subsidy-driven so it will not end up punishing for consumers,” he said.

Ang added that with the sudden drop in the cost of solar technologies as well as that of wind, these so-called emerging RE options can already thrive in the marketplace.

“If we will do solar and wind, we will do it via CSP and let market forces work,” he noted, adding that this is now being studied by the power group of the conglomerate.

With bidding, he explained that all players would be given the chance to invest in the sector – and the tough contest will just be on price as well as the viability and reliability of the technology and equipment used in the power plant projects.

“It’s not just because you look more handsome or prettier … that should not be the gauge of the industry’s game – everything should be bidded out or done through competitive selection process,” Ang emphasized.

He expounded “if you really want to be fair, do it through bidding, so players would no longer be fighting over FIT or subsidies…we should just beat each other on price.”

San Miguel generally invested in the power sector utilizing conventional fossil fuel technologies, and it is only this time that it has been exploring opportunities in the RE space.