First Gen Corp.’s newest hydroelectric power asset is key to expanding the Lopez-led firm’s renewable energy (RE) portfolio, company officials said last week.
Fresh River Lakes Corp. (FRLC), a subsidiary of First Gen, won in the recent competitive bidding of the 165-megawatt (MW) Casecnan Hydroelectric Power Plant (CHEPP).
First Gen President Francis Giles Puno said CHEPP is “an important asset” that would be tied up to its 2 existing hydro assets—the 132MW Pantabangan-Masiway and the 120MW Aya pumped-storage hydro—which are all in Pantabangan, Nueva Ecija.
“Right now, when you look at Casecnan, fundamentally it’s a very important asset for us because we obviously have Pantabangan-Masiway there. We have the plans for project Aya, which is there. So we really needed to make sure that the reservoir is controlled by First Gen,” said Puno.
“Casecnan is upstream and to the extent that we could supplement even more supply coming from the upstream side of Casecnan, then that will help Pantabangan-Masiway and project Aya. It also enables us to build out solar and wind as well because those are also intermittent. If we add it up, we create an RE portfolio.”
The Aya pumped-storage hydro power project is scheduled to start construction in the third quarter. The project will supply ancillary services to the grid and is designed to pump water from its reservoir to its upper reservoir for storage when there is excess electricity at low cost. The stored water is then released back to the lower reservoir to generate electricity when demand increases.
First Gen Chairman Federico R. Lopez said all RE assets are key to achieving a decarbonized energy system.
“We’re quite encouraged with the way we’ve shift the portfolio, including the purchase of Casecnan. Assets like that are very hard to replicate and they’re all in tune to where the world is headed with regards to a decarbonized energy system,” he said.
“These are very important assets for us to come and as they come together, the synergies also become stronger and the ability to run it as a complex.”
FRLC’s bid offer of $526 million surpassed the $227.27 million minimum bid price for CHEPP set by the Power Sector Assets and Liabilities Management Corp. (PSALM).
“The successful privatization of this crucial power plant represents a significant milestone in our efforts to strengthen energy security. With the private sector injecting the necessary efficiency and capital for energy expansion, we can ensure a reliable and resilient energy sector for our nation’s future,” Energy Secretary Raphael Perpetuo Lotilla said.
Initially, 8 bidders were qualified to participate in the bid opening and preliminary evaluation process.
The CHEPP is a run-of-river type of power facility with limited impounding in Barangay Villarica, Pantabangan, Nueva Ecija. Following the conclusion of the build-operate-transfer agreement between the California Energy (CE) Casecnan Water and Energy Co. Inc., and the National Irrigation Administration (NIA) in December 2021, the management of CHEPP was transferred to the government. PSALM and NIA share ownership of the plant on a 60 percent and 40 percent arrangement, respectively.