Nikkei Asia and several news agencies have reported that Mitsui Bussan (a.k.a. Mitsui &Co. Ltd.), a major Japanese trading company, plans to build a PV power plant in the Philippines. It will be Mitsui’s first utility-scale PV project in Southeast Asia.
The PV power plant will be a joint venture between Mitsui Bussan and local independent power producer Global Business Power (GBP). It will be located in Rizal, a province within the island of Luzon. The total investment in the project is currently projected to reach around JPY 7 billion (or USD 64.4 million). Mitsui is expected to cover about 40% of the development cost.
Scheduled for completion in March 2022, the PV power plant will have a generation capacity of 115MW. A 20-year power purchasing agreement has been arranged with Manila Electric Company (a.k.a. MERALCO), which is not only the largest utility in the country but also the parent company of GBP.
GBP’s existing power plants burn either coal of fuel oil. Therefore, Mitsui Bussan, which is a part of Mitsui Group, will be providing the expertise related to solar PV. Several subsidiaries of Mitsui Group are involved in the supply chain for PV products. Regarding experience, Mitsui Bussan has worked on distributed generation projects in China and utility-scale projects in the US and Mexico.
According to Nikkei Asia, the Philippines, which has a population that exceeds 100 million, will be showing the largest demand growth for power among Southeast Asian countries.
The data from the US International Trade Administration reveal that coal, natural gas, and petroleum-based fuels respectively accounted for 47%, 22%, and 6.2% of the energy mix of the Philippines in 2020. While the government of the Philippines is not focusing on a complete transition to clean and renewable generation, it wants the country to be more energy self-sufficient. Hence, Mitsui and GBP are banking on a significant rise in the local demand for solar PV in the future.
Mitsui Bussan is currently phasing out businesses related to fossil fuels from its business portfolio. Besides solar PV, the company is also developing wind projects around the world. This February, Mitsui and its partner Total Eren commenced the operation of the 97.2MW Vientos Los Hércules Wind Farm in southern Argentina. The company has also announced that it will be selling its coal-fired power plants located in Southeast Asian countries. Mitsui’s Medium-Term Management Plan calls for raising the ratio of renewable energy (including hydropower) from the current level of 15% to 30% by 2030.