Meralco targeting to procure additional power capacity

Following the successful competitive auction for the supply of 1,800megawatts (Mw) of capacity for 20 years starting 2024, the Manila Electric Company (Meralco) is preparing for the next batch of competitive selection process (CSP) for the supply of 1,850Mw.

Meralco utility head economics Lawrence Fernandez, in an interview, said the utility firm is finalizing its latest Power Supply Procurement Plan. Under this, Meralco is expected to bid out at least 1,850MW of additional power capacity needed by 2025.

“Based on our latest Power Supply Procurement Plan, we have requirements for 1000MW baseload by second half of 2025 and up to 850MW of mid-merit, also by 2025,” said Fernandez.

Meralco is currently working on the final figures before these are submitted to the Department of Energy (DOE). “Meralco will be submitting its latest Power Supply Procurement Plan as part of the Distribution Development Plan, this March. Meralco will have firmed up its future supply requirements by then.”

With the easing of community quarantine restrictions and the planned nationwide rollout of the Covid-19 vaccines, Meralco said it is preparing for an economic rebound by making sure it has sufficient power requirements to supply its entire franchise area.

Certain commercial and industrial establishments slowly resumed operation, Meralco noted. Industrial volumes inched up gradually by the end of 2020 as manufacturers started to operate. Recovery began from an all-time low volume of 655 gigawatt hours in April 2020.

For the first time since March 2020, industrial volumes reflected a positive 4-percent growth in December. The semiconductor and non-metallic industries provided the increase to the volumes and took the share in sales from the food and beverage, and packaging industries.

Meralco’s system peak demand last year reached 7,614MW on March 10, down by 2 percent from 7,740 MW on June 4, 2019.

In general, peak demand is expected to grow at a rate of 3 to 4 percent annually.

Last month, Meralco said it received “best” bids from two subsidiaries of SMC Global Power Holdings Corp. for the supply of 1800MW of power.

Excellent Energy Resources, Inc. (EERI) offered a levelized cost of electricity (LCOE) of P4.1462 per kilowatt-hour (kwh) while Masinloc Power Partners Co. Ltd (MPPCL) offered P4.2605 per kwh. Both are significantly below the LCOE reserve price of P5.2559 per kwh.

EERI will supply Meralco with 1,200 MW from its planned natural gas-fired power plant, while MPPCL will source 600MW from its coal plant to supply Meralco.