To be replaced with another

ocean picture without the turtle

Philippines Renewable Market and Investment Opportunities

菲律宾新能源市场和投资机会
Liutong Zhang (张柳潼), lzhang@waterrockenergy.com , +852 9365 8216
Director, WaterRock Energy Economics, Aug 2021

WaterRock Energy Economics 1

DISCLAIMER
This draft document is developed to facilitate and stimulate discussion. It may not have been reviewed, and may have
factual or other errors.

This document is not to be further reproduced or distributed without express permission from WaterRock Energy
Economics (HK) Limited.

WaterRock Energy Economics 2

WaterRock Energy offers advisory services to help clients to make better
decision in the power and gas sector in Asia

A Boutique Market and Economic Consultancy Our Key Clients (since July 2018)
Focus on Asian power and gas markets and assets

Highly experienced team

Practical, analytical, nimble, client-focused with deep local
knowledge and connection with local regulators/companies

Commercial and Regulatory Support

Transaction support, market analysis, regulatory support,
Tariff benchmark

Strong client base

Regulators, grid companies, utilities, PE funds, financial
institutions, gas suppliers and importers

The Philippines is one of our bread and butter markets

WaterRock Energy Economics 3
Topics

1 Background of the Philippines Power Market 菲律宾电力市场背景

2 Philippines Renewable Sector 菲律宾新能源市场

3 Investment Opportunities and Risks 菲律宾新能源投资机会和风险

WaterRock Energy Economics 4

Background （背景）
2001电力工业改革法案， EPIRA (Electric Power Industry Reform Act), 为电力市场
提供了一个可靠的法律架构；批发电力市场运行良好

菲律宾地图和电力市场
电力市场大体已经自由化
Peak Load (2021) ▪ 2001年，菲律宾政府颁布《电力产业改革法案》，该法案成为
11 GW 了菲律宾电力改革的纲领性文件。
Luzon ▪ WESM 的私有化已经达到很高的程度(>70%).
吕宋岛
▪ 零售电价定价机制清晰，无交叉补贴。
350 kV Leyte- 批发电力现货市场 ▪ 在电力工业改革法案 (EPIRA)框架下, 政府被限制进入发电业。
Luzon HVDC (WESM)
Mini-grids (440 MW)
微型电网
Visayas Peak Load (2021)
维萨亚 2.2 GW
市场运行大体良好
Mindanao Visayas ▪ 批发电力现货市场 (WESM) 2006年12月在Luzon开始运行；
Interconnection Project
(MVIP) (450 MW), 在建。
2011年12月Visayas也加入WESM。 将来Mindanao也应该会加
入WESM, 但可能要等到MVIP的电网连接线路完成之后。
WESM 是全电量的实时竞价批发电量现货市场。 其设计与新加
坡，澳洲，新西兰电力现货市场设计大体相同。

Peak Load ▪ 2013年电力零售业 (Retail Competition and Open Access

Mindanao (RCOA)) 开始开放， 但2017年后推行缓慢。
(2021)
棉兰老岛 2.0 GW
WaterRock Energy Economics 5
Source: Philippines DOE,
Market Structure 电力行业架构
电力行业中垄断和可竞争业务大体已经拆分，输电和配电电价已经单独核定，监管
机构也大体独立
Current structure of the Philippines electricity industry

政策和监管机构 国家电气化管理局 ▪ 1992年，菲律宾成立能源部 (DOE)，作为能源

能源监管委员会 能源部 （DOE)
（NEA) 政策和项目执行的中央协调机构。2001年成立
能源管理委员会(ERC)，作为独立的半司法监
管机构，负责监管菲律宾电力企业.
电力资产负债
发电 发电商 管理公司 ▪ 输电电价和配电电价ERC单独核定。

市场运行机构
▪ The Philippines Electricity Market Corporation
（PEMC) (PEMC) 负责WESM的市场运行。PEMC是一
市场 个非盈利的独立电力市场营运商。
菲律宾电力市场
▪ 国家电网，National Grid Corporation of the
菲律宾国家电网公司（NGCP) Philippines (NGCP)， 负责输电的投资和运
输电
行。 NGCP目前也负责辅助服务的采购和电力
调度。 国网在菲律宾电网公司（NGCP）中
直接连接
马尼拉电力公司 （Meralco) 和其他 电力合作企业 (Electric
配电 私人投资者拥有的设施 (Distribution
Cooperatives, ECs)
持股40%.
Utilities, DUs)
▪ 配网公司负责配网投资和运行，同时也负责供
供电 零售供电商 给非竞争电力用户. 供给非竞争电力用户的大
部分电量是由区域的配网公司和发电公司签署
长期购电合约。区域的配网公司 (例如Meralco)
终端用户 非可竞争电力用户 可竞争电力用户
可进入发电行业，但其发电只公司供给配网旗
下的非竞争电力用户不可超过30%。
监管 支持 政策制订 电力流动
WaterRock Energy Economics 6
Source: WaterRock Energy Research
 Fuel Mix （发电组合）
菲律宾电力市场有较为多样化的燃料类型组合，但2010年后需求增长主要是由新上
马的燃煤机组供给

Capacity Fuel Mix in the Philippines （菲律宾发电容量组合）

Coal 煤电 Gas 燃气
GW Coal 煤电 Gas 燃气 Oil 油 Oil 油 Geothermal 地热
Geothermal 地热 Hydro 水电 Biomass 生物质能 GW Hydro 水电 Biomass 生物质能
25.0 Solar 光伏 Wind 风能 40% Solar 光伏 Wind 风能
Share of RE Cap 新能源的发电容量比例 0.4 18.0
0.4 0.8
0.7 35%
0.4 16.0 0.4
0.4 0.7 3.5 0.4
20.0 0.7 3.5
0.4 30% 14.0
0.6 3.5 2.5
3.3 1.8
1.8 0.8
3.2 12.0
1.8 25%
15.0 1.8 3.1
3.1 3.0
3.0 3.0 3.0 1.7 10.0
3.0 3.0
2.3 2.6 2.7 2.7 3.0 3.3 20%
3.0 3.0 2.9 1.5 1.6 1.6 2.8 3.3 3.3
1.5 3.3 8.0
1.6 1.6 1.4
10.0 1.7 1.7 1.7 1.3 1.4 2.7 3.3
1.4 2.6 2.8 2.7 3.3 15% 6.0
2.5 2.6 3.3
3.2 3.2 3.0 2.9 2.7 2.5
2.7 2.8
2.8 2.8 2.8 10% 4.0
2.8 2.8 6.9 1.0
2.7 0.4 0.1
5.0 2.7 2.7 2.7 2.7 2.7 2.6 9.7 10.2 0.9
7.7 8.4 2.0 0.0
7.0 5% 0.0
5.2 5.2 5.4 5.6 1.3 2.0
3.7 3.7 3.6 3.8 4.2 4.7
3.4 3.5 3.4 0.0
0.0 0% Luzon (2020) Visayas Mindanao
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (2020) (2020)

Source: DOE, WaterRock Energy Research

WaterRock Energy Economics 7
Key Players (主要发电商）
菲律宾有很多的外国发电投资商，但本土大家族的属下发电公司是菲律宾主要的发
电商
主要发电商 (2018年4月）
3.2 GW 3.5 GW ▪ 在EPIRA法律框架下，为了保持发电
Percent 15 GW
100
22 GW 的可竞争性， 任何一家发电商的发
100%
电容量比例不可在一个发电区域
KEPCO,
16%
Others （Luzon, Visayas and Mindanao
Ayala, 90%
Salcon, FDC, 2% QPPL grid)大于30%,不可在全国的发电比
80
HSEC, Cepalco,
2% (被Ayala收购) 例大于25%。
PALM Alsons 80%
3% (被Aboitiz收购)
etc etc
3% MPPL (被SMC收购)
70% 4%
13%
(被Meralco收购)
▪ 本土大家族的属下发电公司近年大规
4%

模进入发电行业。
60
60% 13%
15%
50% ▪ 菲律宾电力行业欢迎外国投资。 目
27% 33% 15% 前外国投资主要来自日本，韩国，泰
40
40% 国和美国。
16%
30% 16%
▪ 所有的发电企业2020年开始更加关
注新能源的投资。
20 20%
18%
28% ▪ 40-60 rule: 外资在可再生能源发电
30%
10% 21% 项目中的持股比例限制在40%及以
9% 下。
0 0%
0 20 40 60 80 100 Market share based on installed
Percent
Luzon capacity
WaterRock Energy Economics 8
Source: 32nd Electric Power Industry Reform Act (EPIRA) Implementation Status Report)
Challenging weather conditions (天气）
菲律宾的天气自然环境比较恶劣，每年都有台风，地震或火山爆发，所以投资方要谨
慎考虑这方面的风险

热带台风Tropical Cyclones, 1945 – 2006

▪ 菲律宾是世界上自然灾害最频
发的国家之一，每年无数台风
过境，经常造成电力中断和设
备损失。

Philippines ▪ 恶劣的天气和自然灾害也导致
批发电力市场价格波动性很
大。
▪ 新能源投资者需要考虑这方面
的风险。

Source: Data from the Joint Typhoon Warning Center and the U.S. National Oceanographic and Atmospheric Administration. WaterRock Energy Economics 9
 Merit Order Curve (2019) 电力发电供给线 （2019）
WESM电力市场的发电供给线在腰荷和 峰荷附近上升很快。 批发电力现货市场价格
受“事件驱动”，波动性很大

短期成本Luzon的电力供给线 (2019)， 无考虑市场力

Peso/kWh USD/MWh 1 元人民币 = 7.7 peso = 0.15 USD
7 140 Peak load （最高负荷）
Existing oil （燃油机组）
6 120 现有燃气机组
灵活的OCGT 燃气和燃
Santa Rita, San
油机组一般需要在峰荷时
Lorenzo and Ilijan
5 100 段运行，所以峰荷时段的
take-or-pay gas
电价一般比较高。
capacity Avion OCGT Remaining Santa
4 80 [Only up to the expiry Average off-
date of the existing
Rita, San Lorenzo
gas contracts]
peak load and Ilijan capacity
3 60 低谷时段的平Flexible CCGT for flexible operation
均负荷 plants
Existing coal plants （煤电机组）
2 40 San Gabriel gas
Existing gas plant
1 20 with ToP Gas
【照付不议的
Renewables* 天然气合约】
0 0
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000
MW
Note: *Renewables include solar, wind, biofuel, geothermal and hydro. Their supply is based on the average energy production during peak periods in 2017-2019. For the large storage hydro,
it bids into the market based on the opportunity cost of using the water. For simplicity, we have assumed that its cost is negligible for the supply cost curve in the chart. WaterRock Energy Economics 10
Source: WaterRock Energy Research and Analysis
Spot Market Prices 现货电力价格
WESM的月度平均现货电力价格波动性大，范围在2-6 peso/kWh (USD
40-120/MWh or RMB 0.25-0.80 yuan/kWh)

月度WESM的平均价格， Average Monthly WESM Price in Luzon and Visayas

USD/MWh PhP/kWh Ex-ante Luzon Spot Prices Ex-ante Visayas LWAP

200 10.0 Major

High
High demand and plant
demand and Major plant
major plant outages
low hydro outages and low
outages
160 8.0 hydro

120 6.0

80
Luzon
4.0

40 2.0

Visayas
0 0.0

-40 -2.0
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21

Note: *Dark spark spread is defined as the difference of average Luzon price and average coal fuel cost for a subcritical coal plant.
Source: PEMC, DOE, WaterRock Energy Research and Analysis WaterRock Energy Economics 11
 Dispatch of Plants in Luzon， 机组调度
WESM 调度基本上遵从经济调度原则，所以新能源调度一般在煤电之前。各发电厂
每个时段的发电电量在PEMC网站公开

平均每小时各机组的发电电量， Avg Hourly Generation by Technology in Luzon

March 2 – March 15, 2020 March 16 – March 29, 2020
Average hourly Gen, MW
Biofuel Geothermal Biofuel Geothermal
Run-on-driver Hydro Wind
Run-on-driver Hydro Wind
Solar Take-or-pay Gas
Solar Take-or-pay Gas
Mar 2 - 15 Mar 16 - 29 Change %
GW Coal Flexible gas
Large storage hydro Oil GW Coal Flexible gas
Large storage hydro Oil Total 8618 6689 -22%
10 10
Large Storage Hydro （大水电）
9 9
Flexible Gas （可调节燃气）
8 8 Oil 92 72 -22%
7 7 Hydro 369 332 -10%
Large Storage Hydro （大水电）
6 6 Flexible Gas 415 93 -77%
5
Coal （煤电） 5
Coal （煤电） Coal 5064 3532 -30%
4 4

3 3

2 Take-or-pay Gas 1975 1981 0%

Take-or-pay Gas （照付不议天然气） 2
Take-or-pay Gas （照付不议天然气） Solar 80 82 +3%
1 Solar （光伏） 1 Wind 92 73 -21%
Solar （光伏）
Geothermal （地热） Geothermal （地热） Geothermal 467 460 -1%
0 0
1 2 3 4 5 6 7 8 9 101112131415161718192021222324 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Biofuel 59 61 +3%
Hour over a day Hour over a day
WaterRock Energy Economics 12
Source: PEMC
Note: Average daily generation based on ex-ante hourly generation by plants
WESM Price Outlook: Market Fundamental， 市场供给
电力市场在煤电上马后短期供给充足； 但2024年后需要新的电厂和天然气接收站上
马来满足需求增长
供给和需求的年度增长 Incremental Committed Supply and Demand (Luzon + Visayas)
MW
Coal Gas Biofuel Solar Oil Demand growth ▪ 年度需求增长： 3.5-5.0% CAGR
2,000
SMC LNG-fired
CCGT (Dec 2024)
▪ 供给
1,000 GNPower Dinginin ‒ GNPower Dinginin 煤电计划2021年上马.
‒ 几个光伏项目。
0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 ‒ 1200 MW SMC LNG-fired CCGT 项目
-1,000 （还没开始建，可以延后）.

Supply and Demand Dynamics in WESM (Only Committed Cap)

备用容量
率
GW Geothermal Gas Coal Hydro ▪ 电力市场在2022-2024年间不会有大机
25 Biomass Oil Solar Wind 70% 组上马，所以市场会趋向紧平衡。
Peak Demand Reserve Margin 60%
20
备用容量率 (右轴）
▪ 2024年后本地天然气Malampaya gas 供
50%
15 40% 给的合约到期，这也会对电力市场造成
30% 较大的冲击。
10
20%
5
10%

0 0%

Note: Reserve margin = (dependable capacity – peak load)/peak load; New oil capacity addition is mainly to provide ancillary services. WaterRock Energy Economics 13
Source: DOE, WaterRock Energy Research and Analysis
Topics

1 Background of the Philippines Power Market 菲律宾电力市场背景

2 Philippines Renewable Sector 菲律宾新能源市场

3 Investment Opportunities and Risks 菲律宾新能源投资机会和风险

WaterRock Energy Economics 14

 RE Capacity （新能源装机)
风电和光伏的投资开始于2010年后，最初主要是由 固定价格收购制度 （Feed-in
tariff） 驱动。地热和水电的投资主要在60-90年代。

Installed Renewable Capacity in the Philippines

Geothermal 地热 Hydro 水电 Biomass 生物质能 Geothermal Hydro
GW
GW Biomass Solar
Solar 光伏 Wind 风能 Wind
8.0 40%
4.5
Share of RE Cap 新能源的发电容量比例 4.1
6.7 6.8
7.0 6.6 35% 4.0 0.4
6.3 0.4 0.4
6.0 0.4 0.4
6.0 Share of RE Cap (RHS) 0.4 30% 3.5
0.4 0.7 0.8
5.3 0.7
0.7 0.2 0.3
0.6 0.2 3.0
5.0 4.6 4.8 0.4 0.2 25%
4.4 4.4 4.4 4.5 4.5 4.6
4.4 4.3
4.2 2.5
3.8
4.0 20%
3.5 3.5 3.5 2.0 2.5
3.2 3.3
3.0 2.7 2.7 3.0 3.0 3.1 15% 1.5
2.6 3.0 3.0 3.0 3.0 3.0
2.3 2.9 1.5 0.1 1.2
0.4
2.0 10% 1.0

1.0
1.0 5% 0.5 0.9
1.6 1.6 1.7 1.7 1.7 1.6 1.6 1.7 1.8 1.8 1.8 1.8 0.8
1.4 1.3 1.4 1.4 1.5 1.5
0.0 0.1
0.0 0% Luzon (2020) Visayas Mindanao
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (2020) (2020)

WaterRock Energy Economics 15

Source: DOE, WaterRock Energy Research
FIT in the Philippines，固定价格收购制度
Feed-in-tariff (FIT) 按照“先到先得”的 配额制设计的； 风电和光伏的配额在2014和
2016年后已满

RE Capacity under the FIT System

As of Jan 5, 2021
Signed REPA Effective REPA*
FIT Rate Installation
(Peso/kWh) Target, 配额 (MW)
No. Capacity (MW) No. Capacity (MW)
24 525.95 23 484.65
Solar，光
FIT1: 9.68 7 108.90 6 67.6 500
伏
FIT2: 8.69 17 417.05 17 417.05
7 426.90 7 426.90
Wind，风 FIT1:8.53 3 249.9 3 249.9
400
电 FIT2:7.40 3 144 3 144.0
Bangui1&2: 5.76 1 33 1 33.0
17 224.25 5 163.84
Hydro， FIT1:5.9 5 34.6 5 34.6
250
小水电 Deg. Rate:5.8705 10 113.77 2 54.44
Bakun:5.6715 2 75.88 1 74.80
33 286.35 17 135.13
Biomass，
FIT1:6.63 13 119.56 13 119.19 250
生物质能
Deg. Rate:6.5969 20 166.784 4 15.94
Total 81 1463.44 55 1210.51 1,400

Note: *Effective REPA is for plants with FIT COC and all other documentary requirements complied with; ready for payment/already being paid. WaterRock Energy Economics 16
Source: Transco, WaterRock Energy Research and Analysis
主要的新能源政策
最新关注度比较大的是可再生能源配额制 （Renewable Portfolio Standard, RPS)，
绿证的交易很有可能在第四季度会开始

▪ 2008年12月国会通过新能源法案， Republic Act No. 9513, 也叫 Renewable 菲律宾的新能源发电量比例

Energy Act of 2008 (the RE Act)， 于2009年1月开始实施。 Coal Gas Oil Geo
Hydro Biomass Solar Wind

RE
▪ 在新能源法案框架下，有几个支持政策。 (34%)
2008
− FIT regime （固定价格收购制度）
61 TWh
− 可再生能源净计量， net metering [已实施] : 这允许利用可再生能源技术（例如太阳
能）的用户把任何多余的发电量以平均发电价格卖给配网公司。

− 绿能零售，Green option [已实施] : 允许具有 100 千瓦及以上需求的最终用户直接从 新能源发电量比

可再生能源的发电商购电. 可再生能源发电商需要从能源部（DOE）申请 经营许可证 例在过去十年有
（Operating Permit）. RE 明显的下降趋势
(21%)
− 可再生能源配额制 Renewable portfolio standard, RPS [started in 2018]: 可再生能
源配额制原来计划2009开始，但推迟到2018年。 RPS是一项以市场为基础的政策，
要求电力供应商(i.e. 配电和零售商）提供的能源中有一定比例的合格的可再生能源。 2020
现 在 的 制 度 是 每 年 新 能 源 的 售 电 比 例 要 提 高 1 个 百 分 点 。 PEMC 正 在 建 立 绿 证
102 TWh
(renewable certificates) 交易平台。

WaterRock Energy Economics 17

Source: DOE, WaterRock Energy Research and Analysis
Green Energy Auction Program (GEAP)，绿电能源拍卖计划
GEAP 绿电能源拍卖计划会由能源局组织，如果顺利会在今年10月开始

▪ 能源局DOE计划进行年度绿电拍卖来帮助电力供应商满足可再生能源配额制 的要求。

▪ 拍卖采用电子招标方式进行. 主要拍卖流程：
− 不迟于每年 6 月 15 日发布拍卖通知。

− 拍卖前公布最高拍卖价， Green Energy Auction Reservation Price (GEAR Price).

− 将提供关键信息，例如拍卖的总供应量（MWh）; 所需的供应类型（可变或非可变 RE）; 交货期和合同期限等.

▪ 拍卖设计按出价付费 (i.e. pay-as-bid auction).

▪ 2000 兆瓦的首次拍卖原计划于 2021 年 6 月举行，但已被推迟。 可能会在2021年10月进行。

Source: DOE, WaterRock Energy Research and Analysis WaterRock Energy Economics 18
Topics

1 Background of the Philippines Power Market 菲律宾电力市场背景

2 Philippines Renewable Sector 菲律宾新能源市场

3 Investment Opportunities and Risks 菲律宾新能源投资机会和风险

WaterRock Energy Economics 19

中长期投资机会
2022年后的需求增长，新能源技术和政策的驱动会为新能源投资者提供
机会
投资机会 市场环境
a
▪ Luzon, Visayas 和 Mindanao 的每年需求增长是4-6%， 等同于 600-800 MW。 新机组需要投运来满足需
满足需求增长 求增长。
▪ 近年煤电的融资比较困难。能源局也于2020年底颁布了 新的政策，不再批准全新的煤电站 (greenfield coal
capacity moratorium)。

b
取代旧的技术/基 ▪ 本地天然气产量将在2024年后下降。 需要建设液化天然气接收站。
础设施
▪ 在90年代初建设的旧的煤电和燃气机组 可能会退役，需要建设新的发电容量来取代它们。

c
资产收购 ▪ 电力资产负债管理公司 （PSALM ）需要 将其资产私有化， 例如 Malaya oil, CBK and Casecnan hydro
as well as Mindanao 的煤电站.

d
特殊项目 ▪ 可再生技术（如电池储能）的成本继续下降，因此对于电力系统的更多应用（如辅助市场），它们可能是
经济的。

WaterRock Energy Economics 20

 满足需求增长
a

政府和主要发电商都制定了雄心勃勃的可再生能源产能扩张计划，其中大部分可能
是光伏
DOE 电力计划 PDP: Power Supply Outlook 2018-2040 主要发电商投资计划
[New capacity addition]
GW
Companies Plan/Target
70 Variable
Peaking Ayala Corp ▪ 目前拥有1.8 GW 容量，其中约 50% 发电量
60
Flexible 12.0 (AC Energy) 来自新能源.
50 Baseload
35 ▪ 目前有1.2 GW光伏和风电项目在计划中。
其目标是在2025年新能源容量达到 5 GW。
40
10.0
30

20
7.5 Aboitiz Power ▪ 目标是装机从2019 的4.43 GW 扩张，到
10 2029年达到9 GW； 其中一半是新能源机组。
5.3
0
2020-2025 2025-2030 2030-2035 2035-2040 2020-2040
新能源计划 MGEN ▪ 在接下来5-7年中建设1-1.2 GW 新能源容量
GW Mindanao
40 Visayas
▪ 很多其它发电商也在大力推进新能源和储能项
Luzon
35 1.2
2.8
2.1 Others
30 4.9 目。
8.0
25
0.8
20 1.5
15 7.7
0.7 27.8
10 6.8
5
5.3
0 Source: page 28 of Ayala 2019 Integrated Annual Report; page 165 of Aboitiz Final Prospectus for Bond Issuance
2020-2025 2025-2030 2030-2035 2035-2040 2020-2040 (June 2020), MGEN website
WaterRock Energy Economics 21
Source: DOE committed and plan list, Jan-Mar 2020; DOE Power Demand and Supply Outlook 2018-2040, published on October 9, 2018.
a
To meet growing demand，满足需求增长
光伏的LCOE已经比新煤电或气电更富经济性，所以很多投资者对投资光伏很有兴趣；
风电的投资比较少，主要是因为输电线路的滞后
不同容量系数下的平准化能源成本, Levelized Cost of Energy (LCOE) at different capacity factor,
Php/kWh USD/MWh (2020 real term)
10 200
New
9 180 Supercritical
Coal （新的超
8 160 New 临界煤电）
Advanced
CCGT
7 140
（新的
CCGT）
6 120

5 100
Onshore Wind 2020 （风
电）。 2800利用小时（32%
4 80 capacity factor)
Solar 2020 （光伏2020， 1500利用小时（17% capacity factor)
3 60 Solar 2025
Solar 2030
2 40
0% 20% 40% 60% 80% 100%
Capacity factor of the power plants, 平均利用率
Note: Assumptions for new supercritical coal, advanced CCGT and solar are included in the Appendix – Assumption Book. For refurbish existing CCGT plant, we assume that the CAPEX
expenditure is equivalent to 30% of CAPEX for building a new CCGT plant [i.e. 390/kW] and the economic life can be extended for another 10 years.
Source: WaterRock Energy Analysis, EIA, NREL WaterRock Energy Economics 22
a
To meet growing demand，满足需求增长
光伏的经济空间很大，但关键是电网的接入和与能否与电力供应商达成长期购售电
合约

供给Meralco DU主要机组的发电成本

USD/MWh Php/kWh

Average Generation Cost (Coal), Meralco DU PowerSource in 2016

160 8.0 Average Generation Cost (Gas), Meralco DU SP (85 MW) in 2017
SP (50 MW expansion) in 2018

120 6.0 5.8

5.7
5.2 5.1
4.7 4.9
4.5
80 4.0 3.6
2.8

40 2.0

0 0.0
2017 2018 2019 Average auction price* New solar project
煤电和燃气 光伏

*Note: for the competitive selection process on solar capacity, the winning offer has an initial price and an escalation factor of 2%. We calculate the simple average of price over 20
years to determine the average auction price.
WaterRock Energy Economics 23
Source: Meralco Rate Archive, Public news and WaterRock Energy Research
a b
Our Power Optimization Modelling Output， 我们电力模型的结果
火电和光伏将成为满足菲律宾中长期不断增长的需求的主要来源

New Builds in Luzon New Builds in Visayas New Builds in Mindanao

[on Top of “Committed”] [on Top of “Committed”] [on Top of “Committed”]
Hydro Geothermal Wind Hydro Geothermal Biofuel Hydro Geothermal Biofuel
MW
MW Biofuel Solar Coal MW Wind Solar Coal
Natural Gas Oil Wind Solar Coal
Natural Gas Oil
3,000 600 Natural Gas Oil 600

2,500 Gas 500 500

2,000 400 Gas 400

Gas
Coal
1,500 300 300

Coal Coal
1,000 200 200

Solar
500 100 Solar 100
Solar

0
0 0

Note: For “generic’ entry” of coal, gas, oil, wind and solar, they are based on economic expansion; for “generic” entry of biomass, hydro and geothermal, it is based on the average annual
capacity entry in the past decade. WaterRock Energy Economics 24
Source: WaterRock Energy Modelling and Analysis
a b
Reference Case (RPS-1.0%) - Modelling Output，电力模型结果
随着光伏容量渗透率的增长，灵活容量（天然气/石油/大型水力发电/BESS）的发电转向
下午4点后

Diurnal Hourly Generation Mix in Luzon

GW
BESS
Discharging 25
Solar 2040
Wind
2035
Oil
20 Solar

Large Hydro
2030 Solar Oil
Flexible Gas
15

Coal 2025 Solar

ToP Gas 2020
10
ROR Hydro
Flexible Gas
Geothermal

Biomass 5 Coal
BESS
Charging
Take-or-pay Gas
Load
0 Geo
1 3 5 7 9 11 13 15 17 19 21 23
Hour over the day Hour over the day Hour over the day Hour over the day Hour over the day

Source: WaterRock Energy Research and Analysis WaterRock Energy Economics 25

a b Meralco DU Existing and Future Contracts （Meralco DU采购计划）
Meralco DU 计划在未来 1-2 年内采购 2800 MW 新基荷、600 MW mid-merit 和 400
MW 可再生能源容量

Meralco’s Contracting Portfolio under its Procurement Plan， Meralco DU采购计划下的电力组合

MW
Existing coal Existing gas Existing oil
12,000 Existing solar Existing others* New 20 Yr base-load (1800 MW)
New 16 Yr base-load (70 MW) New 20 Yr base-load (1000 MW) New 20 Yr base-load (1200 MW)
New 20 Yr mid-merit (850 MW) New 20 Yr mid-merit (500 MW) New 25 Yr RE base-load (300 MW)
10,000
New 20 Yr RE mid-merit (100 MW) Peak demand

Peaking CSP will be procured

8,000 annually with terms up to 5
months only (Mar – Jul)

New 100 MW RE base-load

6,000 New 300 MW RE base-load
New 500 MW Mid-merit
New 800 MW Mid-merit
New 1200 MW base-load
4,000
New 1000 MW base-load
Existing gas New 70 MW base-load
2,000
New 1800 MW base-load [SMC 1200
MW LNG-fired and 600 MW coal]
Existing coal
Solar (20 Yr contracts)
0 SBPL Coal (20 Yr contracts)
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Note:*Others include two mid-merit contracts (110 MW Phinma Energy Mid-merit contract and 100 MW FirstGen Hydro Mid-merit contract.
Source: Meralco Power Supply Procurement Plan (PSPP) 2020-2029, WaterRock Energy Research and Analysis
WaterRock Energy Economics 26
c
To acquire privatized assets,资产收购
PSALM 计划在2020-2022年把其旗下的资产私有化，但计划因为COVID-19有所推迟

Remaining PSALM Power Assets for Privatization, PSALM剩下的主要资产

Rated Capacity Sale (Indicative) Bid Date

Malaya Thermal Power Plant 650 MW oil plant Physical asset Failed in 2020, may re-try in
(Luzon), 2021

Caliraya-Botocan-Kalayaan 797.92 MW contracted capacity IPP BROT/PPA contract up to Possibly in 2021/2022

(CBK) HEPPs (pumped storage hydro-power
plant operated by CBK Power
Company in Luzon)
Casecnan HEPP 228 GWh contracted energy
(hydro-power plant operated by
CE Casecnan Water and
Energy Company in Luzon)
Mindanao coal-fired power plant 200 MW contracted capacity
(coal plant in Mindanao)
Agus-Pulangi HEPPs 1001.1 MW Hydro
(Mindanao)
Source: PSALM website, WaterRock Energy Research and Analysis
07 Feb 2026; IPP contract
transfers to IPPA
IPP BOT/PPA contract up to 05 2021 [likely delayed to 2022]
Apr 2022; IPP contract transfers
to IPPA
IPP BOT/PPA contract up to 15 2022 （may be delayed)
Nov 2031 operated by STEAG
State Power
Physical asset Privatization is subjected to
consultation with Congress and
PSALM Board’s policy direction
WaterRock Energy Economics 27
d
Special Projects,特殊项目

菲律宾也有其他特殊的投资项目机会

“绿色”解决方案的机会可能会增加

▪ 分布式光伏投资机会； 可利用不同的商业模式。

▪ 储能投资机会； 可与NGCP 签订长期辅助服务合约

▪ 其它技术。

Source: WaterRock Energy Research and Analysis WaterRock Energy Economics 28

即使有已确定的机会，要实现商业化和获取价值仍有许多障碍需要克服

许多问题仍有待研究

▪ 定义商业机会的可用商业机制有哪些？ What are the available Commercial Mechanisms that

define commercial opportunities?

▪ 谁是竞争对手，他们的动机和商业目标是什么？Who are the Competitors and what are their

motivations and commercial objectives?

▪ 需要评估的风险有哪些？What are the Risks that need to be evaluated?

▪ 投资是否创造了有价值的未来选择？Does the investment Create Future Options which may

become valuable?

▪ 什么是退出选项？What are the Exit Options?

Source: WaterRock Energy Research and Analysis WaterRock Energy Economics 29

 WaterRock
Thanks and Contact Energy Economics

www.waterrockenergy.com

WaterRock Energy
Economics (HK) Key contact numbers,
Unit 1001, 10/F, Wharf T&T No. in HK: +852 9365 8216
Centre, Harbour City, China: +86 155 0757 1202
7 Canton Road, Wechat: zhangliutong83112
Tsim Sha Tsui, Hong Kong

For enquiries, contact

Liutong Zhang (Lucas)
lzhang@waterrockenergy.com
Skype: liutongzhang

WaterRock Energy Economics 30

Contact Information of the Author

Liutong Zhang (Lucas)

Director at WaterRock Energy Economics
lzhang@waterrockenergy.com
+852 9365 8216

Lucas has over 14 years’ experience of providing advisory services on the power and gas market in ASEAN electricity
markets such as Singapore, the Philippines and Vietnam. He has been extensively involved in the market design of a
Forward Capacity Market in Singapore since early 2019. In the Philippines, he was invited to present to the Philippines'
Energy Committee of the Senate and Philippines' House of Representatives on the role of natural gas and economics of
building new LNG terminals in early 2020. In Vietnam, he has completed a few projects related to forecast of ACT for
SHP as well as investment opportunities and risks in renewable and gas-fired power projects.

He also has in-depth knowledge in greater China region, including forecasting of solar and wind curtailment and power
tariffs, asset valuation and evaluation of opportunities/risks of investing in renewables and gas infrastructure in mainland
China, Hong Kong and Taiwan.

He holds a Bachelor of Chemical Engineering with first class honours from the National University of Singapore (NUS).
He is fluent in English and Mandarin.
WaterRock Energy Economics 31
WaterRock Energy offers advisory services to help clients to make better
decision in the power and gas sector in Asia

A Boutique Market and Economic Consultancy Our Key Clients (since July 2018)
Focus on Asian power and gas markets and assets

Highly experienced team

Practical, analytical, nimble, client-focused with deep local
knowledge and connection with local regulators/companies

Commercial and Regulatory Support

Transaction support, market analysis, regulatory support,
Tariff benchmark

Strong client base

Regulators, grid companies, utilities, PE funds, financial
institutions, gas suppliers and importers

The Philippines is one of our bread and butter markets

WaterRock Energy Economics 32
Modelling Background
Our model is designed and calibrated to reflect the unique features and
characteristics of the Philippines electricity market

Power Optimization Tool

Key inputs Key outputs
Power Optimization
Key demand parameters: Model
▪ Demand profile of solar and non-solar hours
Objective Function:
▪ Demand growth.
Minimise net present value (NPV)
Key Supply Parameters: of short-run marginal cost (for
▪ dispatch) and long-term system
Existing Capacity ▪ Energy prices
▪ Heat rate cost (for capacity expansion) over
forecast horizon.
▪ Fuel price and contractual constraints ▪ REC prices
▪ Variable operating cost.
▪ Dispatch of power
New entry economics: Key Constraints: plants
▪ Capital cost [Cost Curve of different ▪ Load constraint
technologies]
▪ Reserve margin constraints ▪ Capacity investment.
▪ WACC/hurdle rate
▪ Resource limits (like solar etc)
▪ Annual capacity expansion cap [if any].
▪ Renewable Portfolio Standard
Other key constraints: constraints.
▪ Renewable Portfolio Standard
▪ Price caps. 33
WaterRock Energy Economics
IPPA Arrangement
• IPPA pays generation and monthly fees, the latter of which are the bid variable in
PSALM/NPC the auction of the IPPA appointment. Hence, the IPPAs are obliged to pay what
• Continues to act as counterparty to they offered as monthly fees as part of the bid and entered into the
the IPP Agreement Administration Agreement. The generation fees are those specified in the bid
Administration IPP Agreement
documents and entered into the Administration Agreement.
Agreement (AA) (ECA/PPA) • Shortfalls between the monthly fees and the capacity payments in the original
IPP Agreement are stranded costs for PSALM. PSALM can petition the ERC for
IPPA recovery of such stranded costs through the Universal Charge on all consumers.
• Bids the plant into the IPP • Any differences in the generation fees vs. those in the underlying IPP Agreement
market & receives • Continues to operate represent deliberate improvements or transfer of risks away from the IPPA.
revenues and maintain the plant
• Dispatches according as per the ECA/PPA – For example, where it was recognized that bidders would prefer not to take
to the AA
• Registered WESM volume risk (and so would price the risk heavily into their monthly payment
participant offers), generation fees (PhP/kWh) were created so that volume risk could
be partially transferred from the IPPA to PSALM.
Pool
Bids power into Generates power for • The detailed structure of the IPPAs varies depending on the contract and each
Bilateral revenue
WESM delivery to WESM one is catered for the plant’s operational aspects and commercial structure.
PSAs Bilateral
revenue • Where the underlying ECA/PPA is a BOT, PSALM has granted the IPPA the
option to receive transfer of the asset upon end of the ECA/PPA cooperation
period. Only at this point does the IPPA get ownership of the power plant.
DUs / Other
WESM
buyers

WaterRock Energy Economics 34

Reference Case [1.0% annual incremental increase] – RE Dispatch
In our dispatch model, we assume that biomass, geothermal, RoR hydro, wind
and solar will be dispatched first based on fuel availability (2017-20 data)

Average Hourly RE Generation in Luzon Average Monthly RE Capacity Factor in Luzon

[based on 2017-20 data]
90%
80%
▪ Variation of RE
Biomass (71%) 80% Biomass (2019)
capacity factor
70%
across different
70% years has been
60%
Geothermal (54%) Biomass (2020, 105 MW) relatively small.
60% Geothermal (824 MW)
50% ▪ Some RE
50% sources exhibit
40% seasonal
Run-of-river hydro (23%) pattern. For
40%
30%
Run-of-river hydro* (194 MW) example, wind
30% generates
20% Wind (31%) more in Q4 and
Wind (337 MW)
Solar (DC rating, 17%) 20% Jan; RoR hydro
generate more
10% Solar (360 MW)
10% in Jun-Sep.
0%
1 3 5 7 9 11 13 15 17 19 21 23 0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Hour over a day

WaterRock Energy Economics 35

Source: PEMC, DOE, WaterRock Energy Research and Analysis
*Note: The Casecnan hydro is not included as a run-on-river hydro.
Generic Capacity Entry (Discount Rate)
The cost of equity is assumed to be 13.8% and pre-tax cost of debt is assumed
to be 7.2% based on ERC’s methodology

Discount Rate Assumption

US long-
Pre-tax Post-tax Post-tax
Local currency Gearing term
MRP Beta RFR Cost of Equity cost of Tax Nominal real-term
rating (Moodys) (D/D+E) Inflation
debt WACC WACC
rate
Discount rate for
Baa2 8.48% 1 5.33% 13.81% 45% 7.20% 30% 9.86% 2.00% 7.71%
thermal

Discount rate for RE Baa2 8.48% 1 5.33% 13.81% 45% 7.20% 10% 10.51% 2.00% 8.34%

Based on ERC’s methodology:

▪ Cost of Equity: Market Risk premium x Beta + Risk free rate
‒ Market risk premium (MRP): Country Risk Premium by Professor Aswash Damodaran of New York University [3.48% as
updated on April 1 2020, up by 0.18% from 2015] + historical risk premium from a mature equity market [5%] = 8.48%
‒ Risk-free rate (RFR): It is benchmarked from daily average of Philippines Dealing System Treasury Fixing (PDST-F) rates, but
PDST was phased out on Oct 26, 2018. BVAL is typically used and its average rate is 5.33% in Jan 2019 to June 2020.
▪ Cost of Debt: It is largely based on the financing cost for a specific project. Without better information, we use the cost of debt of SBPL
plant (i.e. 7.2% pre-tax, and 5.05% post-tax)
▪ Tax rate: 30% for thermal; 10% for Renewables.
WaterRock Energy Economics 36
Source: ERC, Bloomberg, WaterRock Energy Analysis
Generic Capacity Entry
Key assumptions on generic entry of thermal capacity in the Philippines

Characteristic and Operating Cost Assumptions of New Economic Entry

Project costs Net Heat rate VOM cost FOM cost
Source
(US$/kW) (GJ/MWh HHV) (US$/MWh) (US$/kW/year)
Super-critical coal (only Luzon grid) 2,200 9.6 0.45 66 ERC case no. 2014-076RC
Sub-critical coal (Luzon and Visayas About 10% cheaper than supercritical coal (to be
2,000 11 0.45 66
grids) further verified)
Advanced CCGT (only Luzon grid)* 1,300 6.9 0.82 64 ERC case no 2018-0.13 RC
About 15% cheaper than advanced CCGT (to be
CCGT (Luzon and Visayas) 1,100 7.8 0.82 64
further verified)
About 30% cheaper than CCGT (to be further
OCGT (Luzon and Visayas) 750 12 0.45 16
verified)
Note: * Based on the ERC filing of the PSA between San Gabriel and Meralco (ERC case no 2018-0.13 RC), its O&M cost is all under fixed cost. We have just assumed 90 percent of the O&M is fixed. Singapore assesses the overnight capital
cost of building an F-class CCGT plant, and the cost is determined to be about USD 1300/kW.
For the evolution of capital cost and O&M of thermal capacity over time, we assume that they are constant in real term.

Example: Overnight Capital cost of SBPL Fixed Operation Cost of SBPL

SBPL SBPL
EPC cost PhP million 30,923 Fixed Operation and Maintenance
IDC / financing fees PhP million 9,016 Cost (USD) USD/kW-year 29
Site cost PhP million 641
Other project cost* PhP million 7,200 Fixed Operation and Maintenance Cost (Peso) Peso/kW-year 1381
Contingency fee PhP million 1,728 IFCP (Annual Interconnection Facility Capacity
Total capital cost 49,507 Fee) Peso/kW-year 151
IFFOM (Annual interconnection Facility FOM
Net capacity MW 455 Fee) Peso/kW-year 34
Exchange rate USD/PhP 50 Exchange rate USD/PhP 50
Total FOM US$/kW-year 61
Unit Overnight capital cost US$/kW 2,180 Adjusted for availability factor US$/kW-year 67
Note: *Other project cost includes interconnection line upgrade (1320 mil Php), insurance (406 mil PhP), pre-operating expenses (954 mil PhP), development cost (excluding VAT) (494 mil
WaterRock Energy Economics 37
PhP) and VAT and other payments (4026 mil PhP).
Source: Page 36 of Decision on ERC case no. 2014-076RC (Mar 2015)
 Generic Capacity Entry – Solar
Cost of building solar plants will likely continue to drop due to technological
advancement, albeit at a lower rate as share of non-technology cost increase

Cost of Building Solar Plants in Real-term [WaterRock] Comparison of Our Solar Forecast to Others
Average annual solar capital
US$/kW Source Solar Cost Declining Rate
declining rate in real-term:
2021-2023: 0.0% Overnight CAPEX: annual declining rate of 2.4%
900
2024-2030: 1.9% in 2020-2050
800 800 800 2031-2040: 1.5% US EIA (WEO 2020) mid case*
784 FOM: Remain constant at $15/kW-year in 2019
800 768 Post 2040: Constant in real-term
753 739 dollar term.
725 713 700
700 Overnight CAPEX and FOM: annual declining
NREL, 2019 Annual Technology
rate of around 2% in 2018-2030 and 1-2% in
Baseline, mid-case**
600 2030-3050.
Land, other
500 infrastructure and Overnight CAPEX cost: annual declining rate of
development cost
Non-equipment EPC WaterRock Energy 2.6% in 2020-2030 and 1.5% in 2031-2040; FOM
400
cost remains the same at
Balanced of system etc
300
Our forecasted solar cost declining rate is close to the mid-
Inverter
case of the forecast from US EIA (2020) and NREL (2019)
200
Module
*Note: Detailed forecast is from US EIA website https://www.eia.gov/outlooks/aeo/section_issue_renewables.php.
100 The stated starting overnight solar CAPEX cost is $1307/kW in 2019; the higher value could be due to higher solar
Overnight capital cost of module and inverter cost [due to imported tax cost etc] as well as higher land and development cost.
solar (USD/kW) ** NREL Annual Technology Baseline (ATB) forecast is based on medium-case projection from different sources in
0 the literature. Detailed forecast can be found in https://atb.nrel.gov/. The starting overnight solar CAPEX cost is
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 $1100/kW and FOM is $14/kW-year in 2018.

Source: WaterRock Energy Analysis, EIA, NREL WaterRock Energy Economics 38

Generic Capacity Entry – Solar in Luzon
Based on the existing solar projects, the average capacity factor is 16.9
percent for utility-scale solar plants in Luzon

Key Utility-scale Solar Plants in Luzon

DOE
Installed
Organization Name Facility Name WESM Code 2017 2018 2019 2017-19
Capacity (DC
rating)
Absolut Distillers Inc. Lian Solar 3ADISOL_G01 2.0 16% 15% 16% 15%
NV Vogt Philippines Solar Energy Three,
▪ We have used 3-year
Armenia Solar Power Plant 1ARMSOL_G01 8.8 15% 15% 21% 17% data to smoothen out
Inc.
Bulacan Solar Energy Corp. San Ildefonso Solar Power Plant 1BULSOL_G01 15.0 15% 15% 19% 16% weather impact
Energy Development Corporation Burgos Solar Power Plant 1BURGOS_G02 4.2 17% 16% 16% 16%

Energy Development Corporation

Burgos Solar Power Plant-
1BURGOS_G03 2.7 17% 16% 15% 16%
▪ Average capacity
Phase 2 factor of solar plants
First Cabanatuan Renewable Ventures Inc. FCRV Solar Power Plant 1CABSOL_G01 10.3 16% 16% 16% 16%
in Luzon vary from
Enfinity Philippines Renewable Resources
Inc.
Clark Solar Power Plant 1CLASOL_G01 22.3 17% 16% 17% 17% 15-23%
NV Vogt Philippines Solar Energy Four, Inc. Dalayap Solar Power Plant 1DALSOL_G01 7.5 13% 17% 21% 17%
Mirae Asia Energy Corporation Currimao Solar Power Plant 1MAEC_G01 20.0 22% 23% 23% 23%
▪ The average
Next Generation Power Technology Corp. Mariveles Solar Power Plant 1MARSOL_G01 18.0 20% 21% 16% 19% capacity factor based
PetroSolar Corporation Tarlac Solar Power Plant 1PETSOL_G01 50.1 17% 17% 16% 17% on DC rated capacity
RASLAG Corp.
RASLAG Pampanga Solar
1RASLAG_G01 10.0 20% 19% 20% 20% is 16.9% in Luzon
Power Plant
RASLAG Corp. RASLAG II Solar Power Plant 1RASLAG_G02 13.1 18% 18% 18% 18%
Jobin-SQM Inc. Subic Solar Power Plant 1SUBSOL_G01 32.3 14% 17% 11% 14%
YH Green Energy, Incorporated Hermosa Solar Power Plant 1YHGRN_G01 14.5 15% 17% 16% 16%
Valenzuela Solar Valenzuela Solar Energy, Inc. 2VALSOL_G01 8.5 16% 16% 16% 16%
Majestics Energy Corporation Majestics Energy Solar PV Plant 3MEC_G01 41.3 15% 14% 16% 15%
Solar Philippines Calatagan Corporation Calatagan Solar Farm 3CALSOL_G01 63.3 16% 18% 19% 18%
Average Luzon 16.9%

WaterRock Energy Economics 39

Source: DOE, PEMC and WaterRock Energy Analysis
Generic Capacity Entry – Onshore Wind
We assume that overnight CAPEX of onshore wind project is $1500/kW and
FOM is $60/kW-year in 2020

Assumption on Onshore Wind Cost

Source Solar and Wind Cost Assumptions Implied declining rate ▪ Cost of wind projects
can have a large
Overnight CAPEX: from $ 1548/kW in 2018 to $ 1360/kW in Overnight CAPEX: annual variations as they
2025, $1225/kW in 2030, $1112/kW in 2040 and $993/kW in declining rate of around 1.9% in usually require the
2050; 2018-2030 and around 1% in
US EIA (WEO 2020)
FOM: from $43/kW-year in 2018 to $41/kW-year in 2025, 2030-3050; FOM: annual declining
developers to help
$39/kW-year in 2030, $36/kW-year in 2040 and $33/kW-year rate is 0.8-0.9% build and maintain
in 2050. transmission lines
▪ Our assumptions on
NREL, 2019 Annual
Overnight CAPEX: from $ 1360/kW in 2019 to $ 878/kW in Overnight CAPEX: annual wind projects are
2050 in 2019 dollar term declining rate of 1.4% based on our past
Technology Baseline
FOM: Remain constant at $26.22/kW-year FOM: unchanged wind projects in the
Philippines.
Overnight CAPEX: annual
Overnight CAPEX: from $1500/kW in 2020 to $1357/kW in declining rate is 1.5% in 2020-
WaterRock Energy 2030, $1277/kW in 2040. 2030 and 1.0% after 2030 in real-
FOM: remain the same at $ 60/kW-year. term
FOM: remain the same

*Note: Cost of wind is higher than those reported in US, mainly because of smaller wind size in the Philippines.
Source: WaterRock Energy Analysis, EIA, NREL WaterRock Energy Economics 40
d M&A Opportunities
Merger & acquisition opportunities are likely to be sporadic as most of the
“obvious” targets have been divested

Selected M&A activities in 2016-2019 Potential Divestment Opportunities Exist for the
“Stranded” Solar Plants Built in 2016
▪ AboitizPower paid Blackstone $1.2 bn in
2016 Installed
GNPower coal project deal Luzon Visayas Mindanao
Capacity, MW
600
526 No contracts and selling
▪ GIC and Macquarie Infrastructure fund bought
2017
Philippines’ EDC share for up to $1.3 billion 500
17 to WESM. Owners may
want to divest
▪ SMC Power acquired AES coal project for $1 400 226
2018 335
billion 13
300

▪ AboitizPower acquired 60 percent of AC 200 239

2019
Energy’s thermal energy unit 284
100
▪ KEPCO acquired 38 percent in Solar
83
Philippines’s 50 MW Calatagan Solar plant
0
(obtained FIT) With FIT Without FIT

▪ Ayala Corp acquired Phinma Energy There is also a pending regulation to open the
utilities sector to full foreign ownership
WaterRock Energy Economics 41
Source: Public News, WaterRock Energy Research and Analysis