By Victor V. Saulon, Sub-Editor
MANILA ELECTRIC Co. (Meralco) is looking to invest around $800 million in two wind farms, its president said, as he disclosed details about the company’s plan to expand its portfolio to include 300 megawatts (MW) of the renewable energy.
“You’re talking 300 MW. So [the investment is] probably lower than $900 million. At $3 million per MW, make it $800 million, plus or minus,” Oscar S. Reyes, Meralco president and chief executive officer, told reporters on Tuesday.
He said on a 75%-25% debt-equity ratio for project financing, Meralco would need to invest roughly $200 million if it would shoulder the full equity portion.
“I think it will take maybe 24 months for the whole [investment to be spent],” Mr. Reyes said.
Asked why Meralco is diversifying into wind energy, he said: “We have gotten indications that are attractively priced to us because they are significantly lower than second round FiT (feed-in-tariff) rates.”
Mr. Reyes was referring to the guaranteed tariff of P7.40 per kilowatt-hour for 20 years that was awarded to early investors in wind energy. He said the output of the wind farms would be supplied to Meralco in a future power supply agreement (PSA).
He said the 300 MW wind farm is broken down as two 150-MW projects that are under development.
“They are developing and they are inviting us to… provide the PSA of their output and at the same time, see if we are interested to invest,” Mr. Reyes said. “We are focusing first on the PSA.”
“Investment is still to be discussed,” he said. “We’d like to be an enabler. If they don’t need the investment, we remain open. It’s up to them whether they [will] welcome [us].”
Mr. Reyes said the wind energy investment of Meralco would be housed under subsidiary Meralco PowerGen Corp. (MGen).
Rogelio L. Singson, MGen president and chief executive officer, earlier said that Meralco’s utility scale power development subsidiary had been looking at wind energy proposals and might make a decision on investing early this year.
Ahead of the proposed renewable energy projects, MGen is developing several coal-fired power plants, including the 100% company-owned ultra-supercritical coal-fired power plant under subsidiary Atimonan One Energy, Inc.
The two-unit plant, each with a capacity of 600 MW, is awaiting Energy Regulatory Commission (ERC) approval of its power supply agreement (PSA).
MGen has a 47% stake in Redondo Peninsula Energy, Inc. (RP Energy), which is awaiting the ERC approval of its PSA with Meralco for 225 MW of the first of two 300-MW units, and 75 MW with the retail electricity supply business of Aboitiz Power Corp.
Therma Power, Inc., a unit of AboitizPower, owns 25% of RP Energy’s coal-fired power plant at the Subic Freeport Zone, while Taiwan Cogeneration International Corp. holds another 25%.
MGen has a 51% stake in another coal-fired power plant being developed in Quezon province with a capacity of 455 MW under San Buenaventura Power Ltd. Co. (SBPL).
SBPL, which is expected to start commercial operation in mid-2019, is a partnership between MGen and New Growth BV, a subsidiary of the Electricity Generating Public Co. Ltd. or EGCO Group of Thailand.
Another project, St. Raphael Power Generation Corp., is a 50-50 partnership between MGen and Consunji-led Semirara Mining and Power Corp. It is also awaiting ERC approval of its 400-MW PSA with Meralco. The planned coal power plant in Calaca, Batangas has two units, each with a capacity of 350 MW.
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls.