An executive of Solar Philippines expressed confidence the company will bag a power supply contract with Manila Electric Co. covering 85 megawatts of solar capacity, after it offered a lower price of P2.99 per kilowatt-hour than the proposal of original bidder Citicore Power Inc.
“Our offer to Meralco is P2.99 per kWh. The price that we had offered [is] to show in good faith that this can be the standard price for 5,000 megawatts of solar that can replace the current pipeline of new fossil fuel power plants,” Solar Philippines president Leandro Leviste said at the sidelines of the Financial Executives Institute of the Philippines forum.
Leviste said Citicore, which initially made an offer of P3.50 per kWh to Meralco, did not match the P2.99 per KWh price challenge of Solar Philippines.
Leviste said the company would source its capacity from its planned Tarlac solar power project.
Meralco head of utility economics Lawrence Fernandez said the parties still needed to submit documentary requirements before any supply agreement could be signed.
“I think we are at the point that we have completed the evaluation of the price challenge. We are now at the documentary requirements…We will announce officially when the contract has been signed,” Fernandez said.
Meralco earlier published an invitation to other companies to participate in a competitive selection process to supply 85 MW and challenge the price offer of Citicore on June 28.
Citicore offered to supply 75 MW to 85 MW of capacity from its three solar plants including Next Generation Power Technology Corp. in Mariveles, Bataan; First Toledo Solar Energy Corp. in Toledo, Cebu and Silay Solar Power Inc. in Silay, Negros Occidental.
Meralco is required to publish an invitation for a price challenge under the competitive selection process rules of the Energy Department and the Energy Regulatory Commission.
Solar Philippines was the lone challenger on the bid submission deadline of Aug. 14.
Solar Philippines earlier bared plans to replace coal plants with 5,000 MW of solar-battery farms.
“We have opted to sacrifice our returns to offer Meralco consumers the same price on 85 MW as we have offered for 5,000 MW. The exact rate will be made public next week, but what we can disclose is it should be the lowest true cost of generation in Philippine history,” Leviste said earlier.
Leviste said before the price challenge, “the local market had not yet demonstrated that solar could be cheaper and more reliable than coal.”
“Now, we hope this price will signal that Solar-Battery farms offer the least cost for the Philippines, such that even fossil fuel companies will convert to solar, to improve their returns through lower costs,” Leviste said.
He said vertical integration enabled Solar Philippines to make solar cost-competitive.
Solar Philippines began manufacturing solar panels in Sto. Tomas, Batangas with 800 MW annual capacity.
The company will soon begin exporting solar panels, under original equipment manufacturer contracts with suppliers from China, to the US and Europe.