THE Manila Electric Co. (Meralco) is thinking of contracting 300 megawatts (MW) of capacity that would mostly come from gas plants.
“I think for our baseload, we are sort of already contracted. We are in discussions for our mid-merit for gas,” Meralco President Oscar Reyes said.
Mid-merit plants supply the gap between base-load and peaking plants, which operate during peak hours. Mid-merit demand often comes from natural gas.
Reyes said the utility firm is still in the process of reviewing its power-capacity requirements, but, initially, it would be “300 MW plus or minus.”
A power supply agreement (PSA) would have to be entered into between Meralco and a power supplier. Reyes said a PSA would be finalized in the first half of the year.
He did not identify which power supplier Meralco is in talks with for the additional 300 MW, but the country’s gas plants are owned and operated by First Gen Corp. of the Lopez group.
The additional power-generating capacity would give Meralco the flexibility to optimize sourcing of power due to the expected high demand and the scheduled maintenance shutdowns of its contracted generating units, as well as possible occurrences of forced plant outage.
Meralco needs to source additional capacity to also mitigate its exposure to the Wholesale Electricity Market (WESM).
WESM is the country’s trading floor of electricity, where distributors are exposed to volatile prices as demand and supply drive power costs.