EDC to build lower-capacity Northern Negros geothermal plant

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WEDNESDAY, 13 JULY 2011 18:02 PAUL ANTHONY A. ISLA / REPORTER

LISTED Energy Development Corp. (EDC) said on Wednesday the Northern Negros geothermal power plant can be sustainably operated at between 5 megawatt (MW) and 10 MW.

“We have come to this conclusion after two prolonged testing periods, which we conducted from May 2009 to November 2010, and from April 5, 2011, to June 30, 2011, as well as from our analysis of completed surveys and technical data,” Richard Tantoco, EDC president and chief operating officer, said.

The EDC official said they are also considering transferring the facility to another site where there is sufficient steam supply.

“With these findings, EDC is required to make a final provision for the impairment of the project’s remaining book value. The P5.1-billion impairment charge is a noncash transaction and with EDC’s over P9 billion in unrestricted retained earnings, this will not affect our ability to declare dividends,” Tantoco explained.

He said that there is high temperature in the area and that the temperature increases towards the buffer zone, a fact first established by a 1995 study funded by Japan’s Overseas Economic Cooperation Fund.

Tantoco said the company’s technical experts measured 285 degrees Centigrade at the buffer zone, while the cutoff for commercial temperature for a power project is only 220°C.

“But while there is temperature, further study indicated there is low permeability and that calcification or mineral scaling inside the well-bore is causing the low production,” he added.

The EDC said experts from New Zealand and the US were to study the area and validate the findings of the company’s geoscientists that the area is challenging and has permeability concerns.

Tantoco said the management is carefully studying all available options to increase steam production from the geothermal resource.

EDC owns and operates geothermal steam fields and power plants in Leyte, Negros Island, Bicol and North Cotabato.

Last year the EDC completed its acquisition targets when it won the bidding for the Bacman geothermal plants in Bicol. The Bacman plants are programmed for commissioning this quarter after fast-tracking rehabilitation works.

“Because we are committed to delivering power to the Visayas grid, we shall immediately begin to take steps to right size the Northern Negros geothermal power plant,” Tantoco said.

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In Photo: Top executives of the Energy Development Corp. including (from left) chairman emeritus Oscar Lopez, chairman and chief executive Federico Lopez, and director Francis Giles Puno, join president and chief operating officer Richard Tantoco (third from left) inform shareholders that they have decided to right-size the 49-megawatt (MW) Northern Negros Geothermal power plant to a 5-10 MW power plant instead.  (Paul Anthony Isla)