Major investment in RP energy sector

Global group invests in RP geothermal plant

Reuters

A group of American, Australian, Spanish and Filipino investors have committed to invest $300 million to develop a 40 megawatt geothermal power plant in a southern Philippine province, a representative of the group said.

The group, called Guidance Management Corp (GMC), will initially spend $8 million to conduct geological surveys before drilling exploratory wells at the Amacan geothermal prospect in Compostela Valley province in the southern Mindanao region, Joaquin Rodriguez, GMC’s chairman, told reporters on Thursday.

“We will spend roughly around $300 million to develop the initial 40 MW capacity of the area, but we’re hoping that it could be more than 40 MW,” Rodriguez said.

The Energy department has awarded GMC a 50-year contract to explore geothermal projects in an area totaling nearly 47,500 hectares in Compostela Valley.

The Philippines, the world’s second-largest producer of geothermal energy after the United States, has 22 active volcanoes and sits on the seismically active Ring of Fire.

The country has an installed geothermal capacity of slightly more than 1,900 MW, but the government estimates the Philippines has untapped geothermal resource of at least 2,600 MW.

The Philippines wants to raise its geothermal capacity to 3,131 MW by 2013.

Geothermal power currently accounts for around 18 percent of the energy needs in the Philippines.

Energy Secretary Angelo Reyes said studies from the U.S. National Renewable Energy Laboratory have shown the Philippines’ geothermal resources has a capacity to generate 200,000 MW of power.

GMC also operates two coal mining projects in the central province of Negros, holds a geothermal service contract in the northern Kalinga province, and a $150 million biofuels project.

Another company that received a service contract from the government on Thursday was Basic Energy Corp, which will explore geothermal prospects in Mabini, Batangas province south of the capital.

The Mabini project, covering 3,841 hectares, has an energy resource that could possibly fuel a 20 to 40 MW power plant.

A third company, Biliran Geothermal Inc, has plans to spend $15 million to develop a geothermal project covering 22,394 hectares in the central Visayas region. The area is estimated to have at least 100 MW of geothermal energy.

Growing concern about greenhouse gas emissions released by conventional power plants, high oil prices and growing power demand have fuelled the popularity of geothermal power.

Source: ABS-CBN News Online, http://www.abs-cbnnews.com/storypage.aspx?StoryId=124782, July 10, 2008