Global Power vows to diversify power generation portfolio

MANILA, Philippines — San Miguel Global Power Holdings Corp. (SMGP), the energy arm of conglomerate San Miguel Corp., has reiterated its commitment to the diversification of its power generation portfolio through the development of solar-based power projects.

A global think tank last week cautioned the company of potential financial risks due to its fossil fuel expansion and shift to liquefied natural gas.

As part of the diversification of its power generation portfolio, SMGP said it continues to undertake the development of solar-based power generation projects.

“SMGP remains fully compliant with existing local and international environmental requirements, laws, and regulations, protects the biodiversity surrounding its project sites, and actively reduces emissions in the supply chain and in its operations,” the company said.

SMGP said it is likewise in the midst of closing a project financing arrangement for its battery energy storage systems (BESS) which allows the safe integration of renewal energy to the national grid.

The company is eyeing to complete one of the largest integrated battery storage networks in the world – a total of 32 battery storage stations, which will have a combined capacity of 1,000 megawatts (MW).

BESS can be used to bridge the energy security gap by storing excess energy when it is available, and releasing it when demand is high.

“When completed, SMGP expects the BESS business to contribute meaningfully to its revenues,” it said.

The Institute for Energy Economics and Financial Analysis (IEEFA), in a report released last week, said SMGP’s exposure to global fossil fuel prices has weighed negatively on its financial position in recent years.

The global think tank said the company’s shift from coal to more expensive LNG could likewise hinder its ability to meet growing financial obligations.

SMGP, however, said it remains confident of its ability to tap the local market as proven by its successful issuance of P40 billion retail bonds.

Further, the company said it continues to have access for its funding requirements with financial institutions and certain loan maturities this year have been refinanced.

The company posted consolidated revenues of P221.4 billion and EBITDA of P42.32 billion last year, which were both at par with results in prior years.

SMGP has a combined installed capacity of approximately 19 percent of the national grid, 25 percent of the Luzon grid, and seven percent of the Mindanao grid as of end-June.