AC Energy eyes partnerships in Vietnam
AC ENERGY Holdings, Inc. is in talks with prospective partners in Vietnam for renewable energy projects as it seeks to take advantage of the Philippine neighbor’s feed-in-tariff regime as well as its ongoing privatization initiatives.
“We’re talking to potential partners in Vietnam,” John Eric T. Francia, AC Energy president and chief executive officer, told reporters, adding the entities it was considering are Vietnamese.
He gave the update on the company’s regional expansion on the sidelines of IBC Asia’s Power and Electricity Week, a two-day conference at Solaire Resort and Casino in Parañaque City.
“We’re doing a lot of early business development works in Vietnam,” he said, describing AC Energy as “very busy” in exploring ventures in the foreign market.
He said the move to look at Vietnam was in part because of its feed-in-tariff for (FiT) incentive for solar and wind projects.
In the Philippines, the country set a FiT installation target for wind and solar, which had been fully subscribed, as well as for biomass and run-of-river hydro power projects, both of which remain to be fully taken up ahead of the end-2017 deadline.
Mr. Francia said Vietnam is offering a solar FiT of 9.35 US cents (around P47.59) per kilowatt-hour and nearly 8 US cents for wind. He said subscription to the solar FiT ends in June 2019, while he was uncertain about the deadline for the guaranteed tariff for wind.
“It’s really exploring partners,” Mr. Francia said about the company's activity in Vietnam at present.
“We will not invest on our own in Vietnam. We will do it if we have local partners,” he added. “Whether or not there’s a [foreign ownership] limitation, we want to do it with local partners.”
The move to develop renewable energy ( RE) projects, locally and internationally, is in line with the company’s aim to develop by 2020 up 2,000 megawatts (MW) of capacity, of which 1,000 MW is targeted to come from renewable energy. The company reached a capacity of 1,000 MW in 2016.
“Right now, if you look at our existing investments, we’ve committed roughly a $1 billion of equity. Twenty percent of that commitment is in Indonesia,” he said, referring to the company’s wind farm project in Sidrap, South Sulawesi and Chevron Corp.’s geothermal operations in Indonesia.
“That’s sort of our baseline today, 20% contribution from international [projects],” Mr. Francia said.
At present, he said the company’s foreign renewable energy projects amount to a capacity of close to 200 MW, or two-thirds of its existing 300 MW of RE capacity.
“I would think at least 50% of our RE would be international. Right now it’s already more than 50%. I don’t see that gap being closed any time soon,” he said.
“Of course, over time we want to scale up big time in the Philippines. But it’s gonna take time for us to scale up RE focused on solar and wind,” he added.
Mr. Francia said AC Energy is also open to exploring conventional energy projects in Vietnam, which he said is going through an “equitization or a privatization process.”
“We’re looking at that. But nothing is imminent yet,” he said.
Of its existing projects, AC Energy has a 20% stake in the 632MW GNPower Mariveles Coal Plant Ltd. Co.; 50% in the 668MW GNPower Dinginin Ltd. Co.; 35% in the 244-MW South Luzon Thermal Energy Corp.; and 85% in the 552-MW GNPower Kauswagan Ltd. Co.
Based on data supplied by AC Energy, its 19.8% stake in the 637-MW geothermal steam and power capacity in Darajat and Salak geothermal fields along with its 75% stake in the 75-MW wind farm project in Sidrap, South Sulawesi more than doubled the company’s clean energy capacity to at least 264 MW.
In April this year, AC Energy announced the acquisition of 100% ownership of Bronzeoak Clean Energy and San Carlos Clean Energy, entities with renewable energy development, management and operations platform.
That platform supports San Carlos Solar Energy, Inc., Negros Island Solar Energy, Inc., Monte Solar Energy, Inc., San Carlos BioPower, Inc., South Negros BioPower, Inc. and North Negros BioPower, Inc.