Meralco PowerGen Plans $2 Billion Investment for Coal Power Plants

Meralco PowerGen Corp. (MGen), the power generation arm of Manila Electric Co. (Meralco), has announced plans to invest at least $2 billion in two coal-fired power projects in the Philippines, according to The Philippine Star. These projects include the 1,200-megawatt Atimonan plant in Quezon and an 80-MW facility in Toledo, Cebu.

Project Financing and Capacity

MGen’s president and CEO, Emmanuel Rubio, shared that four local banks and two Indonesian lenders have expressed interest in financing the construction of these plants.

The two facilities will have a combined capacity of 1,280 MW. Rubio estimated an investment of approximately $1.6 million per megawatt for the plants, bringing the total cost to around $2 billion.

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Environmental Compliance and Feasibility

The proposed coal facilities have already received environmental compliance certificates from the Department of Environment and Natural Resources. MGen is running feasibility studies to determine the financial viability of the plants. Rubio indicated that the company aims to get board approval by February and participate in the competitive selection process (CSP) once the numbers are confirmed.

Engineering and Procurement Plans

MGen is currently in discussions with engineering, procurement, and construction (EPC) contractors for the Atimonan and Toledo plants. Rubio mentioned that they have two candidates for the Atimonan plant and one confirmed contractor for the Toledo project, Formosa Heavy Industries.

Government Approval and Coal Moratorium

The development of these coal facilities is dependent on government approval. Specifically, the projects must be exempt from the government’s coal moratorium. The Department of Energy (DOE) imposed the moratorium in 2020, halting the approval of new coal plants. However, the DOE clarified that this ban does not apply to existing coal plants or those with approved clearances.

MGen's Atimonan project is already on the committed list of power generation projects, which means it can proceed with development despite the moratorium.

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Current Coal Portfolio and Future Outlook

Currently, MGen operates several coal plants across the Philippines. These include a 500-MW plant in Mauban, Quezon, a 246-MW facility in Toledo, Cebu, and a 164-MW plant in Iloilo City. Combined with its liquefied natural gas, diesel, and solar technologies, MGen has a total gross generation capacity of 2,425 MW, which helps meet various energy demands.