The Terra Solar Philippines (Terra Solar) company of billionaire Enrique Razon will inject massive investments of P200 billion for solar and battery energy storage system (BESS) projects to satiate its 20-year power supply agreement (PSA) for the mid-merit capacity needs of power utility giant Manila Electric Company (Meralco).
Prime Infra and Terra Renewables President and CEO Guillaume Lucci conveyed that the estimated magnitude of capital outlay will cover the development of 2,500 to 3,500 megawatts of installed solar capacity, as well as the 4,000 to 4,500 megawatt-hours (MWh) of battery storage for its committed 850MW mid-merit capacity to Meralco.
“Prime Infra, together with its partner, will invest some P200 billion into developing Terra Solar,” the company executive said. The project-partner refers to Solar Philippines Power Project Holdings Inc. of young businessman Leandro Leviste,
Terra Solar and Meralco both disclosed on Thursday, Oct. 27, the signing of the PSA between Prime Infra Chairman Enrique Razon, Jr. and the utility firm. The event was witnessed by Lucci.
Razon noted “this contract with Meralco is our response to help meet the increasing demand for power through a more cost-efficient and sustainable manner,” emphasizing that “meeting the power supply needs is of paramount importance to sustain the economic growth of the country, particularly following the challenges we faced through the pandemic and will continue to face in light of the economic headwinds the world is facing today.”
He added that the forward investments of Terra Solar in the RE sector could help “bring down cost of power while creating long-term economic, environmental and social values.”
Lucci similarly stated that their solar photovoltaic (PV)-plus energy storage project “will contribute significantly to the share of renewable energy in the power generation mix,” while noting that their company is on track on the development plan for the blueprinted solar installations.
According to Atty. Jose Ronald V. Valles, first vice president and head of Regulatory Management of Meralco, the rate of the RE-generated capacity to be supplied by Terra Solar had been pegged at a headline and levelized cost of electricity (LCOE) rate of P5.80 per kWh.
The delivery of the required capacities had been slated by February 26, 2026 for the initial 600MW while the balance of 250MW shall be made available in the load network of Meralco by February 26, 2027.
The development of the solar farms with integrated energy storage systems will be within Luzon grid sites – primarily in the Batangas-Cavite area, Nueva Ecija, Tarlac and Zambales.
Terra Solar secured the PSA deal via a “negotiated arrangement” with Meralco following two failed biddings on its unsolicited tender, which had been carried out via the competitive selection processes (CSPs) set forth by the utility firm this year.
“The rate for this renewable energy supply offer is very competitive and lower than fossil-powered generation plants, especially at this time when fuel prices are skyrocketing. This PSA between Meralco and Terra Solar is very strategic as we ensure availability of adequate and cost-competitive power for our more than 7.5 million customers in the coming years,” Valles indicated.
He specified that the awarding and eventual signing of the PSA had been anchored on the terms of reference (TOR) approved by the Department of Energy (DOE). The contract though has yet to go through the evaluation and approval of the Energy Regulatory Commission (ERC) prior to its implementation.
“The signing of the PSA serves as the culmination of the competitive challenge for Terra Solar’s unsolicited proposal,” Meralco stressed.
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