Meralco to supply RE power to firm
BY LENIE LECTURA – OCTOBER 28, 2022
from Business Mirror
THE Manila Electric Co. (Meralco) signed a 20-year Power Supply Agreement (PSA) with Terra Solar Philippines, a unit of Prime Infra-led Terra Renewables Holdings, Inc., for the supply of 850 megawatts (MW).
Of the 800MW mid-merit supply, 600MW will be available by February 26, 2026, while additional 250 MW will be delivered starting February 26, 2027 at a headline and levelized cost of electricity (LCOE) rate of P5.80 per kilowatt-hour, which was based on assumptions at the time when the competitive challenge for the unsolicited proposal was launched.
“The rate for this renewable energy supply offer is very competitive and lower than fossil-powered generation plants, especially at this time when fuel prices are skyrocketing. This PSA between Meralco and Terra Solar is very strategic as we ensure availability of adequate and cost-competitive power for our more than 7.5 million customers in the coming years,” said Jose Ronald V. Valles, Meralco first vice-president and head of regulatory management.
Terra Solar’s 850MW mid-merit supply can approximately power 1.55 million houses per year (average of 200 kilowatt-hour a month), while displacing an annual consumption of approximately 1.4 million tons of coal or 930 million liters of oil.
Paramount importance
THE project is a combination of 2,500MW to 3,500MW solar photovoltaic (PV) system and approximately 4000 megawatt-hour (MWh) to 4500-MWh energy storage. Through this system, Terra Solar’s sites can store excess energy when electricity is produced and supply it back to the grid when necessary, providing stable power to customers and communities.
Terra Solar is the first to offer the combination of solar PV and energy storage in such a large scale in the Philippines, shifting the nature of a solar plant from usual peaking to one which provides mid-merit capacity.
“This contract with Meralco is our response to help meet the increasing demand for power through a more cost-efficient and sustainable manner. We applaud Meralco for its drive to decarbonize the energy industry and ensure reliable quality power supply to support its customers,” said Enrique K. Razon Jr., Prime Infra chairman.
“Meeting the power supply needs is of paramount importance to sustain the economic growth of the country, particularly following the challenges we faced through the pandemic and will continue to face in light of the economic headwinds the world is facing today,” Razon added.
The PSA signing marks the culmination of the competitive selection process (CSP) the renewable energy project underwent per regulations of the Department of Energy (DOE).
Cements commitment
THE Meralco Third-Party Bids and Awards Committee (TPBAC) earlier this year administered two rounds of CSP for the offer, both of which failed due to lack of challengers.
Since there were no outstanding disputes, the TPBAC advised Meralco that it may enter into direct negotiation for the contract capacity requirement, pursuant to the Revised CSP Rules.
“In addition, this PSA forms part of our compliance to the DOE’s Renewable Portfolio Standards policy and at the same time cements our commitment to source up to 1,500 MW of our power requirements from renewable energy,” added Valles.
The PSA will be filed with the Energy Regulatory Commission and will be subject to regulatory proceedings and approval prior to implementation.
“We are proud to develop this innovative, solar PV-plus-storage project that will contribute significantly to the share of renewable energy in the power generation mix. We are on track in the project development stage and target to provide stable mid-merit power supply to Meralco starting 2026,” said Terra Renewables President and CEO Guillaume Lucci.
“This plant is today one of the largest contracted solar-plus-storage plant in the world. Prime Infra, together with its partner, will invest some P200 billion into developing Terra Solar. It is a step change in the way power generation is approached,” Lucci added. “As a company pursuing economically critical and socially relevant infrastructure, Prime Infra is committed to do its part in accelerating the clean energy transition and strengthening the country’s energy security.”
