Ayala, Yuchengco companies make headway in renewable energy projects

The power platforms of the Ayala and Yuchengco groups have made significant strides in the development of renewable energy projects here and overseas.

In a disclosure, Ayala Corp.’s ACEN said the construction of the 400-megawatt (MW) Stubbo Solar project in Australia had commenced after making a final investment decision.

ACEN, through subsidiary ACEN Australia Pty Ltd., signed the connection agreement with Australia-based infrastructure and energy services provider Lumea Pty Ltd. and executed a photovoltaic (PV) module supply contract this week.

The finalization and signing of the connection agreement with Lumea, it said, marked a “major step” in moving to this committed stage. The notice to proceed for the road works was issued last week.

“ACEN Australia is pleased to kick off the construction of the Stubbo solar farm. This will be ACEN Australia’s second 400 MW (520 MWdc) solar farm following the construction of New England Solar which is currently being commissioned.

The company earlier committed to invest 800 million Australian dollars or about P30 billion for the solar project located within the Central-West Orana Renewable Energy Zone in the Mid-Western Regional Council region.

The Stubbo project, which will connect to the existing 330 kV network between Wollar and Wellington, will produce clean energy for more than 185,000 average Australian homes.

It also has a provision for a 200 megawatt-hour battery energy storage system, allowing for the project to later on be adapted to dispatch energy when it is most needed during peak hours and provide important grid stability services.

“It was good to work with Lumea to achieve this major milestone and confirm the connection of Stubbo Solar to the 330 kV (kiloVolt) Transgrid network. The ability to get the connection agreement done illustrates the value of ACEN Australia’s strategy of connecting into secure and robust parts of the Transgrid Network,” ACEN Australia CEO Anton Rohner said.

Lumea CEO Richard Lowe said the Stubbo Solar project “is an important milestone in the transition to a cleaner grid and delivering cheaper energy to regional areas for the future.”

ACEN Australia has more than 1.5 GW of projects under construction or at an advanced stage of development, including the New England Solar, New England Battery, Stubbo Solar and Valley of the Winds projects in the NSW New England and Central-West Orana Renewable Energy Zones, as well as the Robbins Island and Jim’s Plain Wind project in North-West Tasmania.

In the meantime, PetroGreen Energy Corp. (PGEC), Yuchengco-held PetroEnergy Resources Corp.’s (PERC) renewable energy arm, is teaming up with Denmark-based Copenhagen Energy (CE) to undertake various offshore wind power projects in the pipeline.

PERC announced in a regulatory filing the creation of three separate special purpose vehicles that shall oversee the development of these projects with an aggregate potential capacity of about 4 gigawatts (GW).
It said PGEC and CE signed incorporation documents for Buhawind Energy Northern Luzon, Buhawind Energy Northern Mindoro and Buhawind Energy East Panay last Nov. 4.

“He (Energy Secretary Raphael Lotilla) particularly stressed that offshore wind will be a significant pillar in the country’s transition to clean energy fuel adding that it will provide a climate-friendly power source as a replacement to conventional and aging power plants,” Francisco Delfin Jr., PGEC vice president and COO, said.

Incorporated in 2020, CE is a Danish energy trading and developer of solar, onshore wind and offshore wind projects. It has an offshore wind pipeline of more than 28 GW spanning projects across Denmark, Australia, Ireland, Italy and the Philippines.

“Aside from private investments, Denmark is also exploring ways to cooperate with the Philippine government to remove barriers to commercial offshore wind development through assistance or institutional knowledge sharing in grid planning and reinforcements, environmental monitoring, and other related experiences,” said Danish Ambassador to the Philippines Franz-Michael Skjold Mellbin.

PGEC is one of the companies that bagged government contracts from the Department of Energy to construct offshore wind power projects.

These include the 2,000-megawatt (MW) Northern Luzon Offshore Wind Power Project in Ilocos Norte, the San Vicente Wind Power Project in Palawan and the 500-MW East Panay Offshore Wind Power Project situated in Iloilo and Guimaras. All these are in the pre-development stage.

Details of these offshore wind projects including the project cost and timeline are not divulged.
Established in 2010, PGEC operates five power stations using geothermal, wind and solar energy such as the 32-MW Maibarara geothermal power plant in Batangas, the 36-MW Nabas-1 wind project in Nabas and Malay, Aklan and the 70-MW Tarlac solar project in Tarlac City.

It recently began working on the 27-MW Dagohoy Solar Power Project that will rise in a 22-hectare site in Bohol, which is expected to launch commercial operations by the fourth quarter of 2024 at the earliest.
Still in the Philippines, ACEN completed divesting its equity stake in the 246-megawatt coal-fired power plant in Batangas.

In a separate disclosure, ACEN said it fully divested the South Luzon Thermal Energy Corp. (SLTEC), operator of the circulating fluidized bed thermal power plant in Calaca town, via the energy transition mechanism (ETM) transaction.

As explained by the company, the ETM “aims to leverage low-cost and long-term funding geared towards early coal retirement and the reinvestment of proceeds to enable renewable energy projects.”

The transaction was valued at P17.4 billion. Of which, P7.2 billion shall be reinvested in ACEN’s renewable projects while the remainder was used for refinancing debt and transaction fees.
Bank of the Philippine Islands and Rizal Commercial Banking Corp. provided P13.7 billion in debt financing. Also, state-run Government Service Insurance System, The Insular Life Assurance Co. Ltd. and ETM Philippines Holdings Inc. infused P3.7 billion in equity investments.

With the deal sealed, this would enable the early retirement of the coal plant as its operating life of up to 50 years will be reduced in half, as well as help avoid or reduce up to 50 million metric tons of carbon emissions.

This also brings ACEN closer to becoming a 100-percent RE platform by 2025 and its aspiration of 20 GW of renewables capacity by 2030.

“As the company has successfully divested its coal asset, ACEN commits to a just energy transition. We have established mechanisms to ensure that stakeholder interests, especially those of the people and communities of SLTEC, are effectively addressed,” said ACEN president and CEO Eric Francia.

AlphaPrimus Advisors and BPI Capital Corp. served as financial advisors to the transaction. CLSA Philippines was the lead arranger for the equity placements, while BPI Capital and RCBC Capital Corp. acted in the same capacity for the SLTEC debt financing.