Wind energy firm offering P3.50 per kWh to Meralco

By Alena Mae S. Flores – February 28, 2018 at 07:20 pm
from Manila Bulletin

Power retailer Manila Electric Co. said Wednesday it received an offer of P3.50 per kilowatt-hour from a wind energy developer to supply 150 megawatts from a proposed wind project in Rizal province.

Meralco received the offer from Island Wind Energy Corp., which plans to put up a 150-MW wind project in Talim Island in Binangonan and Cardona, Rizal and an alternative site in Sembrano, Laguna.

“The total capacity is 150 MW, comprised of an initial 80 MW and then 70 MW. The offer that will be subjected to price challenge is an indicative price of P3.50 per kWh. This would be much lower than the wind FIT [feed-in tariff] rates of P8.53 per kWh and P7.40 per kWh,” Meralco head of utility economics Lawrence Fernandez said.

Meralco already issued the invitation for price challenge to other wind developers.

The proposed wind energy project is expected to start commercial operations on June 30, 2020 for the first plant and the second plant a year later.

The contract covers 20 years at P3.50 per kWh subject to an annual escalation of 2 percent, applied to the offer price.

“An offer made by the price challenger should be under the same terms and conditions of the power supply agreement provided by Meralco, except for the financial proposal,” the power distributor said.

Meralco set the deadline for expression of interest on March 5. Price challengers that previously submitted an expression of interest were asked to submit qualification documents not later than March 21. Qualified price challengers are also required to submit financial proposals not later than April 10.

“Meralco is in need of wind energy power plants in order to complement its solar power renewable energy portfolio which is affected by increased intermittency during the rainy season,” the company said.

It said the wind supply would also diversify Meralco’s renewable energy supply portfolio pursuant to the Renewable Energy Act of 2008 and “further complement the baseload system requirement of Meralco’s RE supply portfolio since wind energy power plants are capable of providing power for 24 hours a day without need for additional costs of batteries, while the wind power plant’s mechanical mass stores energy that contributes to the grid’s transient stability.”

Meralco so far signed up 185 MW of solar capacity from two suppliers including Solar Philippines and PowerSource First Bulacan Solar Inc.

Meralco also received a new offer, subject to price challenge from other developers from Pilipinas Newton Energy Corp. to supply 50 MW of capacity for P2.9887 per kWh.

Pilipinas Newton’s offer is so far the lowest offer received by Meralco for solar supply. Its previous lowest offer was at P2.9999 per kWh from Solar Philippines for 85 megawatts of solar capacity.

Meralco accepted the offer of PowerSource for P5.39 per kWh last year to supply 50 MW of capacity from its solar facility in San Miguel, Bulacan.

Merlaco also signed a supply agreement with Solar Philippines Tanauan Corp.  for 50 MW from its two projects located in Batangas and Cavite for P5.39 per kWh.