SOLAR PHILIPPINES Power Project Holdings, Inc. is planning to build 250-megawatts (MW) of new solar power capacity this year even without an approved power supply agreement (PSA), its top official said.
“We’re going to build all these plants without contracts because they are economically viable based on WESM (wholesale electricity spot market),” Solar Philippines President Leandro L. Leviste told reporters on the sidelines of the Asia CEO Forum on energy issues at Marriott Manila hotel in Pasay City, Wednesday.
“Our contract prices are even lower than WESM prices. Kung WESM nga mas kikita pa (Even against WESM prices, we’d still earn),” he said, referring to the venue for trading electricity as a commodity.
Mr. Leviste made the comment in response to questions about an offer it made to distribution utility Manila Electricity Co. (Meralco).
Solar Philippines has priced its offer at P2.99 per kilowatt-hour (kWh), lower than the Lopez-led First NatGas Power Corp.’s unsolicited proposal to supply power from its 414-MW gas-fired plant at P3.77 per kWh.
“We have 300 MW operating and under construction. We have between our three projects right now — for Meralco and other contestable customers — Tarlac, Tanauan and Maragondon projects, that will be 400 MW by the end of the year,” Mr. Leviste said.
Broken down, the 400 MW consists of 150 MW from the uncompleted portion of a 300-MW project, and 250 MW in new capacity.
“We have additional 250 [MW] beyond the 300 [MW] that will start construction during the year and all of these projects are starting construction without ERC (Energy Regulatory Commission) approval,” Mr. Leviste said.
Mr. Leviste said Solar Philippines has 5,000 hectares of land consolidated in Luzon with available power transmission interconnection where the company can build the new capacity. He noted each hectare can accommodate 1 MW.
“Pinapatunayan namin na talagang lamang ang consumer sa presyong binibili ng Meralco sa amin because we’re building it without a PSA (We are proving that consumers are at an advantage with the price that Meralco buys power from us because we’re building without a PSA),” he said.
Power generation companies usually seek ERC approval for their PSAs as the regulatory clears them to pass on the cost to consumers. Lenders also require these contracts to ensure that the project proponents will have a steady stream of future revenues.
“We’re in discussion with conventional and other renewable plants… [to offer power] at a price where it will be saving consumers P15 billion compared to Meralco’s current offered price,” Mr. Leviste said.
Solar power requires battery storage to address its intermittency. A tie-up with baseload power plant can ensure steady power supply along with a back-up battery, he said.
Sought for comment, Lawrence S. Fernandez, Meralco vice-president and head of utility economics, said: “I think it would not be proper for us to comment because the process is still undergoing. Let that process move. The bids and awards committee is administering that process and then make the formal announcement as needed.” — Victor V. Saulon