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Meralco: A Key Ally in Meeting Energy Demands for a Sustainable Future

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POWERING A BRIGHTER FUTURE. Meralco linecrews are hard at work to continuously enhance the electricity service it delivers to 7.8 million customers.

By Mhicole A. Moral

In the first quarter of 2024, the Philippines saw a significant increase in its gross domestic product (GDP) by 5.7%, with a yearly growth rate between 5 and 6%. This was mainly driven by public infrastructure developments and increased investments from the private sector. The escalating demand for energy has sparked power supply concerns due to the depleting natural gas reserves.

To power a sustainable energy future, the Philippines aims to further diversify its energy mix by increasing renewable energy share to 35% by 2030 and 50% by 2050.

Aligned with this goal are the efforts of Meralco, which services around 7.8 million customers—making it the largest power distributor in the country. The Manuel V. Pangilinan-led utility is relentless in securing cleaner and greener power supply to continuously meet the growing demand.

In the first quarter of the year, Meralco concluded a Competitive Selection Process for 15-year Power Supply Agreements (PSAs) covering 3,000 megawatts (MW) of baseload requirements in line with its approved Power Supply Procurement Plan.

Meralco has also entered into a 400-MW baseload interim power supply agreement, which will be effective until February 2025. The interim agreement serves as a temporary measure to ensure uninterrupted power supply while the long-term contracts are being finalized and approved.

Following this process, notices of award have been issued to the successful bidders. The resulting contracts are currently undergoing review and approval by the regulator before implementation. These developments ensure that the agreements meet the necessary standards and are in the best interest of its customers.

Meralco has also been investing heavily in the expansion and upgrading of its distribution network facilities. This includes the development of new substations as well as the upgrading of existing infrastructure to ensure that it can handle the increasing demand for electricity.

In line with their ongoing efforts to provide reliable and efficient service to its customers, as well as contribute to the development of the communities it serves, Meralco has successfully completed several projects in the first quarter of 2024.

One of the key projects successfully concluded by Meralco is the replacement of a 100 MVA Power Transformer in Taguig City. This initiative ensures a more stable electricity supply to support the residential, commercial, and industrial sectors in Taguig.

In Dasmariñas City, Cavite, Meralco installed a new 83 MVA power transformer at the Abubot Substation. This project is part of Meralco’s ongoing efforts to expand its capacity to meet the increasing power demand in rapidly growing urban areas. The new transformer will enhance the substation’s ability to deliver reliable power, thereby supporting the local economy and improving the quality of life for residents.

Another significant project was the uprating of the Pamplona-San Pedro 115 kV (kilovolt) line, which runs from Las Piñas City to San Pedro City in Laguna, accommodating higher power loads, reducing transmission losses, and ensuring a consistent supply of electricity.

BETTER SERVICE. Meralco recently energized the newly converted Malinta Substation in Valenzuela City to enhance electricity service reliability in the area.

Meralco also recently enhanced the reliability of the Malinta 115 kV Substation in Valenzuela City to prevent outages and ensure a steady power supply.

In line with government infrastructure projects, Meralco relocated a total of 299 poles to facilitate road widening initiatives by the Department of Public Works and Highways and local government units.

Meralco has also relocated 64 poles as part of the government’s Build Better More infrastructure program. This program aims to enhance the country’s infrastructure network, and Meralco’s involvement ensures that the power infrastructure is aligned with national development goals.

Ronnie L. Aperocho, Meralco’s Executive Vice-President and Chief Operating Officer, shared insights into the company’s recent performance, noting a significant increase in power demand across all customer segments.

“The growth in our first quarter sales volume reflects the growing demand for power from across all customer segments with the improving economic prospects,” he said.

“We remain vigilant as we work with energy industry players in implementing demand-side management programs to help lessen the strain on the power grid and continuously deliver stable and reliable service to consumers. We also continue to proactively encourage more participants to join the Interruptible Load Program (ILP), which embodies bayanihan among private sector players, as this proves to be valuable during this critical season,” Mr. Aperocho added.

Growth prospects

Meralco has been helping meet the country’s growing energy needs through its power generation arm, Meralco PowerGen Corp. (MGen), which has been strategically investing and developing key renewable energy projects.

Through MGen Renewable Energy, Inc. (MGreen), Meralco has made substantial investments in numerous renewable energy projects nationwide, such as solar farms in Ilocos Norte, Bulacan, and Rizal.

One of MGreen’s most notable projects is Terra Solar Philippines, Inc., which involves a 3.5-GWp solar power plant with a 4,500-MWhr battery energy storage system. The project is expected to be one of the world’s largest single-site solar farms in the Philippines.

To further grow its renewable energy portfolio, MGreen has started construction on two new solar plants: Greentech Solar Energy, Inc.’s 18.75 MWac solar plant in Bongabon, Nueva Ecija, and Greenergy for Global, Inc.’s 49 MWac solar farm in Cordon, Isabela. Both projects are scheduled to start commercial operations in the first quarter of 2025.

In addition to its renewable energy projects, Meralco is also investing in gas-fired power plants and liquefied natural gas (LNG) import and regasification terminal. The company has signed an agreement to acquire an attributable 40.2% interest in the country’s first and most expansive integrated LNG facility in Batangas. The facility includes two gas-fired power plants: the 1,278 MW Ilijan power plant and a new 1,320 MW combined cycle power facility, which is expected to start operations by the end of 2024. The transaction is subject to the customary review and approval of the Philippine Competition Commission.

In January, MGreen acquired additional shares in SPNEC, raising its stake to 53.7% from 50.5%. The company has invested a total of P18.4 billion in SPNEC. The issuance of the Notice-to-Proceed for the construction of the initial 2.5-GWp of the Terra Solar Philippines project is targeted before the end of 2024.

Mr. Pangilinan, Meralco’s Chairman and Chief Executive Officer, said the company’s dedication to supporting the Philippines’ economic development while enhancing the quality of life for its citizens.

“Our growth prospects go beyond creating value for our shareholders. The opportunities we are pursuing are always anchored on the commitment to support economic development and contribute to uplifting the lives and welfare of more Filipinos,” Mr. Pangilinan stated.

“As we continue to deliver stable and reliable service to our customers, we reiterate our pursuit to bring in projects of scale that will boost available generation capacity which we direly need to ensure not just the immediate, but the long-term energy security of the country,” he concluded.

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