DIVERSIFIED conglomerate San Miguel Corp. (SMC) plans to build up to 10,000 megawatts (MW) of renewable energy facilities in the next 10 years, adding to its existing installed capacity coming mostly from traditional coal and gas power plants.
“San Miguel is going to invest heavily on renewable energy,” Ramon S. Ang, SMC president and chief operating officer, told reporters.
Among renewable energy resources, he identified hydropower, wind, ocean tide and battery storage as the company’s possible investment ventures. He declined to disclose details on which of these will corner the biggest share, saying competitors might beat him in the projects.
“We predict to invest up to 10,000 megawatts in the next 10 years,” Mr. Ang said.
He said the required investment in renewable energy would be substantial as these remain costlier to build than a coal-fired power plant, except for solar energy. He brushed off solar energy, saying its availability is limited as experienced by other countries that had to resort to other sources to maintain the delivery of the required power capacity.
“The idea is to put up as many as possible,” Mr. Ang said, adding that each of the target projects has a good potential even the small ones.
Sana (Hopefully), each hydro can produce 1,000 MW,” he said.
Mr. Ang said initial studies have shown good “wind profile” in an area in Luzon, which the company is considering to build a wind farm. He said a wide area within the country’s main island remains viable for a wind energy project.
“We have a report already — a very good wind profile, a very big capacity can be installed. And the land for that project is already owned by San Miguel,” he said.
SMC, through its energy subsidiaries, has an installed capacity of around 4,000 MW after the addition of the 630-MW Masinloc coal-fired power plant, which it bought for $1.9 billion in December last year from the equity holders of the plant’s owner Masin-AES Pte. Ltd.
In the same media briefing, Mr. Ang gave an update on the case between SMC unit Petron Corp. and state-led National Oil Co. (PNOC).
In October last year, Petron Corp. filed a case against PNOC for breach of a binding and compulsory sale-leaseback contract, which the listed company said threatens to hurt its operations, its shareholders and the Philippine economy.
Petron had asked the Mandaluyong Regional Trial Court for the issuance of a temporary restraining order to “stop PNOC from performing acts aimed at ousting Petron of its leased properties.” The company sought the court’s help over PNOC’s “threats, breach of sale and leaseback agreement.”
Petron said it had offered to negotiate the agreement with PNOC as early as 2016, but it had been constrained to seek judicial intervention after the government company said earlier last year that it would terminate the lease.
Mr. Ang said depending on the outcome of the case, he might elevate the legal dispute for international arbitration.
The case stemmed from a notice from PNOC directing Petron to abandon and clean up the contested sites on or before expiration of the lease, which is in August this year. Petron said PNOC had offered the properties covered by the leases to interested new independent oil companies, “in total disregard of the rights of Petron.”
Petron has existing lease agreements with PNOC for the sites of its $3-billion refinery in Bataan, 24 bulk plants and 67 gasoline stations. The company supplies more than a third of the country’s petroleum requirements.
Mr. Ang said Petron’s leased properties are originally owned by it and acquired over several years to be used for its refinery, distribution and sales operations. Petron, however, was compelled to give up its land to PNOC in 1993 to comply with the requirements of its privatization.
“To secure foreign and local investments in Petron and ensure stability of its operations, the transfer of the properties was enabled through a deed of conveyance and lease agreements that guaranteed its long-term and continuous use by Petron,” the company previously said. — Victor V. Saulon