Razon firm to supply Meralco with clean energy for 20 years

By Jordeene B. Lagare@jordeenelagare

October 28, 2022 12:00:00

A unit under tycoon Enrique Razon Jr.'s Prime Infrastructure Capital Inc. clinched a 20-year deal to supply clean energy to power distributor Manila Electric Co. (Meralco).

Terra Solar Philippines Inc. of Prime Infra-led Terra Renewables Holdings Inc. signed a power supply agreement with Meralco for the delivery of 850 megawatts of mid-merit supply, or power that will be injected into the system when the baseload or main facilities fluctuate.

Power sold to Meralco will be priced at P5.80 per kilowatt-hour, which is based on the average cost of developing Terra's facilities.

"The rate for this renewable energy supply offer is very competitive and lower than fossil-powered generation plants, especially at this time when fuel prices are skyrocketing. This PSA between Meralco and Terra Solar is very strategic as we ensure availability of adequate and cost-competitive power for our more than 7.5 million customers in the coming years," said Jose Ronald Valles, Meralco first vice president and head of regulatory management.

Prime Infra said the supply would address the electricity needs of 1.55 million houses annually or an average of 200 kWh per month. It said it would also displace an annual consumption of approximately 1.4 million tons of coal or 930 million liters of oil.

"This contract with Meralco is our response to help meet the increasing demand for power through a more cost-efficient and sustainable manner. We applaud Meralco for its drive to decarbonize the energy industry and ensure reliable quality power supply to support its customers," said Razon, chair of Prime Infra.

Terra Solar is expected to deliver 600 MW of power supply by Feb. 26, 2026 and the additional 250 MW by Feb. 26, 2027.

The supply agreement will still be subject to the approval of the Energy Regulatory Commission.

Terra Solar is a P200-billion joint venture between Prime Infra and Leandro Leviste's Solar Philippines Power Project Holdings Inc.

It is constructing a solar farm project, a combination of 2,500 to 3,500 MW solar photovoltaic system and approximately 4,000-megawatt hours to 4,500 MWh energy storage.

"As a company pursuing economically critical and socially relevant infrastructure, Prime Infra is committed to do its part in accelerating the clean energy transition and strengthening the country's energy security," Terra Renewables president and CEO Guillaume Lucci said. INQ