MGen’s $4b Terra Solar plant to aid Philippine RE transition

It will deliver power to 2.4 million houses and cut emissions by 3.6 million tonnes yearly.

Meralco PowerGen Corp. (MGen) expects to lead the energy transition in the Philippines with what could be the world’s largest solar farm — its $4b Terra Solar project north of the capital.

The 3,500-megawatt (MW) facility in the provinces of Nueva Ecija and Bulacan is expected to be a cleaner alternative to a mid-merit fossil fuel plant, which adjusts its power output as demand fluctuates throughout the day.

“Given the size of Terra Solar, and if our [completion] timeline is by February 2026 and we can prove that this setup can actually be a replacement for mid-merit fossil, then I think we will have achieved a certain aspect of that vision,” MGen President and CEO Emmanuel Rubio told Asian Power.

The first phase of the project, which also features a 4,500 megawatt-hour energy storage system, is expected to be finished by February 2026, and the second phase in 2027, providing electricity to about 2.4 million households and cutting carbon emissions by 3.6 million tonnes a year.

MGen unit SP New Energy Corp. (SPNEC) is taking control of Terra Solar, which used to be a joint venture between Prime Infrastructure Capital, Inc. and SPNEC parent company Solar Philippines Power Project Holdings, Inc.

Rubio said the company has issued an invitation to bid for the engineering, procurement, and construction for the east and west sides of the projects’ 2,500-MW first phase. This will cover both photovoltaic sites and battery storage facilities.

“The intention of Terra Solar is to deliver a block of 850 megawatts of pure renewable energy (RE) starting at 8 am and ending at around 9 pm,” he said. “At the rate that we actually have sold this to the offtaker, it's proving that a combination of variable renewable energy and a form of energy storage — in this case, lithium ion batteries — is already very competitive to traditional thermal mid-merit plants,” he added.

Earlier, MGen parent Manila Electric Co. (Meralco) signed a 20-year power supply deal with Terra Solar for its 850-MW mid-merit requirement.

MGen and SPNEC have also signed a deal with global investor Actis to invest in a 40% stake in the project. Terra Solar shares worth $600m will be issued to the UK-based firm. The proceeds will be used to jointly develop and expand the project.

Rubio said that the transaction is the largest single investment in infrastructure development in the Southeast Asian nation.

“It's not just a vote of confidence to the project, but a vote of confidence to the country as this is the first time Actis, a major player at that, is investing in the Philippines,” he said.

Wind opportunities

Terra Solar has a lot to do before 2026. Land acquisition continues, but Rubio said most of the land needed for the first phase has been acquired. The company has also secured a significant portion of the transmission towers it needs.

In terms of logistics, coordination is needed to ensure that materials such as solar panels and batteries will be delivered from ports to the project site. Roads will have to be built to support this, which will also benefit the communities near the plant, Rubio said.

The company is also filling up critical positions for the project, such as those focused on community relations.

Rubio said they would hire as many as 20,000 workers from Nueva Ecija and other areas  to develop the project.

Whilst Terra Solar will keep the company busy in the coming years, MGen is also working on other renewable energy projects, including a joint venture between MGen unit MGen Renewable Energy, Inc. and Vena Energy for solar and wind development.

MGen is also looking into opportunities in offshore wind with certain developers.

“We want to make sure that if we are to participate in offshore wind, that the price is reasonable, both for the consumer and the developer,” Rubio said. “When the sweet spots arrive, then I think it's time for us to seriously consider offshore wind.”