SM’s electricity subsidiary revs up expansion
Philippine Geothermal Production Co. Inc. (PGPC), a unit of the Sy family’s SM Investments Corp., hopes to become a bigger player in the local market as it pursues a multibillion-peso expansion, including six new sites.
With a funding of P3 billion for initial exploration activities this year, PGPC has set its eyes on the following areas: Daklan in Benguet, Baua-Sikaw in Cagayan, Mt. Labo in Camarines Norte, Mt. Malinao in Albay, Kalinga and Southwest Kalinga.
PGPC president Napoleon Saporsantos told reporters that drilling activities have already begun for sites in Mt. Labo and Mt. Malinao.
Developing these areas would take five to seven years, he said.
Once these are up and running, PGPC is targeting to unlock about 250 megawatts to 400 MW of additional geothermal power capacity.
Currently, the firm is operating geothermal steamfields in Tiwi, Albay, and Mak-Ban spanning across Laguna and Batangas. The combined capacities of these facilities are nearly 700 MW.
PGPC has also expressed its desire to penetrate the Mindanao market.
While the company’s operating income is sufficient to support its growth expansion, Saporsantos said PGPC is open to pursuing fundraising activities or welcoming partners to build larger projects.
He added that PGPC would take advantage of the government’s derisking facility, envisioned to cost-share exploration drilling with qualified companies.
The exploration and drilling stage is considered the most risky part of the business. Companies need to cough up about $10 million to $12 million per well, with no assurance of commercial geothermal resources.
Saporsantos said geothermal energy’s importance is highlighted now, given the war in the Middle East that has been causing fuel supply disruptions and price shocks.
“[We’re] making sure that we’re operating optimally … and keep[ing] the steady supply of locally generated power will avoid any imports,” he said.
He said geothermal energy producers are not allowed to conduct a temporary shutdown until the Middle East situation has been resolved.
