Manila Electric Co., the biggest retailer of electricity, plans to invest over P39 billion in four years to roll out its smart grid program, a top executive said Tuesday.
Meralco president Ray Espinosa said the company is laying the groundwork for the breakthrough Advanced Distribution Management System 2.0 and Advanced Metering Infrastructure to efficiently manage the evolving grid, integrate more renewable energy resources and empower customers to monitor energy use.
“Looking ahead, in collaboration with the DOE [Department of Energy] and ERC [Energy Regulatory Commission], Meralco plans to invest over P39 billion in the next four years to ramp up its smart grid program,” Espinosa said during the annual stockholders’ meeting.
He said Meralco invested heavily in building a digital distribution utility last year.
The company launched the Operations Platform and Telecommunications Integrated Command Center, the first of its kind among electricity DUs in the country. The OPTIC manages all information, communication and technology systems of Meralco.
“To enhance system reliability and improve the efficiency of our power restoration efforts, we piloted the Mobile Distribution Transformer Project reducing the usual 2-to-3-hour service interruption to only a few seconds,” Espinosa said.
Espinosa said that in terms of supply procurement, Meralco is open to contracting “reasonably priced” supply from power generators including the mothballed 620-megawatt Bataan Nuclear Power Plan if repowered by the new administration.
“Meralco will favorably consider contracting reasonably and competitively priced supply from generation companies including BNPP if the same should become operational,” he said.
He said Meralco may not have the competency to maintain and operate the BNPP.
Espinosa said the recent surges in energy prices underscored the importance of diversity of fuel source for both energy security and affordability.
He cited data from the Department of Energy that while coal-fired plants would still account for a third or 32 percent of new capacity, natural gas -fired plants would be almost half or 48 percent of the new supply. The remaining 20 percent will use renewable sources.
“Hybrid RE plants that combine solar PV with battery energy storage systems promises to address intermittency of such RE sources. Meralco is looking to secure 850 MW of RE-based mid merit supply which is initially proposed to be met by a hybrid plant consisting of solar and battery energy storage systems,” Espinosa said.
He said reducing electricity prices is possible but would involve looking into many factors that affect the movement of electricity rates.
“The biggest and most volatile part of the bill which is the generation charge is driven by fuel prices, forex and demand-supply situation,” he said.
He said fuel prices mostly reflect the global oil prices and even the Malampaya natural gas is indexed to oil prices.
“What we need are sound government policies that can address the movement of fuel prices and forex and an environment that encourages the development and investment of additional capacities brought about by new generating plants,” he said.
Espinosa said there appears to be enough new capacity coming in the next few years to meet increasing power demand.
He cited the projection of the Deparment of Energy where demand in the Luzon grid is expected to increase by about 800 MW annually from 2022 to 2026.
“To meet this, around 7,198 MW of new capacity is scheduled to come online in the Luzon grid from 2022 to 2026 based on the DOE’s list of committed power plants as of Dec 31, 2021,” Espinosa said.
These include the 1,800-MW baseload power supply capacity Meralco successfully bid out last year.