ILAGAN CITY–San Ignacio Energy Resources Development Corporation (“San Ignacio”), part of the Nextnorth Energy group, which is developing over 450 MW of solar PV (photovoltaic) and hydro projects in Northern Luzon, has recently signed a Solar Energy Operating Contract with Secretary Raphael P. M. Lotilla of the Department of Energy kicking off the process to develop a 440 MWp/336 MWac solar PV project in Ilagan City, Isabela province.
In parallel, San Ignacio has reached an agreement with Total Eren S.A. (“Total Eren”) to invest in the project through San Ignacio, making in it a Filipino-French joint venture. Total Eren is a renewable Independent Power Producer (IPP) with over 3.7 GW of wind and solar PV projects under construction or in operation globally.
In the Philippines, Total Eren has already invested in a 60 MWp operating solar PV project in Tarlac province. Total Eren, which counts French multi-energy company TotalEnergies as one of its strategic shareholders, brings extensive experience in the development, financing, construction, and operation of renewable energy power plants globally, together with a strong commitment to the Philippines market.
The project, which will be among the biggest in the country, will be built on around 400 hectares of available land along the Northern Luzon high voltage transmission network of the National Grid Corporation of the Philippines (“NGCP”). The project, which will bring an estimated PHP 18 billion in investment, is scheduled to start construction in 2024 and feed electricity into the grid in 2025.
During its construction period San Ignacio will provide employment to roughly 4,500 workers. With an expected electricity generation of around 700 GWh per year, San Ignacio can supply 1 million Philippine households with clean, renewable energy.
The new administration has set ambitious goals to achieve 35 percent renewable energy by 2030 and 50 percent by 2040. This compares to a current share of renewable energy of 22 percent. To achieve this, the administration has, among other measures, changed the annual increase in renewable energy use for on-grid areas under the Renewable Portfolio Standards (“RPS”) from 1 percent to 2.52 percent starting in 2023. At one Renewable Energy Certificate (“REC”) per MWh, San Ignacio’s annual output will generate around 700,000 RECs per year which market participants can acquire to comply with their RPS obligations.
Recently, electricity prices in the Philippines have skyrocketed due to the increasing import price of coal and a falling peso. Meeting or exceeding the administration’s renewable energy goals will help make Philippine households less vulnerable to rising costs caused by international developments. Regionally power rates have increased to as high as 21 peso per kWh.
President of San Ignacio Miguel Mapa said: “As we now more than ever, realize the importance of indigenous, stably priced, and low-carbon energy sources, we at San Ignacio are motivated by the scale of the positive impact our project will bring once energized. We are likewise pleased to be working with Total Eren, an experienced renewable energy player
active globally, and are grateful for their confidence to invest in our country’s renewable energy story, which will have an immeasurable impact on the generations of Filipinos to come.”