As Manila Electric Company (Meralco) cements its path back into power generation, company executives noted that they will be initially looking at traditional fuel technologies such as coal and natural gas for investment forays.

“The primary aspiration is to contain the cost of power which would mean most likely that the focus will be towards more traditional fuels for power generation – and clean coal would be the most competitive,” Meralco senior executive vice president and COO Oscar Reyes said.

While they are also looking at natural gas as an option, Reyes noted that fuel availability has to be taken into consideration; as well as the timing when additional supply of gas can be brought to market.

Meralco president and CEO Manuel V. Pangilinan added that the leaning toward the more conventional fuels has been anchored on realities that there’s really not much project opportunities now for renewable energy (RE) that can address the short-term power supply needs of the country.

“In renewables, there’s not really much that can be made available, like there’s not really much hydro, while geothermal has longer gestation period. Biomass could be an option, but the proportion of generation is limited,” he stressed.

The timing as to when Meralco needs additional supply would be at the anticipated crossover of supply and demand by 2013; and that the capacity shoring up it needs in the short term may hover at 600 megawatts. The company qualified though that such must be set on stream or be integrated into its supply chain in phases.

Reyes further emphasized that Meralco will definitely be setting its sights on renewables, but something that they would have to do “on a broader perspective to ensure that we are bringing into the system a power that consumer can really afford.”

Pangilinan stressed that volatile prices at the Wholesale Electricity Spot Market (WESM) has so far moved them to rationalize their supply sourcing strategies, hence, the plans being firmed up now for them to revert into power generation.

“If you would want to ease pricing pressure from WESM, you really need to create more supply in order to moderate increases in generation charge, so we have to put our own to be able to supply more power, otherwise, in the short term, you’ll see these rates still going up,” he said.

The company executives indicated that there have been whole ranges of opportunities for them to invest in power facilities, noting that various parties are already approaching them for potential tie-up.

“We are talking to all of them …we’ll look at the whole range (of opportunities), but we’ll do it in stages. I think that coal will be in consideration for consumers to have cost-competitive power…eventually, we will also be looking at renewables,” Reyes added.