Meralco lines up 1,400MW supply procurement

Published August 6, 2022, 12:21 PM

by Myrna M. Velasco

Power utility giant Manila Electric Company (Meralco) is lining up series of competitive supply selection processes (CSPs) for 1,400-megawatt capacity requirement in the immediate to medium-term.

According to Atty Jose Ronald Valles, first vice president and head of regulatory at Meralco, after the power firm’s procurement of the scheduled bidding for 500MW mid-merit capacity, the subsequent round of CSPs will focus on another 200MW and 100MW of baseload renewable energy (RE) capacities. Meralco will forged power supply agreements (PSAs) with the winning supplier.

The next major PSA that the utility firm will also underwrite would be a 600MW conventional baseload capacity – and that shall be anchored on the technology agnostic policy set forth by the Department of Energy.

Presently, Meralco is negotiating with Terra Solar, a joint venture between Prime Infrastructure Holdings of billionaire Enrique Razon and Solar Philippines of young businessman Leandro Leviste, for a 20-year PSA on the initial 850MW mid-merit RE capacity that is set for delivery in 2026.

“After Terra Solar, the other one that commenced CSP already is the 500MW mid-merit, in accordance with the PSPP (Power Supply Procurement Plan) approval by the DOE,” Valles noted.

The 500MW mid-merit capacity contract, as proposed by another Razon-led firm Ahunan Power Inc. (API), shall be sourced from the generation capacity of pumped hydro storage facilities that it will be developing in Rizal and Laguna provinces.

Under the original proposal of API that is being subjected by Meralco to a competitive challenge, the headline and levelized cost of electricity (LCOE) rate for the contracted capacity had been pegged at P4.0511 per kilowatt-hour (kWh) — exclusive of pumping/charging energy costs; and at a plant capacity factor of 47.95-percent.

The approved CSP terms of reference (TOR) for the 500MW mid-merit energy sourcing prescribes that the contracted capacity “should be available for 6 to 12 hours daily covering Meralco’s peak hours for at least 84 hours a week.”

He added that for the next auction round of capacity procurements, “we have 200MW baseload for RE to form part of our requirement; and another 100MW baseload RE; and 600MW conventional baseload – also up for CSP but we haven’t approved yet for submission to the DOE.”

The power firm has not specified yet also the prescribed delivery dates of the RE baseload capacities; as well as the 600MW capacity that shall be generated from conventional power technologies.