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MANILA - Meralco has signed a power supply agreement with the operator of the methane-fired generating plant in the Payatas landfill.
Under the agreement signed with Pangea Green Energy Philippines Inc., Manila Electric Co. will purchase power from a methane plant for two years under a take-and-pay arrangement.
The power rates from the supply deal will be based on time-of-use rates to be approved by the Energy Regulatory Commission, which will also have to approve the agreement.
Aside from allowing it to use clean energy, Meralco said customers will benefit from reduced exposure to volatile electricity prices at the Wholesale Electricity Spot Market.
Also, as a take-and-pay deal, the agreement does not carry a capacity fee or charges for projected demand to ensure availability of supply although electricity use may not actually meet this projection.
The two parties' supply agreement will also not entail additional transmission costs since Pangea's plant is located within Meralco's franchise area.
Located in Area 2 of Barangay Payatas in Quezon City, Pangea's P200 million plant harvests biogas emissions from the Payatas dump site and converts this into electricity.
The biogas project is the first registered CDM project in the Philippines on municipal solid wastes handling and disposal.
Borne from the Kyoto Protocol, which aims to lower global greenhouse gas that is said to be the culprit behind climate change, the CDM is a mechanism whereby "green" projects that displaces carbon emissions can earn "credits," which in turn can be sold to industrialized nations who have to maintain emission reduction quotas.
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