Re-emergence of extreme commentary and sentiment, page-9

The economics are not as bad as indicated:

Have a look at Meralco's 9 month report.  (page 5 - para 4). Average WESM purchase price (so will be volume weighted, but may not be base load as they say on pg 9 that 13% of load is sourced from WESM ) is 4.34 pesos/kwh (8.5 US cents/kwhr) but increasing to above 5 pesos/khwh. Their own generation cost is put at 4.63pesos/kwh.

http://corporate-downloadables-sec-...09106075.1c9ef211df084632f1831358fa5b5b33.pdf

They also report a gas purchase price of  $7.11/GJ. or close to $7.50/mmbtu. This compares to landed spot LNG in Japan of just under $6/mmbtu.

http://www.meti.go.jp/english/statistics/sho/slng/result/pdf/201709-e.pdf

Assume 33% efficiency on the OCGT  then variable cost is 6.1 US cents per kwh or 3.1 pesos/kwhr. Obviously the economics will improve when the steam turbine is added but on these number there is a contributing margin (perhaps not enough to make a profit) to be paid by running the GT by itself.

They state the coal price is now $83MT - (I dont know the heat rate from their coal), but that it is up from $56MT for the same period in 2016, which obvuosly should have an impact on spot rates - especially if coal generators are the price setters.

None of this means EWC is a buy - execution is still required if they are to prove the company is not a builder of white elephants - but the potential economics justify the attempt.