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Manila Bulletin devider Business devider MGen plans to convert coal assets to gas-fired plants

MGen plans to convert coal assets to gas-fired plants

Published Dec 1, 2024 12:36 pm

Meralco PowerGen Corporation (MGen) plans to convert two of its coal-powered units into gas-fired plants in response to the coal moratorium.

Yari Miralao, MGen Gas Energy Holdings, Inc. (MGen Gas) president and chief executive officer, said the projects with Global Luzon Energy Development Corporation (GledC) and Redondo Peninsula Energy Inc. (RP Energy) would undergo this transformation to become viable and operational power sources.

"These projects already have associated gas infrastructure and running costs. RP Energy is a lease and GledC was purchased. Therefore, the natural progression is to convert them into gas plants," he told reporters during a media briefing in Singapore.

"Gas is an economy of scale game. The natural progression is for market participants to consolidate due to the significant investment and risk involved. They would likely vertically integrate."

This shift away from coal stems from the Department of Energy (DOE)-mandated coal moratorium, which aims to reduce carbon emissions and support the growth of renewable energy sources and natural gas in the Philippines.

While this gas conversion is planned, MGen Gas awaits approval from the Philippine Competition Commission (PCC).

"My goal is to convert these two units into gas-ready plants. The site and interconnection are already in place. We just need a new environmental compliance certificate (ECC)."

Miralao also shared that this initiative involves several stages, including a study with the International Energy Consultants (IEC), followed by technical scoping and a baseline study, expected to be completed within 18 months.

"MGen currently has two stranded assets incurring running costs. They were designed as coal plants, but we know they will never operate as such. The most prudent course of action is to convert them into gas plants.”

Last week, the power generation arm of Manila Electric Co. said  it plans to invest at least $2 billion to develop two new coal-fired power facilities in Cebu and Quezon provinces.

Emmanuel Rubio, MGen president and CEO said the company has received interest from four local banks and two Indonesian lenders to finance the construction of the 1,200-megawatt Atimonan plant in Quezon and the 80-MW Toledo project in Cebu.

Rubio estimated an investment of about $1.6 million for each megawatt of coal-fired power, bringing the total investment for the two facilities with a combined capacity of 1,280 MW to $2 billion. 

He added that both projects have already secured environmental compliance certificates from the Department of Environment and Natural Resources.

Coal-fired power plants are considered reliable sources of baseload power, similar to natural gas and geothermal energy, due to their ability to operate continuously and provide a steady supply of electricity.

Related Tags

MGen Renewable Energy Inc. (MGreen) Manila Electric Co. (Meralco)
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