Listed firm Solar Philippines Nueva Ecija Corporation (SPNEC) has inked a 10-year power supply agreement (PSA) with Angeles Electric Corporation (AEC), a privately owned power distribution company that is touted to be the third biggest in Luzon grid.
According to SPNEC, it will supply 97.8 megawatt hours daily from 6 a.m. to 9 p.m. for a contract period of 10 years to Angeles Electric from its solar farm installation in Nueva Ecija.
A 10-year power supply contract in the deregulated electric power industry is often regarded as the "gold standard" because that will assure the project sponsor-firm of guaranteed revenue stream for injected capacity to its off-taker (capacity purchaser).
“This will provide SPNEC a base of contracted revenues, while being able to sell the rest of its energy to the spot market or other off-takers,” the solar firm noted.
Capacity buyer-AEC had declared the offer of SPNEC as a winning bids following the successful conduct of its competitive selection process (CSP), or that policy underpinned by the Department of Energy (DOE) which requires distribution utilities (DUs) to auction their required capacity procurement so they can corner "least cost power" from qualified suppliers or power generators.
SPNEC said AEC has awarded this RE-anchored PSA as part of its compliance to the Renewable Portfolio Standard (RPS) program instituted by the government, “with SPNEC emerging as the most competitive among five bidders.”
The RPS policy is an incentive mechanism for greenfield RE projects because that will provide them an alternative market because of the edict enforced upon DUs for them to source certain percentage of their supply from RE-generated capacities.
Solar Philippines founder Leandro Leviste described the conduct of Angeles Electric’s CSP as “very professional”. He expects that the result of the bidding “will benefit the consumers of Angeles City.”
The young businessman added “We’re grateful for this opportunity to work with Angeles Electric, a pioneer of the solar industry in the Philippines.”
As cast on blueprint, the SPNEC solar development in Nueva Ecija will be carried out in phases – with the initial capacity set at 50 megawatts. It will will eventually be ramped up until it reaches the full capacity installation target of 500MW.
Following its listing at the domestic bourse, SPNEC is firming up plans for the planned asset-for-share swap with its parent firm Solar Philippines, which is giving it leverage to expand its portfolio, including potential acquisition of more than 20 solar project companies.