MANILA, Philippines — SPC Power Corp. is set to beef up its power portfolio with a combination of greenfield developments of renewable energy (RE) projects and brownfield thermal acquisitions to raise its profitability.
During the company’s stockholders’ meeting yesterday, SPC chairman Alfredo Henares said the company maintains a solid financial position and material headroom, which allows its flexibility to pay dividends, to maintain the performance of its existing assets and to take advantage of investment opportunities for growth, despite the drop in net income last year.
Last year, the company reported a 26.8 percent drop in consolidated net income from P1.64 billion to P1.2 billion due to repercussions brought by the COVID-19 pandemic and the economic disruption brought by super typhoon Odette in the Visayas.
To help the company bounce back, SPC director and vice president James Villareal said part of SPC’s business development efforts is to acquire 470 megawatts (MW) of thermal capacity and around 300 MW of renewable projects.
For this year, the company has set a capital expenditure of P80 million for the purchase of power barges in the Visayas region.
SPC earlier closed deals to acquire two of ACEN Corp.’s diesel-fired power barges—PBs 102 and 103—for P39.2 million each.
PB 102 and PB 103 are both 4x8-megawatt (MW) oil-fired diesel barges located in Barangay Obrero, Iloilo City and in Barangay Poblacion, Lapu-lapu City, respectively.
PB 102 was decommissioned in July 2020 while PB 103 has not commercially operated since 2015.
Meanwhile, SPC remains bullish on investments in renewables, setting its sight on solar power projects in Luzon and Visayas and the development of battery energy storage systems (BESS).
“We are also working at about 80 MW of renewable projects, specifically solar in the Visayas region,” Villareal said.
The company is doing its due diligence on a solar project that is under development.
“We hope to complete that within the year so that we can start [operating] the project within the year. With that being said, usually it will take about eight to 12 months for the project to be completed,” Villareal said.
For the BESS project, SPC is in the process of finalizing engineering, procurement, and construction (EPC) discussions.
“Hopefully, we can get the project going within the first half of the year,” Villareal said.
With its existing and prospective projects, SPC hopes to take advantage of the resurgence in demand after the COVID-19 pandemic and typhoons that ravaged the Visayas region.
“The demand has abated somewhat because of the COVID and because of the typhoon. So, we do believe that demand will return and with the renewed hope for the new administration, we hope that demand will further increase,” Henares said.
“If that happens, there will be a gap between supply and demand, and hopefully our existing assets can address that demand profitability. That, together with our new projects, will bring us to a better future,” he said.
The company chairman, however, also cited the increased competition in the business which could temper SPC’s profitability.
“Increased competition vis-à-vis what it was 10 years ago when these projects were first put up ...” Henares said.
Incorporated in 1994, SPC entered into rehabilitation, operation, maintenance and management agreement with the National Power Corp.
The company operates the 146.5-MW Panay diesel power plant located in Dingle, Iloilo and the 22-MW Bohol diesel power plant in Tagbilaran City, Bohol.
It also owns the 2x100-MW KEPCO SPC Power Corp. in Colon, Naga City, Cebu as well as the 32-MW power barge 104.
For its distribution business, SPC owns majority of Bohol Light Co. Inc. which provides electricity services to Tagbilaran City, Bohol. It also has a 40-percent stake in Mactan Electric Co. Inc., which powers up Lapu-lapu City and the Municipality of Cordova in Cebu.