Increased Opportunities for Private Sector Participation in Geothermal Field Development in the Philippines

Abstract

The Philippines continue to pursue its goal of energy self-reliance through the development of indigenous energy resources.With vast resources of geothermal energy, the Philippines is one of the leaders in geothermal energy development and utilization particularly in electricity generation. Major policy refarms in 1987 and 1990 set the national policy of allowing private sector participation to construct and operate electric generating plants and sell its power to the grid. Likewise authorizing the financing, construction, operation and maintenance of infrastructure projects by the private sector, brought about dramatic increase in geothermal plant capacity addition of about 734.39 MW. On the other hand, enactment of Electric Power lndustry Reform Act (EPIRA) in 2001 resulted to the construction of the first merchant power plant in the Philippines. Under this scheme, this plant will sell directly lfs electricity to large scale consumers and cooperatives.

On March 11, 2004 and August 31, 2005, the First Geothermal Contracting Round (GEOTHERMAL 1) and the Philippine Energy Contracting Round (PECR) were launched, respectively. This is a new approach on granting new Geothermal Service Contracts through a more transparent and competitive approach. These events are aimed at promoting investment opportunities in the Philippine geothermal industry. The first contracting round resulted to three bids submitted by Marubeni, Mitsui and CPI while the PECR bid submission deadline was set November 2005.