By Lenie Lectura |Business Mirror
The Meralco PowerGen Corp. (MGen) has been cleared by the local government to partially resume work on its P4.25-billion solar power project in Bulacan.
“We have been given partial authority to restart work there because we wanted to do advance works on the drainage of the site so that when the rains come, we will just be ready to mount the panels,” said MGen President Rogelio Singson.
PowerSource First Bulacan Solar Inc. (PFBSI) is the project proponent. It is 40-percent owned by MGEN Renewable Energy Inc. (MGreen), 36 percent held by PowerSource Global Holdings Corporation and 24 percent by Singapore’s Sunseap International Pte. Ltd.
MGreen is the renewable energy subsidiary of MGen. It has tapped SUMEC Complete Equipment & Engineering Co. Ltd. to construct the solar facility in Bulacan.
In February, Singson said the 50-megawatt (MW) Bulacan solar power project experienced a delay in the delivery of the PV panels from China brought about by the coronavirus disease 2019 (Covid-19).
“Unfortunately, there are two projects that we are supposed to be already on COD [commercial operation date] this year.
First is the one in Bulacan with Power Source. Unfortunately, because of the lockdown and because our EPC [engineering, procurement and construction] contractor here is from China, the delivery of solar panels have been delayed,” said Singson.
The other project experiencing delay in the delivery of solar panels is in Tarlac.
Despite the setback, MGen is still committed to achieve its target renewable energy portfolio of 1,000MW over the next 5 to 7 years. The focus is on the development of a portfolio of utility scale solar, wind and hydro-power projects to supply Luzon grid and electricity consumers with competitive tariff.
MGreen recently secured an equity funding amounting to P424 million from Meralco that will be invested in various solar projects.
The power to be produced from PFBSI will be sold to Meralco under an approved 20-year power supply agreement (PSA) for P4.69 per kilowatt hour (kWh), subject to a 2-percent annual escalation.
The rate, the Energy Regulatory Commission (ERC) has said, is “reasonable” because the PSA underwent the competitive selection process (CSP).
Even with the application of the 2-percent annual escalation, the rate of P4.69 per kWh is “still significantly lower than the prevailing feed-in-tariff [FiT] rate and most of the approved rates for solar power plants.”
From P4.69 per kWh, the rate will go up to P5.7516 per kWh on the 20th year. The ERC said this is still lower than the prevailing FiT rate of P8.69 per kWh for solar.
The 20-year term of the PSA will not be extended, the ERC said.