SM’s geothermal unit wins contract auction

Philippine Geothermal Production Co. Inc. (PGPC), a unit of the Sy family’s SM Investments Corp., emerged as one of the winning bidders in the government’s fifth round of open and competitive selection process (OCSCP-5) for renewable energy projects.

Based on OCSP-5 results posted by the Department of Energy (DOE), PGPC won the Southern Leyte project, with a potential capacity of 25 megawatts (MW).

This would add to the group’s growing geothermal prospects, which include exploration activities in Daklan in Benguet, Baua-Sikaw in Cagayan, Mt. Labo in Camarines Norte and Mt. Malinao in Albay as well as Kalinga and Southwest Kalinga.

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.

Operations in Tiwi began in 1979, which the firm said “ushered in the birth of the Philippine geothermal energy industry.”

PGPC also expressed earlier its desire to penetrate the Mindanao market.

Geothermal energy is crucial to the Philippines’ target of increasing the share of renewables in the power generation mix, as it is the only clean energy source that can run around the clock.

Derisking

To further support the development of geothermal capacity, the government has launched a derisking facility, envisioned to cost-share exploration drilling with qualified companies.

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The exploration and drilling stage is considered the most risky part of the business, as players need to be ready and cough up about $10 million to $12 million per well, with no assurance of commercial geothermal resource.

Meanwhile, the DOE also announced Almanapower Corp. as the winning bidder for three hydroelectric power projects. Sara Philippines Holdings Corp. likewise won a project, the San Isidro wind power facility.

Under the OCSP-5, the DOE offered 11 predetermined areas for renewable energy development.

However, the agency said it did not receive applications for four hydroelectric and one geothermal projects.