AC Energy on track to hit 1,000-MW power capacity

MANILA, Philippines - AC Energy Holdings Inc., the power generating arm of conglomerate Ayala Corp., plans to ramp up its energy portfolio depending on the availability of off-take contracts amid a potential oversupply in the next few years.

AC Energy president and CEO John Eric T. Francia said the company may review its plans in terms of target capacity. In 2011, the Ayala unit laid down a five-year plan to build an energy portfolio of 1,000 megawatts by 2016.

Francia said the company is mindful of the potential oversupply, particularly in Luzon with over 2,000 MW expected to come online by 2018 and 2019.

“We’re prudent (in expanding). We’re really being sensitive to the market dynamics. We do acknowledge that more supply will be coming in the pipeline... If we have enough contracts then we’ll build the plants,” Francia said.

Francia believes there is still room for additional capacity but AC Energy would first need to meet its 1,000-MW target.

Currently, the Ayala group has about 700 MW in its energy portfolio.

“We still have a year and a half to commit at least 300 MW attributable capacity,” Francia said.

AC Energy is currently building a 4 x 135-MW coal-fired power plant in Kauswagan, Lanao del Norte in Mindanao.

GN Power Kauswagan Ltd. Co. is a limited partnership among AC Energy, the Philippine Investment Alliance for Infrastructure (PINAI) and Power Partners Ltd. Co.

AC Energy has a joint venture with Trans-Asia Oil and Development Corp., the South Luzon Thermal Energy Corp. (SLTEC), which is building a 2x135-NW coal-fired power plant in Calaca, Batangas.

For its renewable energy projects, the Ayala company has the 52-MW Northwind Power Development Corp. in Bangui, Ilocos Norte and the 81-MW wind farm in Pagudpud, Ilocos Norte through its affiliate North Luzon Renewable Energy Corp. (NLREC).

Helping the company meet its target will be the construction of the 600-MW expansion of the existing GN Power Mariveles plant in Bataan, where it has a 17 percent stake.

“One of the projects that hasn’t reached construction stage yet is the second unit in Bataan, the 2x600 MW GN Power, that’s still ongoing.  We still need off-take agreements for that one. We want the contracts to reach a certain level to commit to financial close.”

US-based GN Power, owned by Nauruan-American firm Power Partners Ltd. Co., has partnered with AC Energy in January 2014 to develop the expansion of the Bataan plant.

Other investors include Sithe Global Power LLC, a company owned by investors of The BlackStone Group.