First Gen’s P50-B gas deal to fund geothermal power
First Gen Corp.’s P50-billion gas deal with Prime Infrastructure Capital Inc. will give a major funding boost to its geothermal power business. This, as the firm hopes to hit 13,000 megawatts (MW) of renewable energy by 2030.
Carlos Lorenzo Vega, the firm’s chief customer engagement officer, said that while revisiting the target remains on the table, they still consider the 13,000-MW capacity as its goal.
Currently, the company’s renewable energy portfolio is at 1,651 MW from geothermal, solar, wind and hydropower plants. Its geothermal operations account for the bulk or about 1,289.34 MW of this capacity.
To realize the target in less than five years, Vega said that First Gen would continue banking on the geothermal power segment to accelerate its renewable energy buildup. This, as the technology provides consistent power generation compared to other renewable sources—such as wind and solar, which are intermittent.
“What we plan to do is make sure that we make the most out of the proceeds from the gas sale and put it in geothermal [projects, which are]our 24×7 renewable energy source,” he told reporters recently.
“So we’re looking to beef that up significantly along with the other technologies, but I guess as a priority we’re looking at, focusing on our geothermal portfolio,” Vega added.
He did not mention, however, how much exactly would be allocated to the geothermal business.
Sold 60 percent
Last May, First Gen bared the decision to sell 60 percent of its gas portfolio to the Razon Group’s infrastructure arm for P50 billion. This covers six crucial facilities.
The Lopez-led firm, on the other hand, will continue to hold the remaining 40 percent.
While a big chunk of the firm’s gas interests were unloaded, Vega said gas remains an important part of First Gen’s business, particularly as the company sees it as a crucial transition fuel for renewable energy.
“Gas will still provide the best flexibility and in terms of scale … Batteries are also something that we’re looking at,” Vega said.
Analysts had said earlier that the deal could position itself as a major challenger to the $3.3-billion alliance of energy titans Manila Electric Co., San Miguel Corp. and Aboitiz Power.
