SMC, Aboitiz Power join PSA auction of Meralco

Published January 28, 2021, 7:00 AM

by Myrna M. Velasco

SMC Global Power Holdings Corporation, the energy investment arm of San Miguel Corporation and Aboitiz Power Corporation, were among the big-ticket players in the power industry that submitted offers in the competitive selection process (CSP) carried out by Manila Electric Company (Meralco) for its power supply agreements (PSAs) that will satiate its future electricity supply requirements.

According to the third party bids and awards committee (TPBAC) of Meralco’s CSP process, “nine (9) submissions were received by the deadline (which was 9:00am on January 27),” and the equivalent-megawatts of the offers reached 5,850 megawatts.

The PSAs on tender will be for aggregate 1,800MW and will be for 20-year duration. The facilities will supply the electricity needs of Meralco starting year 2024, based on the CSP terms previously submitted to the Department of Energy.

The TPBAC indicated that the tenders will need to go through post-qualification process; and the acceptable and winning offers will be announced as targeted on February 10 this year.

Sources from SMC and Aboitiz firms confirmed their participation in the auction process, but they have not given further details on the scale of capacity in their tenders; and more so, on their respective price offers.

Aside from San Miguel and Aboitiz, another player that had consistently eyed to join the auction is Meralco PowerGen, the power generation subsidiary of Meralco which is pursuing its 1,200-megawatt Atimonan coal-fired power project in Quezon province.

For Aboitiz Power, it was noted that its offer is from its 1,336MW GNPower Dinginin coal-fired power facility (its joint venture with the Ayala group) – and it’s a new generating asset of which first unit had just reached commercial operation; and the second unit is scheduled on-line soon.

San Miguel, for its part, has various fleets of power generating facilities; and it is also advancing several greenfield power projects in Quezon and Bataan provinces.

It was further gathered that First Gen Corporation of the Lopez group opted not to join the PSA bidding; while there are hints that the joint venture of Ayala’s AC Energy with businessman Leandro Leviste’s Solar Philippines intended to participate in the auction.

In the bidding terms green-lighted by the DOE, it prodded Meralco to go for a ‘stacking option’ on the capacity offers; and it also set flexibility on the technology use of the interested bidders.

Despite the impact of the pandemic on short-term electricity demand, it is projected that additional supply – primarily for Luzon grid – will be needed in the next 4-5 years to underpin the needs of a recovering economy.