By Sean Rafio and Francis Allan L. Angelo
Ilonggo consumers will benefit from the plan of business tycoon Enrique Razon Jr. to build the world’s largest solar power facility in a bid to boost the renewable energy supply in the Philippines.
In a statement, Razon’s infrastructure firm Prime Infrastructure Holdings Inc. (Prime Infra) said the solar power facility will have a capacity of 2,500 megawatts (MW) to 3,500MW and a battery energy storage system (BESS) capacity of 4,000-megawatt hour (MWh) to 4,500MWh.
Razon also owns MORE Electric and Power Corp., the sole power distributor in Iloilo City, and International Container Terminal Services, Inc., among others.
Meanwhile, Terra Solar Philippines, a unit of Prime Infra’s subsidiary Terra Renewables Holdings Inc., will develop the project with Solar Philippines Power Project Holdings, Inc., led by Leandro Leviste.
Terra Solar negotiated a 20-year power supply agreement with Meralco, following the Department of Energy’s mandate of Renewable Portfolio Standards, which requires companies to source a minimum percentage of their energy portfolio from renewable energy sources.
As per the company’s projection, it will be able to supply a total of 850 MW for Meralco, which could decrease a total of 1.4 million tons of coal or 930,000 liters of oil in annual consumption in order to generate electricity. This, Terra Solar said, will reduce emissions of greenhouse gas and the country’s dependency on fuel imports from 2026 to 2046.
“We, at Prime Infra, are delighted to move forward with Meralco on this record-breaking project that highlights solar power’s important contribution to strengthening the country’s energy security — solar, which is normally looked at for peaking, is now being made available by Terra Solar to answer Meralco’s mid-merit requirement, thereby addressing both the need for additional capacity and compliance with Renewable Portfolio Standards,” said Guillaume Lucci, president and CEO of Prime Infra.
“Prime Infra finds a sweet spot to pursue solar as we take advantage of the steep decline in installation costs over the past decade and the improved battery energy storage system technology that allows us to build an economically critical and socially relevant infrastructure at a scale the world has never seen before,” said Lucci.
In a statement, MORE Power President and Chief Operating Officer Roel Z. Castro said Prime Infra’s solar power project will benefit Ilonggo power consumers as it will help cushion the effects of inflation on fuel prices and even the electricity industry.
Castro noted that the surge in petroleum prices also jacked up prices of coal and diesel which are the staple fuel in electricity generation.
According to the US Energy Information Administration, the largest share of total primary energy consumption in the Philippines was petroleum and other liquids (45%), followed by coal (36%), natural gas (7%), non-hydropower renewables (7%), and hydroelectricity (4%).
The price of coal in the world market has soared by more than 300 percent, primarily because of the Russia-Ukraine war which has curtailed global oil supply.
The NewCastle Index, which is the basis for the global coal prices, indicated that prices of coal began spiraling amid the pandemic in 2021 and was exacerbated by the Ukraine invasion.
Russia, which accounts for 10 percent of the world’s oil production, has been subjected to economic sanctions, including oil and natural gas embargoes, after it invaded Ukraine early this year.
From US$93.30 per metric ton (MT) in April 2021, coal prices soared to US$428/MT in May 2022, or a 358.7 percent spike.
The latest index indicated that coal is now priced at US$383.50/MT, which is still a 311 percent increase from the April 2021 index.
MORE Power recently concluded its competitive selection process and signed supply agreements with several power generators, some of which are coal-based.
“With oil and coal prices going up because of global inflation and the crisis in Europe, this massive solar power project by Prime Infra will cushion and even shield MORE Power consumers from possible rate increases in the future. This is part of our innovative and strategic moves to maintain affordable, stable, and sustainable service to our consumers,” Castro said.
