TeaM Energy open to Meralco tieup in power generation venture

MANILA, Philippines - TeaM Energy Corp., a partnership between Japanese firms Tokyo Electric Power Corp. and Marubeni Corp., has expressed interest to enter into a power generation venture with Manila Electric Co. (Meralco).

“We are willing to join. All of us, we’re standing in line,” TeaM Energy president Federico Puno said.

Meralco has announced plans to spend about $2 billion to build more than 1,500 megawatts (MW) of power over the next five years. The power distribution giant said it is willing to partner with power generation companies that would help them bring down generation costs.

Meralco president Manuel Pangalinan earlier said they are looking at bringing down the generation cost to to less than P5 per kilowatthour (kwh).

He said they are already in talks with several power generating firms but pointed out Meralco should keep a majority stake in the venture to retain and control over the pricing of power that would be generated by the new power plants.

Meralco is now in the process of putting up a new subsidiary, Meralco Power Generation Co. (MPGC), to handle its power generation business.

Initially, Pangilinan said they intend to put up a 500-MW peaking plant within the next two years.

The Meralco chief said they are initially eyeing to build coal-fired power plants as these, at the moment, appear to be the most cost-effective source of energy.

TeaM Energy runs the Sual and Pagbilao coal-fired power plants in Pangasinan.

Sual, the largest and most cost-effective coal-fired power plant in the Philippines, was built in 1996 and started providing electricity to the Luzon grid in October 1999 through a 1,000-MW energy conversion agreement with the National Power Corp. under a 25-year build-operate-transfer scheme.  

The Pagbilao coal-fired power plant, on the other hand, commenced operations on Feb. 6, 1993.

Pangilinan said the company is well-positioned to invest on these power projects as it has cash on hand of P20 billion as of end-September 2010.

Meralco has not engaged in building power facilities since 1979.