Power utility giant Manila Electric Company (Meralco) is soliciting bids for 850-megawatt renewable energy (RE) capacity via competitive selection process (CSP) that will match the unsolicited offer of Terra Solar of the Razon-Leviste group.

In a bid notice submitted to the Department of Energy (DOE), Meralco advised interested parties that they can lodge expressions of interest (EOI) to the third party bids and awards committee (TPBAC) until February 2, 2022 at 4:00pm cut-off. A pre-bid conference will be held on February 4, while bid submission deadline will be on March 7 this year.

The power firm noted that the 850-MW RE capacity procurement will form part of its mid-merit supply portfolio that shall be underwritten with a power supply agreement (PSA) covering 20 years.

“This CSP round is in compliance with the DOE’s policy on Renewable Portfolio Standards (RPS) and forms part of Meralco’s efforts to source up to 1,500 MW of its power requirements from renewable energy sources,” the company explained.

Meralco indicated that, through its TPBAC, it will be seeking bids that will challenge the P6.0800 per kilowatt hour (kWh) headline rate and levelized cost of electricity (LCOE) offer of Terra Solar.

Terra Solar, a joint venture firm of Prime Infrastructure Capital Inc. of billionaire Enrique Razon and Solar Philippines Power Project Holdings Inc. of young businessman Leandro Leviste, was the first to offer for Meralco's 850-MW RE capacity procurement.

The price offer of Terra Solar was reckoned on 50-percent plant capacity factor (PCF), no escalation, with the following components: capital recovery fee of P23,608.20 per kilowatt-year; variable operation and maintenance (O&M) fee of P0.3100 per kWh; line rental cap at P0.1000 per kWh; ancillary services cost recovery cap of P0.2800 per kWh and a zero-rated value added tax (VAT) incentive.

As stipulated in the submission to Meralco-TPBAC, Terra Solar is targeting solar farm installations with energy storage systems (ESS) across various sites in Batangas-Cavite, Nueva Ecija, Tarlac and Zambales.

It also specified that 600 MW of its proposed capacity installations will be available by February 26, 2026, and the balance of 250 MW will be on stream to deliver power by February 26, 2027.

Meralco said that on an annual basis, the available hours shall result in a guaranteed output of not less than 50 percent PCF (plant capacity factor) with respect to the contract capacity. The guaranteed output does not translate to a corresponding minimum energy off-take, Meralco added.

Meralco similarly stated that it is reserving the right “to require the delivery of the full contract capacity of 850 megawatts (net) by February 26, 2026 – provided there is a 24-hour prior notice.”

Relative to the guaranteed output of the RE supplier, the power firm noted that it shall be provided with “100-percent available contract capacity for 6 to 13 hours daily – covering the peak hours of Meralco, for at least 84 hours in a week.”

The current peak hours of Meralco are from 8:00am to 9:00pm,”but this may change during the required contract period upon mutual consent of both parties.”

It was further emphasized that “no capacity and electric output of the plant, within the contract capacity and within the availability of supply, shall be contracted under an agreement apart from the resulting power supply agreement.”