Meralco negotiating for expansion of 4 power supply contracts

Power utility giant Manila Electric Company (Meralco) has kicked off negotiations with four (4) power generation companies on possible renewal of power supply agreements (PSAs) covering capacity of 1,900 megawatts.

According to Meralco President Oscar S. Reyes, the company has more than a year to complete the process on supply procurement or the required bidding process for this chunk of capacity on the utility firm’s future power supply.

The generating facilities involved are the Sem-Calaca Power plant of the Consunji group; the Ilijan gas plant of San Miguel Energy Corporation; the Sual coal-fired plant which is also under the San Miguel group; and the Pagbilao coal plant of the Aboitiz group.

These bilateral power supply deals, according to Reyes, are due to lapse yet in years 2021-2022, but they have been advancing negotiations to make sure that they corner the most competitive prices for their customers.

“We have more than a year to negotiate…it’s still early, but we would like to find out how supply-demand will shape when these contracts will fall due,” he explained.

Reyes qualified they have been watching out several developments – both in the country’s power system as well as in the global energy landscape.

One is the prospective efficiency that gas could inject into power systems – especially with the anticipated massive integration of renewables in the country’s power system.

The RE development space will be anchored on the enforcement of the Renewable Portfolio Standards (RPS) by year 2020 – that is a policy that requires distribution utilities to secure part of their supply from RE generation.

Additionally, Reyes noted that they are looking at the potential of battery storage – primarily as a viable component of the Philippine electricity system in the next 5 to 10 years.

The other investment sphere intently being evaluated is that of micro grids – as all of these will eventually impact on the supplydemand portfolio of Meralco, according to the company executive.