The Manila Electric Co. (MERALCO) has inked 100 megawatts (MW) of solar power to diversify their power supply and bring down electricity rates in their areas.
The company has signed contracts for 50 MW with Solar Philippines Tanaunan Corp and PowerSource First Bulacan Inc., The two contracts are the first renewable energy contracts of Meralco, said senior vice president and utility economics head Larry Fernandez in an interview with The Philippine Star.
The two solar companies offered a price of P5.39 per kilowatt-hour (kWh) for a 20 year period. The offer is lower than the solar FIT rate at P8.69 per kWh.
“That was included in the proposed supply of electricity of the power plant developers. Solar technology came to the point where costs have become cheaper,” Fernandez said.
He added that the contracts are “timely,” since the offers coincided with the second round of FIT for solar projects in March.
25 MW will come from Solar Philippines’ farms in Tanauan, Batangas and Naic, Cavite which are expected to be completed in February and April of next year. While PowerSource is developing a 50 MW solar farm in San Jose del Monte, Bulacan scheduled for operation in August 2018.
John Morris, managing director of the International Energy Consultants (IEC) said that the priced offered by the solar companies is quite competitive for the power supplied to the overall market.
He added that having RE in Meralco’s portfolio will shield it from coal prices and foreign exchange.
However, the supply offers are still subject to price challenges and regulatory approvals.
Meralco currently has contracts of 1,500 MW with First Gas plants and 400 WM with the Quezon Coal Power Plant.