Meralco PowerGen Corp. (MGen) plans to convert its two stranded coal plants in Zambales and La Union into gas-fired facilities, according to an executive.
MGen Gas Energy Holdings Inc. president and chief executive Yari Miralao said these assets include Redondo Peninsula (RP) Energy Inc. in Subic, Zambales and Global Luzon Energy Development Corp. (GLEDC) in La Union.
“If you are MGen, you’re sitting on two-stranded assets that are incurring running costs that are designed as coal plants that you know will never be coal plants anymore. So, the most prudent thing to do is not necessarily to double down, but sprinkle it with a little more love to just convert these things into gas plants, for your pipeline,” said Miralao.
RP Energy has been planning to develop a 660-megawatt (MW) coal-fired power project in Redondo Peninsula, Subic for over a decade, but construction and power supply agreement issues hampered its development.
GLEDC was also previously looking at developing a 670-MW coal-fired power plant in Luna, La Union, but failed to get a PSA. GLEDC is under MGen subsidiary Global Business Power Corp.
“Both are subject to the coal moratorium and can no longer be coal plants…So I think the natural progression on these things is to convert these into gas plants,” Miralao said.
He said gas investments require economies of scale, which means consolidation of market participants to mitigate investment risk.
“If we have established Batangas, the next thing to do is to move north and to move south and start replacing coal or replacing the diesel with gas,” Miralao said, referring to the company’s investment in gas plants in Batangas province.
MGen, the power arm of the country’s biggest power retailer Manila Electric Co., announced it is acquiring a 60-percent interest in Chromite Gas Holdings (CGHI).
CGHI intends to invest in two gas-fired power plants owned by San Miguel Global Power Holdings Corp. (SMGP). These are the 1,278-MW Ilijan power plant, and a new 1,320-MW combined cycle power facility under Excellent Energy Resources Inc, that is under construction.
CHGI, together with SMGP, will also invest in the LNG import and regasification terminal in Batangas owned by Linseed Field Corp.
The transaction is pending approval by the Philippine Competition Commission.
