By Lenie Lectura - October 3, 2019
Geothermal industry stakeholders
gathered Tuesday to discuss how the Philippines can attain additional
geothermal capacities after the country’s ranking dropped to third as the
world’s largest geothermal producer.
After many years of placing second
in the world ranking, the Philippines now ranks third after Indonesia. The
United States of America occupies the top slot.
Department of Energy (DOE) Assistant
Secretary Robert Uy, in his keynote speech during the First Philippine
International Geothermal Conference held in Taguig City, noted that the
country’s attractive geothermal areas are already developed.
The Philippines, he stressed, is
known for hosting world-famous facilities like the Tongonan Geothermal Project
(700 megawatt) in Leyte and the MakBan Geothermal Projects (490 megawatt) in
Batangas. Aside from the Nasulo geothermal power plant and Maibarara geothermal
power plant, there were no significant developments realized since the
enactment of the Renewable Energy (RE) law in 2008.
Even with the very large potential
of the country in terms of geothermal resources, Uy said, there are still
glaring reasons for the decline in geothermal investments: lack of potential
investors who are willing to take the risk, unattractive incentives package
compared to other countries, a privatized energy sector and tedious permitting
processes.
“I look at this as a challenge for
us to continue exploring geothermal energy sources locally, especially now that
we are at the crossroads of balancing our energy needs and responsible
utilization of energy resources with respect to the environment,” he said.
“It is also the main reason why we
are all here today. For that, we thank the National Geothermal Association of
the Philippines [NGAP] headed by its president, Joeffrey Caranto for organizing
the first-ever Philippine Geothermal International Conference,” Uy added.
“We do hope that through events like
this, we will have more avenues to discuss where we are now and what can we do
to get to where we want to be years from now. Let us proceed to the third wave
in Philippine geothermal growth,” said the DOE official.
Caranto, who is also the assistant
vice president of the country’s largest geothermal producer Energy Development
Corp. (EDC), for his part said that one of the geothermal industry’s biggest
hurdle is tariff.
“Tariff obviously is a big hurdle
because we don’t have FiT [Feed-in-tariff] in geothermal” unlike in
other RE sources, such as solar, wind, hydro and biomass. FiT is an incentive
provided to RE developers.
Caranto cited other hurdles.
“There’s a lot of hurdles on infra, transmission line especially up in the
mountains, civil works, security. Also, one setback of the RE law and
deregulation is that we don’t have long-term PPAs [power purchase agreements]
anymore. If you look at Indonesia, they can sign up PPA contracts up
to 25 years. They also have a lot of incentives that help the
private industries develop geothermal.”
EDC President Richard Tantoco urged
industry stakeholders “to be bold, to experiment and innovate in order to
discover new things” notwithstanding the risks involved.
“We need to take risks in order to
gain the reward. We need to be ambitious. The geothermal industry needs to have
aggressive ambition in order to grow. Geothermal is needed because it’s 24 by 7
power,” he said in his speech.
A geothermal player normally spends
between $30 to $50 million just to explore potential geothermal resources. It
cannot recoup its investment should exploration work turns out unsuccessful.
The DOE official, therefore,
suggested during the conference to look into sources that are beyond
conventional like medium to low enthalpy and acidic geothermal energy source.
“The DOE is also procuring MT
equipment for geophysical surveys. With this and the technically capable
personnel from the Geothermal Energy Management Division, the DOE has now the
capabilities to conduct preliminary exploratory studies that can prequalify
geothermal areas and significantly reduce the resource risk. With this lessened
risks, we envision that investing in geothermal energy development will be more
palatable for both local and international developers,” Uy added.
“Rest assured that the Department of
Energy will study on how the government sector can provide assistance to the
development of such sources through both fiscal and non-fiscal incentives,” he
said.
Caranto said the industry is closely
coordinating with the DOE “to come up with some sort of regulations or
incentives that will also help the industry.”
“For the last 15 years, there’s not
so much geothermal developments. If you look at our energy mix, you cannot find
other renewable that’s baseload other than hydro and geothermal.
If you look at conventional energy
resources, they’re very expensive, he pointed out. They’re up in the mountains,
Permits are very difficult to obtain.
But if you look at nonconventional,
low temperature…they’re closer to communities, lower elevation areas.
Economically, it’s easier to develop and it’s nearer to transmission lines.
Everywhere else in the world, they’re developing low enthalpy systems, why are
we not doing it? Because we’re focusing on high temp systems because it’s how
we started. We are good in that area,” the EDC official pointed out.
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