Citicore Power — which is affiliated with Megawide Construction — has said it is willing to supply electricity to the Manila-based utility from three PV projects it operates in the Philippines. According to rules on the competitive selection process under the Department of Energy and the Energy Regulatory Commission (ERC), Meralco is expected to give solar developers the opportunity to offer PV-generated electricity at a better price.
Prospective power suppliers will be expected to provide electricity for a period of 20 years, Meralco said in an online statement. All eligible solar arrays must be contracted and certified by the national government. Projects should be owned and operated by the companies submitting competing price offers, with accompanying financial proposals due for submission to Meralco by the middle of August. Developers were also expected to formally submit an expression of interest to Meralco, in addition to a non-refundable fee of PHP 100,000 ($2,000).
Citicore Power has already beaten an offer by PowerSource First Bulacan Solar with its PHP 3.50/kWh rate. Meanwhile, Solar Philippines — which recently announced plans to build 1 GW of solar capacity by next year — is waiting for the ERC to give it the green light to supply power to Meralco from 50 MW of PV capacity, at a rate of PHP 5.49/kWh. Separately, Meralco is also waiting to finalize an agreement to source 50 MW of solar from PowerSource First Bulacan Solar at PHP 4.69/kWh.
Citicore Power based its proposed rate of PHP 3.50/kWh on the current state of competition in the Philippines and the direction of government policy. In early 2016, it completed its first solar project — a 25 MW installation — in Silay, Negros Occidental province. Around the same time, it connected another 18 MW to the grid in Mariveles, Bataan province. Last week, it finished a 60 MW solar project in Toledo, Cebu province. The ERC granted certificates of compliance to Citicore in July for its PV projects in Bataan and Cebu.
At the beginning of this year, Meralco started Spectrum, a rooftop and utility-scale solar development subsidiary. It started by building a 1.87 MW rooftop project for Robinsons Malls in the national capital and aims to build a PV portfolio of 300 MW over the next five years.
A number of large-scale solar projects are currently being developed throughout the Philippines. In March, for example, the Department of Energy agreed to back the construction of a 150 MW project in Concepcion, Tarlac province.
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It needs to be said that this portfolio is already operating sind 2016 and did not receive FiT. Therefore we talk about excess capacity that had received remuneration from WESM so far. Given that current market levels in WESM are quite low this deal is a win-win for Citicore improving their cash flows while for Meralco this is far below real market prices. This is not comparable to new generation projects to come – just yet.