Leading sugar firm Victorias Milling Corp. expects to switch on before the end of this year a P2-billion 40-megawatt biomass power generation plant that will cover the electricity requirements of the sugar conglomerate and sell the excess to the national grid.
The co-generation plant will be operational by the third or fourth quarter of this year, LT Group Inc. president Michael Tan said in a press briefing after LTG’s stockholders meeting yesterday.
LTG is the single biggest investor in VMC with a stake of about 30 percent.
“This will allow us to lower our electricity cost and export 25MW to the grid,” Tan said.
The remaining 15MW output of the plant, which was built under a turnkey contract, will be used by VMC. Construction is expected to take 18 months.
“Since the FIT (feed-in tariff) is not fully taken up yet for biomass, we should qualify for that,” Tan said.
FIT is deemed crucial in boosting the local renewable energy industry as this will provide developers an incentive to build new capacity with the assurance of fixed cash flow for the next two decades.
Tan said VMC’s upcoming co-generation plant would employ newer technology and more efficient turbines.
The co-generation plant is under VMC’s subsidiary, Victorias Green Energy Corp., which was given 2.9-hectares of VMC’s facility in Victorias City, Negros Occidental. This unit was set up in 2015 to undertake power-related projects.
VMC amended its bylaws years ago to make room for diversification into allied businesses to strengthen operations in view of a low-tariff regime under the Asean Free Trade Area. For a purely commodities company like VMC, diversification into power co-generation is seen as a natural step to help stabilize demand for sugar. —DORIS DUMLAO-ABADILLA