First Gen pouring in $20B to grow RE portfolio by 2030


FIRST Gen Corp. of the Lopez group is pouring in as much as $20 billion to grow its portfolio to 13 gigawatts (GW), or 13,000 megawatts (MW), by 2030.

First Gen President Francis Giles Puno said in a media briefing after the company held its annual meeting Wednesday that the 13,000MW target capacity is in line with the Department of Energy’s  (DOE) anticipated growth in electricity. The agency has also set a target of 35-percent share of renewable energy (RE) in the power generation mix by 2030 and 50 percent share by 2040.

“As a response to this need, we are diligently working towards significantly growing our portfolio to 13GW by 2030, aiming for a majority of this capacity to be powered by renewables,” said Puno.

FGen currently has around 3,500 MW of installed capacity in its portfolio, which account for 19 percent of the country’s gross generation.

The company plans to grow its gas capacity by 2,000MW from 2,017MW, solar by 1,500MW from 12MW, wind by 5,100MW from 150MW, geothermal by 700MW from 1,182MW; hydro by 300MW from 134MW; and BESS to 40MW by 2030.

He explained they were putting it as a 2030 target “because we’re aligning it with the DOE’s forecasted demand. If the government is saying this is the demand growth, then we’ll have to keep up with that demand growth. It is aligned with that.  But more importantly for us, we’ll have to have an organization and an initiative on all our platforms to be able to address that expected demand of energy in the country by 2030.”

FGen, which has ditched coal power plants since 2016, has lined up a number of RE projects to support its 13,000MW target.

During the company’s annual stockholders’ meeting, Puno announced the planned construction of 1GW wind power plants on existing onshore wind concessions as soon as the National Grid Corporation of the Philippines (NGCP) completes the necessary grid developments.

Also, the company will put up 3GW off-shore wind concessions in the Guimaras-Iloilo Negros Occidental area by 2030. Moreover, the potential for a 100-MW solar farm in the Leyte geothermal sites and a 30-MW wind farm in the Burgos site is being studied.

For hydro, First Gen said the  100-MW Aya pumped-storage hydro power project is scheduled to start construction in the third quarter of  this year. The project will supply ancillary services to the grid and is designed to pump water from its reservoir to its upper reservoir for storage when there is excess electricity at low cost. The stored water is then released back to the lower reservoir to generate electricity when demand increases.

First Gen is also undertaking predevelopment activities for run-of-river projects, including the 32-MW Bubunawan, 33-MW Tagoloan, 30-MW Puyo, and 39-MW San Isidro projects.

It also inaugurated the 3.6-MW Mindanao 3 Binary power plant project in Kidapawan last April 27 as part of its RE portfolio expansion. Meanwhile, the construction of the 28.9-MW Palayan Binary project is ongoing, with plans to start commercial operations in September.

The company has secured two RE service contracts for solar and wind from the DOE at  end-2022. This year, it was awarded with 14 more service contracts.

“We will focus on pursuing the activities we committed to under our agreed work program with the DOE,” added Puno.

To support these RE projects, FGen is developing three battery energy storage systems (BESS) adjacent to its geothermal sites in Bacman, Southern Negros, and Tongonan. A fourth BESS in Northern Negros will follow shortly after. Once completed, these BESS projects will optimize the existing geothermal resources and provide ancillary services to the grid.

First Gen has programmed a capital expenditure (capex) of $1.1 billion this year. The amount, according to First Gen Chief Financial Officer Emmanuel Singson, will be financed via a combination of internally generated funds and debt.

Of the amount, $526 million was already spent for its bid to acquire the 165MW Casecnan hydroelectric power plant in Pantabangan, Nueva Ecija.

“Casecnan, fundamentally, is a very important asset for us because we obviously have Pantabangan-Masiway there. We have the plans for project Aya, which is there. So, we really needed to make sure that the reservoir is controlled by First Gen.

“Casecnan is upstream and to the extent that we could supplement even more supply coming from the upstream side of Casecnan, then that will help Pantabangan-Masiway and project Aya,” explained Puno.

Singson said $403 million of the capex will be utilized by FGen subsidiary, Energy Development Corp. (EDC), to grow its geothermal portfolio and finance the planned BESS.

“The 2023 capex total for everybody is about $585 million; $403 million of that, to be exact, is for EDC. So, that’s the geothermal, BESS and everything. Also, $90 million of that is for LNG (liquefied natural gas) project to complete it by September this year. We also have $50 million of that is with our Aya pump storage project. The rest is for small capex in our gas plants,” said Singson.

First Gen and Tokyo Gas partnered in 2018 to develop the Interim Offshore LNG Terminal to be built at the First Gen Clean Energy Complex in Batangas City, Philippines. The LNG terminal is scheduled for commissioning in the third quarter of this year.

Image credits: Contributed photo