Solar producer offers to supply much lower electricity rates

Solar Philippines said it is challenging the offer of First NatGas Power Corp. for Manila Electric Co.’s 24/7 power supply that could reduce rates by up to 30 percent. 

Solar Philippines said in a statement it submitted an offer for 24-hour power at P2.99 per kilowatt hour in response to Meralco’s invitation for price challenge for an unsolicited offer by First NatGas Power Corp. covering the supply of 414 MW from the San Gabriel gas power plant. 

Solar Philippines said it would utilize solar energy and battery storage to supply consumers reliable, clean energy at a lower cost than gas.

The solar producer said that compared to Meralco’s average generation rate in the past three months of P 4.74/kWh, its proposed rate of P2.99/kWh would allow consumers to save more than 30 percent or an estimated P5 billion per annum.

Consumers may save even more compared to gas plants, such as FGP Corp.’s 500 MW, which in the past three months supplied power to Meralco at an average rate of P5.44/kWh inclusive of VAT.

Solar Philippines recently installed the nation’s first solar-battery micro-grid in Paluan, Occidental Mindoro, to provide 24/7 reliable power for an entire town at a cost lower than gas. 

The pioneering project features batteries from Tesla, the world’s leading electric vehicle manufacturer, and panels from the Solar Philippines factory. It aims to demonstrate the viability of solar and storage to offer Filipinos lower power cost than carbon dioxide-emitting natural gas.

Solar Philippines’ offer came after Meralco’s declaration of a failure of bidding in a competitive selection process where no company qualified to challenge the proposal of First NatGas Power Corp., in light of the CSP’s requirement that “the fuel for the generation of the price challenger must be the same as the original power supplier, which is natural gas.”

Meralco may now choose whether to re-bid this under the same terms, or amend the terms to allow other technologies to compete on the basis of cost.

“Meralco can save an average of 30 percent thanks to advances in solar and battery storage. But this goes beyond any single company or technology. WESM [Wholesale Electricity Spot Market] prices are at an all-time low, and new plants from companies like Aboitiz and San Miguel now offer consumers very low rates. Re-bidding this requirement in line with DOE’s technology- neutral policy will encourage competition and ensure consumers can enjoy significant savings,” Solar Philippines president Leandro Leviste said. 

Energy Secretary Alfonso Cusi declared the DoE policy that all power procurement should be “technology-neutral” and not favor any single supplier.  

The department stopped last year several CSP’s by electric cooperatives due to terms that limited bidders to specific technologies.

Senator Sherwin Gatchalian also filed “An Act Institutionalizing Reforms in the Procurement By Distribution Utilities of Supply for the Captive Market” which proposed the appointment of a third party auctioneer to administer the conduct of all CSP’s under standard terms of reference.

“The rules espoused by Secretary Cusi and Senator Gatchalian on the conduct of CSP’s will be one of the greatest steps ever taken to lower power rates in the Philippines. Large commercial and industrial customers already enjoy rates near P3/kWh under the Retail Competition and Open Access. If competition is opened to the widest field of players, residential customers would also enjoy such low costs, translating to P1,000 in savings per household per year,” Leviste said.

Reference:

Amojelar, D. G. (January 28, 2018). Solar producer offers to supply much lower electricity rates. Manila Standard. Retrieved from http://manilastandard.net/business/power-technology/257359/solar-producer-offers-to-supply-much-lower-electricity-rates.html

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