By Lenie Lectura | Business Mirror
Meralco PowerGen Corp. (MGen), the power generation arm of the Manila Electric Co. (Meralco), is expected to register a modest profit this year after its first power plant—a 500-megawatt (MW) supercritical coal-fired power plant—started commercial operation in September.
“There’s a modest impact in the fourth quarter alone because it started COD [commercial operation date] sometime end of September. So, [we were able to also ramp up] production. So, [it’s now] profitable for the fourth quarter [though it’s modest],” said Meralco Chairman Manuel V. Pangilinan.
The project proponent of the P56.2-billion power plant is San Buenaventura Power Ltd. Co. (SBPL), a partnership between MGen, with a 51-percent stake, and New Growth BV, a wholly-owned subsidiary of the Electricity Generating Co. of Thailand (Egco), the first independent power producer in Thailand.
The plant in Mauban, Quezon, utilizes a high-efficiency, low-emissions (HELE) coal technology, which can reduce carbon dioxide emissions and improve the efficiency of the power plant by producing more amount of energy with less coal.
It was built by the consortium of South Korea’s Daelim Industrial Co. Ltd. and Japan’s Mitsubishi Corp., which are both experienced engineering, procurement and construction contractors with very strong track records.
“And they get a bit of reimbursement from the contractor. So, on the whole, our share might be around more or less P500 million to P600 million. So, it will reduce the loss of MGen, [it’s just] small loss for the full year. So, next year [is when the] full impact [will really be felt],” said Pangilinan in a mix of English and Filipino.
MGen has a number of power projects lined up. Aside from coal plants, MGen targets around 1,000 MW of renewable-energy projects over the next five to seven years. The focus is on the development of a portfolio of utility scale solar, wind and hydro power projects to supply Luzon grid and electricity consumers with competitive tariff.
“MGen, taken as a whole, will be profitable next year. So, that’s good news,” said Pangilinan, adding that, “Meralco subsidiaries will do better next year.”
Aside from MGen, other Meralco subsidiaries are Clark Electric Distribution Corp., eSakay Inc., MSpectrum Inc.
As of the end of September, Meralco’s core net earnings grew 11 percent to P18.5 billion, while reported net income remained flat at P18.3 billion.
Pangilinan said last week that Meralco’s full-year profitability on core business will be north of P23 billion. “It is likely we will achieve the P23 billion plus core profit for full year 2019.”
The power utility giant reported a core net income of P22.4 billion last year, up 11 percent from 2017.
“We anticipate sustained growth for Meralco resulting from the country’s continued overall economic expansion, as well as growth that will follow the government’s ongoing infrastructure development programs,” Pangilinan said.