AC Energy, the energy platform of conglomerate Ayala Corp., said it has resumed operations and its business is back on track even as it continues to grapple with the economic fallout from the Covid-19 pandemic.
“We took a pause when the crisis hit but now we are back on track. We are investing. We are very thankful that government is [striking a balance] between health and economic crisis and things are moving,” said AC Energy President Eric Francia during a Standard Chartered Asean country webinar titled “Philippine Investment Forum-The Rising Tiger of Asia.”
Francia joined the panel with other industry leaders who shared their insights on how businesses can sustain growth in the Philippines through the Covid-19 crisis.
He said AC Energy shifted investments to renewable energy (RE) because there were already many coal and gas investments in the country in the last decade.
“We needed time for all that capacity to be absorbed so we thought with the shift in renewables and the opening up of regional markets we thought it would be a good time to expand,” said Francia.
The company also decided to focus on overseas RE opportunities. “We decided to step out of the Philippines and invest in the region. We expanded in Indonesia, Vietnam and recently in India and soon in Australia. We also have a small investment in Myanmar.”
“It’s good to have this regional diversified portfolio to allow us to invest. We think that it bodes well for us in terms of the diversification that we’ve done in the past few years. It makes our portfolio relatively balanced and it gives us the confidence.”
The power firm’s RE capacity is now at 1,300 megawatts (MW), 500MW of which is in the Philippines and 800MW in the regional markets.
It has lined up 330MW of RE and complementary peaking diesel power project, plus it expects to start another 150MW of diesel power facility in Pililla, Rizal, soon.
“There’s a strong liquidity in the market not only in the Philippines, thanks to the policies of the central bank, but also across the region. We’ve seen a string of capital raising from Philippine corporates. We’ve been very active in the debt capital markets as well. And we’ve begun to take some of that capital back to the country,” he said.
Francia is confident that RE investments is critical for the country to recover from the pandemic, citing the benefits of RE over fossil and thermal plants.
He said the advantage of renewables over large thermal plants is that a company does not need to make binary investments.
“For fossil fuel and thermal plants, you need to go big and building 300 to 600MW of machines is a large commitment. With renewables, it’s manageable in terms of size. We can build 100, 200, 300 MW with a $100 million plus as opposed to a billion dollars being committed at one time. So, I think there’s a lot advantages for renewables.”
“Obviously we are not on the purist extreme philosophy; we think there has to be a balance that’s why we are still open to thermal power. We are also looking at investments more as a complimentary technology, more as a transition fuel to complement renewables.”
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