Chevron eyes new geothermal facilities in RP

MANILA, Philippines - Chevron Geothermal Philippines Holdings Inc. (CGPHI) is eyeing the establishment of new geothermal power facilities in the near term, a top company official said.

CGPHI president and general manager Antonio Yee told reporters recently that this complements the company’s overall strategy in line with the passage of the Renewable Energy Act.

“Before the enactment of the RE Act, we were not looking into other areas probably for the last 20 years. We felt then the fiscal environment is not attractive to develop a Greenfield project. But with the RE Act, we are actually very interested in evaluating new prospects given the good fiscal incentives under the RE Act, he said.

Yee said, they would focus on putting up new on greenfield power plants rather than bid for existing geothermal assets.

“In the existing contract with the National Power Corp. in 1971, the arrangement is that we develop and operate the steam field and Napocor owning and operating the power plants. And like what I said earlier, we have not looked into any new prospects since then again because of the regulatory and fiscal environment. But under the RE Act environment that’s an option we’re looking at. So greenfield projects from the development of the steam field and/or owning and operating the power plants as well,” he explained.

Aside from the construction of new geothermal facilities, he said they are also interested to bid for geothermal exploration blocks the Department of Energy (DOE) will offer.

“Maybe what we’ll do is wait for the next geothermal contracting round and see if there is any good prospect. Then certainly we’ll be open and interested,” he said.

The RE law, he said, will propel investments not only for Chevron but will entice other investors to pour in more capital for RE development in the country.

“The RE Act provides good regulatory and fiscal environment, but one critical aspect also for a project to be successful is the resource itself. There needs to be a resource. And the other part (to be successful) is a market. But we think there’s going to be a market as demand will grow and thus the need for additional capacity,” he said.

The Philippine government has embarked on an aggressive development of the country’s energy resources through improved contracting and bidding schemes and enhanced fiscal incentives in pursuit of its quest to increase the country’s energy self-sufficiency.