Power retailer Manila Electric Co. said Monday it signed supply agreements with three companies for 500 megawatts of mid-merit capacity effective Dec. 26, 2019 for a term of five years.
Meralco signed the PSAs with First Gen Hydro Power Corp., Phinma Energy Corp. of the Ayala Group and South Premiere Power Corp. of San Miguel Corp. after their respective offers were declared as the best bids by the third-party bids and awards committee during the competitive selection process on Sept. 11.
“Another great day for Meralco customers and we thank our genco partners”•SMC power group, First Gen power group and Ayala/Phinma power group for offering generation rates well below the prevailing generation rates and the Meralco reserve LCOE [levelized cost of energy] price cap and for making the Meralco customers the runaway winner in this groundbreaking competitive bidding,” Meralco president and chief executive Ray Espinosa said.
“With these new PSAs, Meralco customers will enjoy savings of about P4.4 billion a year for five years,” Espinosa said.
First Gen Hydro Power will supply 100 MW with an all-in headline rate (VAT inclusive) of P5.1908/kWh and computed all-in LCOE (VAT inclusive) of P5.3989 per kWh.
Phinma Energy will supply 110 MW at all-in headline rate (VAT inclusive) of P5.5858 per kWh and computed all-in LCOE (VAT Inclusive) of P5.5858 per kWh.
South Premiere Power’s contract is for 290 MW and has an all-in headline rate (VAT inclusive) of P5.5347 per kWh and computed all-in LCOE (VAT inclusive) of P5.7527 per kWh.
Espinosa also said the CSPs allowed the participation of clean and renewable energy sources.
“The CSP conducted by the TPBAC is technology-agnostic. About 33 percent of the 500 MW PSA we signed today is from RE, while 58 percent is from natural gas. Meralco is committed to signing partnerships that can deliver competitive electricity for our customers,” Espinosa said.
AC Energy chief executive Eric Francia said their portfolio of power projects allowed the company to successfully bid for the Meralco contracts.
“This is one game-changer that I believe we’ve seen and I hope will be ushering a new era into the future of CSPs, the power of portfolio,” Francia said.
Meanwhile, Meralco is also planning to submit to the Energy Department the revised terms of reference for the second round of CSP for the supply of 1,200 MW greenfield or new capacity by 2024 over a period of 20 years. The CSP process held on Sept. 10 was declared a failure after only one company submitted a bid.
“We will present that to the DOE. Once it is cleared by the DOE, then we will publish our notice…There were some enhancements…There is no technical issue because we made sure it was fuel-neutral. So it can be gas, it can be coal. Our requirement is high-efficient, low-emission, which gas can easily comply with and coal with the newer technologies,” Espinosa said.