POWERSOURCE First Bulacan Solar Inc. (PFBSI), which is partly owned by MGen Renewable Energy Inc. (MGreen), has tapped Sumec Complete Equipment & Engineering Co. Ltd. to construct a 50-megawatt (MW) solar power facility in San Miguel, Bulacan.
An engineering, procurement and construction contract for the solar power project was signed between the two firms last Friday.
MGreen holds a 40-percent interest in PFBSI. Other shareholders are PowerSource Global Holdings Corp. (36 percent) and Singapore’s Sunseap International Pte. Ltd. (24 percent).
MGreen is the renewable-energy subsidiary of Meralco PowerGen Corp., the power generation arm of Meralco. It plans to develop large-scale solar, wind and hydropower projects that will provide reliable, environment-friendly power at competitive prices without the need for subsidy.
The P4.25-billion Bulacan project is the company’s first solar investment, according to MGen President and CEO Rogelio L. Singson.
“We are committed to undertake 1,000 MW of renewable-energy projects in the next five to seven years. This start is one of the lego pieces that will make a thousand,” Singson said during the contract signing last week.
The power to be produced from PFBSI will be sold to Meralco under an approved 20-year power-supply agreement (PSA) for P4.69 per kilowatt hour (kWh), subject to 2-percent annual escalation.
The rate, the Energy Regulatory Commission (ERC) has said, is “reasonable” because the PSA underwent the competitive selection process. Even with the application of the 2-percent annual escalation, the rate of P4.69 per kWh is “still significantly lower than the prevailing feed-in-tariff [FiT] rate and most of the approved rates for solar power plants.”
From P4.69 per kWh, the rate will go up to P5.7516 per kWh on the 20th year. The ERC said this is still lower than the prevailing FiT rate of P8.69 per kWh for solar.
The ERC told Meralco it cannot pass on to consumers any additional charges due to interest rates or penalties imposed by PFBSI under the PSA. It, however, allowed Meralco to pass on to its consumers any benefit it availed of from excess energy of the PSA.
The 20-year term of the PSA will not be extended, the ERC said.