Manila Electric Co. (Meralco) said it will defend its stand with the Department of Energy (DOE) to not allow mixing bids from existing power plants and greenfield power plants for the second round of competitive selection process (CSP) that it will conduct for 1,200 megawatts (MW) of capacity.
Ray Espinosa, Meralco president and chief executive officer, said there are financial and economic differences between brownfield and greenfield power plants.
According to Espinosa, power supply agreements (PSAs) that are awarded for greenfield power plants are usually 20-year contracts while existing power plants’ PSAs typically last from five to 10 years only.
“It is our intention to clarify with the DOE to maintain this dichotomy…to provide incentive to build new plants,” he said, adding the company hopes it can proceed with the publication of a CSP for another 1,200 MW within the week.
Meralco expressed optimism the second round of CSP for 1,200 MW of greenfield projects will no longer fail after relaxing some requirements, including allowing power plants with a minimum block configuration of 150 megawatts (MW) per unit compared to the previous 600 MW per unit.
Likewise, Meralco is now open to allow bidders for capacities that will come from power plants in multiple, different locations. However, only a single developer will be selected to supply the entire 1,200 MW.
“What we’re emphasizing with the DOE is, all of the comments we have received from the prospective bidders from the pre-bidding conference and even after the bidding conference when the contracts were awarded finally to the very same generators who are interested to bid, have been addressed by us,” Espinosa said.
Last month, Meralco secured a total of 1,700 MW worth of electricity supply via CSP that will be utilized starting December 26.