AC Energy ramping up capacity, targets leadership in renewables

MANILA, Philippines — The Ayala Group plans to build 2,000 megawatts (MW) of renewable energy (RE) capacity in the next six years to transform Phinma Energy Corp.—to be renamed AC Energy Philippines Inc.—as the leader in RE development in the country.

“Our vision for AC Energy Philippines is to be the leader in renewable energy in the country. Our goal is to reach 2,000 MW of renewables by 2025,” AC Energy Philippines president Eric Francia said during the company’s stockholders meeting yesterday.

AC Energy Philippines currently has 150 MW of RE capacity from Phinma Energy and parent AC Energy.

To be able to reach this goal, Francia said the company would invest as much as $2 billion based on a rule of a thumb of about $1 million per MW.

“Looking at a 70-30 debt equity ratio, you’re looking $600 million of equity that would need to be raised over time until 2025,” he said.

As part of transforming the company by 2025, AC Energy Philippines aims to return to a positive bottom line immediately by 2020.

It will consolidate key operating and developmental assets such as the 2x135-MW coal-fired power plant in Calaca, Batangas under South Luzon Thermal Energy Corp. (SLTEC) and its renewable energy pipeline such as the 52-MW Northwind Power Development Corp. in Bangui, Ilocos Norte; the 81-MW wind farm in Pagudpud, Ilocos Norte through its affiliate North Luzon Renewable Energy Corp. (NLREC) and the 18-MW solar plant in Negros Oriental under Monte Solar Energy Inc. (Montesol).

“Consolidating the ownership of SLTEC will enable the company to withstand market volatilities and compete for the long term,” Francia said.

SLTEC is a joint venture of AC Energy, Phinma Energy and Marubeni Corp.’s Axia Power Holdings Philippines Corp.

To help bring the company back to profitability is the recently signed power supply agreements (PSA) with Manila Electric Co. (Meralco), which went through stringent competitive selection process (CSP).

“We were very fortunate with the Meralco CSP. That is a significant part of our turnaround because, as you know we are using the SLTEC capacity for that. It stabilizes our cash flows,” Francia said.

Once this process is completed, it would then focus on investing in new developments and acquisitions, particularly RE projects.

“We shall also invest in greenfield projects, with a strong emphasis on renewable energy. With the government’s target of renewables reaching 35 percent of energy output by 2030, the country would need to build over 15 gigawatts (GW) of renewables in the next decade. We will make significant investments in this space,” Francia said.