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Meralco to procure additional power supply in next 2 years

Danessa Rivera - The Philippine Star
Meralco to procure additional power supply in next 2 years
In its Power Supply Procurement Plan 2021-2030 submitted to the Department of Energy, Meralco said it would subject to competitive selection process (CSP) a total of 3,850 MW starting this year until next year.
STAR / File

MANILA, Philippines — DanessaManila Electric Co. (Meralco) will procure nearly 4,000 megawatts (MW) of baseload and mid-merit supply in the next two years to meet its projected demand growth until 2049.

In its Power Supply Procurement Plan 2021-2030 submitted to the Department of Energy, Meralco said it would  subject to competitive selection process (CSP) a total of 3,850 MW starting this year until next year.

For baseload, the power distributor is looking to contract 1,000 MW in January 2022 for a 20-year power supply agreement (PSA) from March 2026 to February 2046.

It is also looking to procure 1,200 MW baseload power for January 2030 to December 2049.

For purely renewable energy (RE) contracts, Meralco is looking to bid out a total of 1,650 MW, broken down into 100-MW RE baseload and 850-MW mid-merit capacities in July this year, 500-MW mid-merit capacity in August this year, and 200-MW RE baseload in January 2022.

The 100-MW RE baseload capacity is targeted to start supplying in March 2023 until February 2043 and the 200-MW RE baseload from March 2025 to February 2045.

Meanwhile, the two mid-merit RE capacities are targeted to supply from March 2026 to February 2046.

Meralco is also looking to conduct an annual CSP for its peaking requirements from March to July, but has yet to set the capacity needed.

“The forecasted supply considered a capacity allocation for baseload, intermediate and peaking supply requirements that would result to a least cost generation cost for Meralco’s captive customers,” it said.

In 2025, three of its PSAs – a baseload supply from Quezon Power Philippines Ltd. and baseload and mid-merit supplies from First Gas Power Corp. – are set to end in May and August, respectively.

Meralco is also expecting two more PSAs – one baseload and mid-merit contracts with FGC Corp. – to end in October 2027.

The country’s largest power distributor is projecting peak demand to increase by 2.2 percent this year “as some businesses have reopened, albeit at limited capacity” and by an average 4.12 percent per year up to 2030 as economic activity resumes.

“It should be noted that the long-term forecast of the movement of peak demand will also be affected by how much renewable energy are introduced into the system; by the effectiveness of new energy efficiency measures put in place; and, by the changes in consumption behavior arising from the ‘new normal’ post-quarantine,” Meralco said.

From 2020-2030, the company also expects residential connections to grow at an average rate of four percent annually, commercial connections to rise at a yearly rate of 3.2 percent, and industrial customers to increase by 0.3 percent.

The residential segment would account for 48.1 percent of the total captive consumption by 2030, the commercial segment at 41.1 percent, and the industrial segment at 10.5 percent by 2030, Meralco said.

To shift its energy mix, Meralco is targeting to bid out 1,000 to 1,500 MW of RE generation in the next five years.

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