Meralco eyes 600MW capacity expansion

By Mari S. Neri

MANILA, July 30 (PNA)--Distribution giant Manila Electric Company (Meralco) plans to expand its power projects in Luzon by 600 megawatts from 2011 to 2013.

Oscar Reyes, chief energy adviser and Meralco chief operating officer said the company's generating capacity depends on what the Luzon grid will need.

He said the grid is likely to need 600 MW in the next three years.

According to Reyes the company is eyeing to go for clean coal technology as this is deemed to be the most cost competitive among other fuels available for power generation.

“Our aspiration is to be able to help contain the cost of power, which would mean that we would most likely be focusing in the early stages towards the more traditional fuels for power generation,” he said.

“We're also looking at renewable energy sources, but I think we have to do this in a broader perspective to ensure that we are bringing into the system power that consumer can really afford. So we look at a whole range, but in the initial stages with bias sources, I think the call of the market and the call of the consumers (would be) for more cost competitive power,” Reyes also said.

But Meralco president and CEO Manuel V. Pangilinan said they are initially looking at existing power plants or the so-called brownfield projects, which are power plants that are existing that may require expansion or rehabilitation.

“So maybe those power plants can be put on-stream in terms of additional capacity anywhere in the next two to three years,” he said.

Apart from the brownfield, Pangilinan said that greenfield is also an option, but these projects would take a little longer to complete than the brownfield.

“We are looking at a whole raft of opportunities that may be made available to Meralco in terms of investing in power plants,” Pangilinan said.

Another option is to partner with existing power generation but Pangilinan said the preference is for Meralco to take a controlling or majority position.

“But you know, we're not ruling out prospects of a partnership. It's pretty much open to any formulation that is able to help us manage the power rates moving forward,” he said.

At present Meralco is in talks with a number of parties, not only for clean coal, but also for natural gas either piped gas or imported liquefied natural gas, said Reyes.

“But I think the main issues are fuel assurance and fuel price volatility. As this will be significant increments to the total capacity of the grid, I think we have to ensure that we can feel comfortable with continued reliable supply of the fuel. I think this is where natural gas or imported LNG will require more due diligence as these will be imported from further locations and will be reliant on the logistics of LNG. At the same time, price volatility is more likely high in the case of LNG as compared to coal,” Reyes said.(PNA)
RMA/MSN