ACEN Corp. said subsidiary ENEX Energy Corp. is keen on the development of a 1,100 megawatts (MW) gas-fired power plant in Batangas.
ENEX has a 50 percent economic interest in Batangas Clean Energy for the development of the natural gas-fired power plant with the other 50 percent interest held by Singapore-based Gen X Energy which is owned by American private equity firm Blackstone.
“We have a joint venture which is a 1,100 MW gas-fired plant that’s under development in Batangas. That’s in very advanced stages of development and we believe it can participate in the upcoming CSP (competitive selection process) of Meralco (Manila Electric Co.) for instance,” said Eric Francia, ENEX chairman, in a briefing last week.
“…ENEX will have to source, together with its partner, for the capital once the project gets to financial close. We are not yet in financial close. We would like the project to win a long-term contract. It is very risky to invest in a merchant, uncontracted gas power plant,” said Francia, president and chief executive officer of ACEN.
Francia said the gas-fired power plant would also need a contract with “a reasonable pass-through mechanism” given the volatility of fuel prices.
He added funding of the project will come from various sources “notwithstanding the fact that ACEN will not be the source of construction equity.”
“We would like nevertheless for the project to succeed. We will exert all efforts to make sure the project gets fully funded and that would be the role of ENEX to play and we have various options,” Francia said.
Francia said the country needs additional reliable baseload capacity which can be supplied by gas-fired power plants because of the moratorium on new coal-fired power projects.
ACEN said the policy affected the viability of financing those that were allowed to be pursued before the moratorium took effect.
It added ever increasing power demand can ideally be addressed by a combination of RE projects, energy storage and new gas-fired power plants.
