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SMC offers Meralco Ilijan plant at minimal tariff to help stabilize power supply, lower energy bills 

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San Miguel Corporation (SMC) power unit San Miguel Global Power (SMGP) has offered to make the full capacity of its Ilijan Natural Gas available to Meralco for a fraction of its capital cost to help keep electricity prices as low as possible for consumers, while ensuring steady supply of power in the coming months. 

SMC president Ramon S. Ang said that the offer, covering the full 1,200 megawatts capacity of the plant that historically accounted for 10-12% of Luzon’s net dependable capacity, will only cost Meralco a minimal P1.00/kwh in capital recovery fee, or half of its capital cost on the facility.  

Essentially, this will mean that the incremental power supply costs from such capacity for households may be cut down significantly compared to prevailing costs from coal power generation.  

Ang said that SMGP, through subsidiary South Premiere Power Corp. (SPPC), has already had initial discussions with Meralco, as both firms are committed to help consumers weather rising commodity prices, including that of power. 

“As we have said in the past, we will continue to look for ways to help make sure consumers will still have some protection from the effects of skyrocketing global fuel prices. This is one of the best and most direct ways we can show solidarity with our people in this time of crisis,” said Ang. 

“Because of unforeseen global events such as the Russia-Ukraine war, fuel prices are at unprecedented highs, and supply is tight. We are in a crisis and this is a shared burden by all Filipinos—power consumers, the power sector, government. By immediately foregoing returns, we continue to carry our share of the burden, while getting just enough to make sure plant operations continue and remain sustainable,” Ang added.  

Currently, the Ilijan facility is on extended outage following the refusal of Shell Philippines Exploration BV (SPEX) to supply the 70 petajoules (PJ) in banked gas from Malampaya, that SPPC acquired from PNOC in June 2022. In the meantime, it is conducting repair works on the power plant to improve its fuel efficiency and generation ramp rate.  

The original gas supply agreement of the Ilijan Plant with Malampaya also expired last June 2022.  

Ang said that in order to help address fuel constraints, it is also offering to help source the fuel for the Ilijan facility —whether from its own allocation of Malampaya gas or liquid fuel — which Meralco will pay for.  

Ang said that SMC Global is also willing to work with Meralco in using its 70 PJ banked gas acquired from PNOC at a cost much lower than the prevailing cost of coal power generation. 

This, he said, would give Meralco the flexibility to manage its overall power generation costs, and ensure adequate power supply. 

Earlier, the Department of Energy said it expects a massive power supply deficit in Luzon, unless the Ilijan power plant is reactivated as part of the energy mix.  

Ang said the company also expects the completion of an LNG terminal facility it has tolled by March 2023, according to most recent construction updates. 

The company contracted the facility to receive, store, and re-gassify commercial LNG, but pandemic restrictions and the Russia-Ukraine war delayed the project.  

The Philippine is currently making a push for more gas power generation capacity, as it is considered a “bridge fuel” to wider adoption of renewable power. 

It has a significantly lower carbon footprint than coal power generation. 

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