Facing challenges, SPNEC seeks end to power deal
By Lenie Lectura – August 14, 2024
from Business Mirror
TRANSMISSION line constraints prompted the Pangilinan-led SP New Energy Corp. (SPNEC) to ask for a termination of the solar power contract awarded by the Department of Energy (DOE) during the first round of the green energy auction (GEA).
The ratification of the request for termination sent to the DOE of its GEA-1 notice of award covering its Santa Rosa project was one of the issues discussed and approved during a board meeting last August 12, SPNEC said in a disclosure to the stock exchange last Tuesday.
When sought for details, SPNEC President and CEO Emmanuel V. Rubio said the company’s request for termination of SPNEC’s GEA round 1 award with the DOE “stems from the challenges faced by this projects particularly on transmission constraints, which is beyond our control.” The DOE is still evaluating SPNEC’s request.
“Our request remains subject of course to DOE approval and are well within the parameters established in GEA 1 guidelines. Having said that, SPNEC remains as a committed partner of the government’s thrust to increase the share of renewable energy in the overall energy mix of the country, as we continue to assess and develop opportunities while we progress with execution our existing projects,” Rubio said.
The Santa Rosa Nueva Ecija 2 solar power project was supposed to deliver 280 megawatts (MW) by December 25, 2025 at an offered rate of P3.6700 per kilowatt hour (kWh).
The board also discussed the indicative terms of Terra Solar Philippines Inc. and Terra Nueva Inc. project financing with SPNEC, owning 100 percent equity in each entity; the corporation’s exercise of the Put Option under the Option Agreement with Solar Philippines Power Project Holdings, Inc.; and its second quarter financial results.
The SPNEC is now controlled by the Pangilinan group, through MGen Renewable Energy Inc., the renewable energy development arm of Meralco PowerGen Corp., a wholly owned subsidiary of Meralco.
Last month, SPNEC Chairman Manuel V. Pangilinan said there is “a very long list of investors” who are interested to buy as much as 40 percent of the P200-billion Terra Solar power project.
“Very active, very keen interests, very long list of investors. So, I think the actual bid date binding offer should be August 15. So, by the end of August, the board will have to choose.”
The solar project is expected to be completed in two phases–2026 for Phase 1 and 2027 for Phase 2.
Rubio said interested investors are from Japan, London, US, and Middle East.
The Terra Solar project in Nueva Ecija and Bulacan consists of a 3,500-megawatt (MW) solar power plant and a 4,000-MW hour energy storage system. It is expected to generate more than five billion kilowatt-hours of electricity per year.
The project remains on track for key milestones with significant progress anticipated in the coming months, said Rubio.
