Meralco taps McKinsey for business dev’t plan

Manila Electric Co. (Meralco) has tapped consultancy firm McKinsey & Co. for advisory on power generation investments, renewables and liquefied natural gas (LNG) in particular, according to its top official.

The group is pursuing power generation developments which are mostly of coal technology, but is also looking at other technologies, Meralco chairman Manuel V. Pangilinan said.

“I know we have engaged McKinsey to advise us on the overall power sector, particularly the generation part of the business so we can understand what the role is of renewables and gas in the overall equation,” he said.

McKinsey is a global management consulting firm that serves a broad mix of private, public, and social sector institutions. Among its services include electric power and natural gas to help businesses “rethink strategies, build capabilities, and pursue new opportunities.”

Pangilinan, however, said Meralco has not yet firmed up plans on LNG investments.

Meralco had previously looked at possible investments in LNG, which is natural gas converted into liquid for ease of storage or transport.

In 2015, Meralco said it was in talks with Osaka Gas Co. Ltd., Japan’s second largest natural gas supplier, for a possible development of an LNG facility.

At that time, Osaka Gas was doing a feasibility study on a planned $2-billion, 1,500 megawatt (MW) gas-fired power plant project with Meralco.

But in 2016, Meralco said the lack of a firm energy mix policy, demand, and favorable pricing levels have stalled plans to enter the LNG space.

Meanwhile, Meralco’s power generation investments are under subsidiary Meralco Powergen Corp. (MGen) and the company is now charting its direction from fossil fuel to low carbon emitting technologies such as renewables, MGen president and CEO Rogelio Singson said.

He said the company is looking at all renewable energy technologies, may it be solar, wind, or even hydro.

“In the next three to four years, we are going to develop at least 500 to 600 MW (of renewable projects). It should be at least 20 to 30 percent ng MGen capacity,” Singson said.