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MGen not keen on acquiring Ayala’s coal-fired power plants

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Meralco PowerGen Corp. (MGen)

By Victor V. Saulon, Sub-editor

MERALCO PowerGen Corp. (MGen) is not keen on acquiring the coal-fired power plants being offered by Ayala-led AC Energy, Inc., saying the company’s thrust is towards developing renewable energy.

“Personally, I’m for renewables. Ayaw ko ng (I don’t like) old technology,” Rogelio L. Singson, MGen president and chief executive officer, told reporters in a recent briefing.

He said MGen, a unit of distribution utility Manila Electric Co., shares his “personal conviction.” Should the company decide to build a new coal-fired power plant, he would prefer one that emits only steam and no particles from its smokestack.

In May this year, AC Energy announced it was looking for buyers for as much as half of its thermal energy platform and possibly raise up to $1 billion in part to support its regional expansion.

Mr. Singson also said MGen’s decision was in part because AC Energy does not hold a controlling stake in the thermal projects.

AC Energy has a 20% stake in the 632-megawatts (MW) GNPower Mariveles Coal Plant Ltd. Co.; 50% in the 668-MW GNPower Dinginin Ltd. Co.; 35% in the 244-MW South Luzon Thermal Energy Corp.; and 85% in the 552-MW GNPower Kauswagan Ltd. Co.

“Minority lang sila, hindi naman majority (They are a minority, and not a majority stakeholder),” he said, estimating AC Energy’s stake in the thermal portfolio at around 43%. “They themselves are selling because they want to shift to renewables.”

Like AC Energy, MGen has a stake in a number of coal-fired power plant projects that are in different stages of development.

Its unit Atimonan One Energy, Inc. (A1E) is building a two-unit ultra supercritical coal-fired power plant, each with a capacity of 600-MW in Atimonan, Quezon.

A1E’s PSA with distribution utility Meralco was submitted to the ERC in April 2016 and had gone through public hearings, technical working group review and assessment of the tariff.

Another unit, San Buenaventura Power Ltd. Co., is constructing a 455-MW facility in Mauban, Quezon province. The country’s first supercritical coal-fired power plant is targeted to be completed in mid-2019.

The third project, a coal-fired power plant under Redondo Peninsula Energy, Inc., has two units, each with a capacity of 300 MW using the circulating fluidized bed technology.

Mr. Singson said MGen remains keen on developing renewable power sources, including solar and wind.

In May, Mr. Singson said the company targets renewable energy to account for at least 20-30% of its attributable capacity in the coming years. He noted in the next three to four years, the company aims to develop at least 500-600 MW of renewables.

“I’ll keep it at that level,” he said, when asked if there were changes in MGen’s targets.