Manila Electric Co., the Philippines’ biggest power distributor, is planning to build power plants in neighboring countries such as Myanmar, Vietnam and Thailand as it moves to expand its power-generation business abroad.
In a recent briefing, Meralco chair Manuel V. Pangilinan noted that there was nothing definite in their plans yet at this stage, but they have already seen some “interesting opportunities” as these countries were currently considering to put new power facilities.
“We’re checking opportunities in Thailand. The good thing there is that the fuel source is supplied by the government through PTT. And generally, I’m not saying in all instances, you are given an offtake [agreement] for the power produced. The returns are not high because you are protected on both ends—on the fuel source and on the offtake. So your risks are basically execution on building the plant,” Pangilinan explained.
“In Vietnam, our impression is that you are given an offtake [agreement] by the government through its power company, EVN (Electricity of Vietnam). So the fuel is up to you to source. It’s a different model for each country,” he pointed out.
Pangilinan did not disclose the fuel type of the planned power-generation facilities, except to say that they were considering natural gas-fed power plants as an option.
Pangilinan earlier said that in Vietnam, Meralco was looking at projects that would range anywhere from a minimum of 150 megawatts (MW) to 600 MW. Preferably, the distribution utility would want to have a “significant minority interest” in the partnerships that might be formed with prospective Vietnamese partners.
“Why minority? We don’t have first-hand experience on how business operates in Vietnam, especially in the regulatory aspect. So it’s better to take certain baby steps first,” Pangilinan had said.
Meralco president and CEO Oscar S. Reyes had said that Meralco was looking at potential projects even outside the Philippines to enhance the company’s profitability and showcase the technical competency of its engineers, technical and customer service people.
Locally, Meralco, through its power-generation arm Meralco PowerGen, is building a 2,700-MW portfolio that will consist of 1,200 MW of coal-fired facilities and liquefied natural gas-fed power plants.
The first 600-MW coal facility is being put up at the Subic Bay Freeport in partnership with Aboitiz Power Corp. and Taiwan Cogeneration, through a vehicle company called Redondo Peninsula Energy (RP Energy).
The $1.28-billion Subic facility is Meralco’s initial venture in its reentry to the power-generation business. Development activities are continuing as the company hopes to operate the first 300-MW plant by the first half of 2016.
As for its LNG plans, Meralco earlier said that it was considering two locations—Quezon and Batangas.