Manila Times.net
ENERGY Development Corp. (EDC) plans to scale down its Northern Negros geothermal plant after studies found that it could not be operated at its full capacity.
During the company’s stockholders’ meeting, Richard Tantoco, EDC president and chief operating officer, said they would run the Northern Negros plant at between five and 10 megawatts because of technical constraints.
“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 studies,” he said.
Located in Bago City in Negros Occidental, the said plant is the first fully owned power-generating facility of EDC, the country’s largest geothermal energy developer.
Completed in 2007, the plant was constructed by Japan’s Kanematsu Corp. through a $68.5 million loan provided by the Japan Bank for International Cooperation.
The 49-megawatt plant has been besieged by uncontrolled calcite clogging of its geothermal wells, preventing them from releasing steam.
As a result, the plant has incurred losses of around P4.8 billion since it started operations.
Tantoco said the company would have to set aside a final provision for impairment of the project’s remaining book value.
“The P5.1 billion impairment charge is a ‘non-cash’ transaction and with EDC’s over P9 billion in unrestricted retained earnings, will not affect our ability to declare dividends,” he added.
Despite the limited output from its Northern Negros plant, the company plans to study all options to increase steam production from the geothermal wells in the area.
EDC owns and operates geothermal steam fields and power plants in Leyte, Negros Island, Bicol and North Cotabato.
Its shares rose to P6.94 on Wednesday from P6.88 on Tuesday.
EUAN PAULO C. AÑONUEVO
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