DOE to award new geo, hydro contracts by May 2021

Danessa Rivera (The Philippine Star) - December 22, 2020 - 12:00am
https://www.philstar.com/business/2020/12/22/2065410/doe-award-new-geo-hydro-contracts-may-2021

MANILA, Philippines — The Department of Energy (DOE) is eyeing to award new geothermal and hydropower contracts under the third round of the open and competitive selection process (OCSP 3) by May 2021.

In the bidding process, the DOE has allowed foreign contractors to bid for geothermal prospects, as exploring and developing these areas have a high risk and is capital-intensive.

In a virtual briefing yesterday, DOE-Renewable Energy Management Bureau (REMB) director Mylene Capongcol said the OCSP 3 guidelines would be published by Dec. 30.

“We expect by April that we can identify the winning bidders. Hopefully by May, the contracts would be signed by the secretary,” she said.

Under the third round, the DOE identified five geothermal areas with a combined capacity of 87 megawatts (MW) and 17 hydropower areas with a total of 65.4 MW capacity.

“In the OCSP, parties are bidding in a predetermined area. They will be evaluated based on technical and financial, and will be recommended for approval,” Capongcol said.

Of the five geothermal projects, foreign investors can bid for Area 1-Daklan Geothermal Project with potential capacity of 27 MW, Area 3-Puting Lupa Geothermal Project with 17 MW and Area 5-Mt. Labo Geothermal Project with 30 MW.

The DOE said these areas are open to foreign owned corporations under financial or technical assistance agreement (FTAA) applications since these are large-scale exploration, development and utilization of geothermal resources with an initial investment of $50 million.

Capongcol said no foreign investor has expressed interest in the geothermal projects. “We haven’t received any interest from foreign investors yet, but we received letters of intent from local companies,” she said.

In the circular launching OCSP 3, the DOE said the “exploration, development and utilization of these PDAs for RE resources would significantly contribute to the energy supply requirements of the Philippines.”

The OCSP will be declared a failure if no renewable energy application was received within the period allotted or if none passed the legal, technical and financial requirements. The DOE will then open the PDAs for direct applications.

Some of the areas being offered under the latest OCSP were failed bids in the previous offer.

In February 2015, the DOE offered 21 renewable energy sites under OCSP 2, four of which are geothermal sites with aggregate potential capacity of up to 134 MW and 17 are hydropower sites with capacity of up to 733.4 MW.

The agency only received eight offers for two geothermal concession areas and 31 proposals for 14 hydropower deals in May the same year.

The DOE has also declared a bidding failure for three hydropower projects and two other geothermal sites, which had no bid proposals.

Under the service contracts, the winning bidders will have two years for pre-development for less than 50 MW and five years for at least 50 MW.

It also covers a 25-year development stage, which can be renewed for another 25 years.