Philippine Country Update: 2005-2010 Geothermal Energy Development

Abstract

Major developments and activities have taken place in the Philippine geothermal industry during the past five years, specifically in the corporate and policy fronts. These include the takeover by Chevron Geothermal Philippines Holdings, Inc. (CGPHI) of Unocal Philippines’ geothermal steamfield operations in 2005, full privatization of PNOC-EDC (now know as Energy Development Corp. or EDC) in late 2007, and the sale of National Power Corporation’s (NPC) geothermal power plants in Tiwi and Makiling-Banahaw to Aboitiz Power Renewables, Inc. (APRI) in 2008, and the Tongonan I and Palinpinon I/II power stations to EDC in September 2009. Furthermore, the Renewable Energy Bill was signed into law in late 2008, and went into effect in July 2009, providing legal definitions and financial and non-financial incentives to further develop all renewable sources of power, including geothermal.
Only EDC’s Northern Negros Geothermal Power Plant (49 MWe) was commissioned in the last five years, although several small optimization schemes and plants in existing facilities were installed to raise the level of generation in these specific units. The installation of the Leyte optimization schemes and the rehabilitation of the NPC plants in Tiwi and Makiling-Banahaw prior to the sale, plus the commissioning of the Northern Negros plant should have significantly increased the country’s installed capacity, however, these were offset by the decommissioning of 1 unit in Tiwi with an installed capacity of 110MWe. Presently, the country’s total installed geothermal generation capacity stands at 1,902.32 MWe, accounting for 12% of the nation’s total electric power supply. The relatively high availability of the geothermal plants resulted in the delivery of 10,311 GW-hrs of generation, or 17% of the nation’s electricity production. The current global financial crisis has affected plans and programs on geothermal development. Expansion programs in most EDC-owned operating steamfields, scheduled even before full privatization, have been deferred until the full impact of the crisis is assessed.
These “setbacks” notwithstanding, the future for geothermal energy development looks promising. The NPC is set to privatize its remaining geothermal power plants in Bacon-Manito. The deferred expansion programs are expected to be back in the pipeline and go full-scale in the short-term. Moreover, new players have entered the geothermal development scene; the DoE awarded four service contracts (three via the Philippine Energy Contracting Round, PECR) in new areas. Detailed exploration activities are now being carried out in these prospects. With all these in the horizon, plus the incentives embedded in the RE Act, the Philippines is looking forward to an even more vibrant geothermal energy sector.