SMC offers power from Ilijan plant
BY LENIE LECTURA – DECEMBER 5, 2022
from Business Mirror
San Miguel Global Power (SMGP) is offering the full 1,200 megawatts (MW) capacity of its Ilijan natural gas plant to supply the power requirements of the Manila Electric Co. (Meralco) for just a fraction of its capital cost.
The power arm of conglomerate San Miguel Corp. (SMC) said the move is meant to help keep electricity prices as low as possible for consumers, while ensuring steady supply of electricity in the coming months.
It can be recalled that the Department of Energy (DOE) had said that it expects a “massive” power supply deficit in Luzon, unless the Ilijan power plant is reactivated as part of the energy mix.
Ilijan, which accounts for 10 percent to 12 percent of Luzon’s net dependable capacity, will only cost Meralco a minimal P1.00/kwh in capital recovery fee, or half of its capital cost on the facility.
SMC President Ramon S. Ang said there had been initial discussions between SMGP unit, South Premiere Power Corp. (SPPC), and Meralco on Ilijan’s offer.
“As we have said in the past, we will continue to look for ways to help make sure consumers will still have some protection from the effects of skyrocketing global fuel prices. This is one of the best and most direct ways we can show solidarity with our people in this time of crisis,” said Ang.
Essentially, this will mean that the incremental power supply costs from such capacity for households may be cut down significantly compared to prevailing costs from coal power generation.
“Because of unforeseen global events such as the Russia-Ukraine war, fuel prices are at unprecedented highs, and supply is tight. We are in a crisis and this is a shared burden by all Filipinos—power consumers, the power sector, government. By immediately foregoing returns, we continue to carry our share of the burden, while getting just enough to make sure plant operations continue and remain sustainable,” Ang added.
In order to help address fuel constraints, the company is also offering to help source the fuel for the Ilijan facility—whether from its own allocation of Malampaya gas or liquid fuel—which Meralco will pay for.
Ang said SMGP is also willing to work with Meralco in using its 70 PJ banked gas at a cost much lower than the prevailing cost of coal power generation. This, he said, would give Meralco the flexibility to manage its overall power generation costs, and ensure adequate power supply.
He said the company also expects the completion of a liquefied natural gas terminal facility it has tolled by March 2023, according to most recent construction updates. The company contracted the facility to receive, store, and re-gassify commercial LNG, but pandemic restrictions and the Russia-Ukraine war delayed the project.
