Energy Secretary Alfonso Cusi is hoping Chinese companies will invest in merchant coal-fired power plants with a capacity of up to 1,500 megawatts in the Philippines with the expected arrival of Chinese President Xi Jinping next month.
Cusi earlier announced that a Chinese company was putting up several coal power plants in the country with a capacity of 1,500 MW after the energy chief engaged in talks with China’s state-run National Energy Administration.
“They came here because we are inviting to put up merchant power plants. They are doing the study. They are looking at one in Luzon and in the Visayas,” he said.
Merchant power plants are those built without power supply agreements. Cusi said he was optimistic President Xi “will have good news for us that there will be power plants.”
“These are merchant power plants… they will do it without the PSA. We have a spot market, what is the use of the WESM (Wholesale Electricity Spot Market) market if all the supply is already contracted. Our objective is to increase the volume of the spot market to 20 percent,” he said.
WESM acts as trading floor of electricity. More power plants mean increased competition lower electricity prices.
Cusi said he asked NEA for help in looking for Chinese investors that would be willing to put up merchant power plants.
“It’s hard to power plants without PSAs because of bankability, financial closure… With the hope, the aspiration that our demand is increasing, there will be some percentage of that capacity to be contracted,” Cusi said.
Chinese Ambassador Zhao Jianhua said last month the Philippines and China were preparing for Xi’s state visit to the country by the end of the year.
Xi was invited to the Philippines by President Rodrigo Duterte when they first met in October 2016.