MANILA, Philippines — Listed miner Nickel Asia Corp. is set to start commercial operations of its first geothermal power project under unit Emerging Power Inc. (EPI) within the year as it moves to grow its renewable energy business.
The company is in the process of securing power supply agreements (PSA) to proceed with the development of the first five megawatt (MW) plant in Biliran, Leyte, according to its annual report filed with the Philippine Stock Exchange.
The power project is covered by the 25-year geothermal service contract held by Biliran Geothermal Inc. (BGI), which is 60 percent owned by EPI and 40 percent owned by Biliran Geothermal Holdings Inc.
The decision to develop the initial five-megawatt plant is based on the five wells drilled by its partner. A production well tested positive of producing five MW and another production well to be tested is expected to generate five MW as well.
BGI has an estimated potential of 240 MW from the concession for the exploration, development, and production of geothermal resource within a specified contract it received from the Department of Energy (DOE).
“Fluid management studies have been completed on one particular well, with positive results with respect to acid control. Given this outcome, a decision has been made to proceed with the first five MW plant once power sales agreements have been obtained. It is expected that this first plant will be operational in 2018,” Nickel Asia said.
Initial developments in Biliran started in the 1980s but the project was not completed due to the acidity of the geothermal brine.
But last year, EPI said it is working double time to put up an initial 10-MW geothermal power project in Biliran to help speed up development of the island province after the onslaught of tropical depression Urduja.
Meanwhile, Mindoro Geothermal Power Corp. (MGPC) – which is 86.29-percent owned by Nickel Asia through EPI – is scouting for potential partners in developing the Montelago geothermal project.
“EPI has been in discussions with a few rare groups familiar with geothermal investments to strategize how to further minimize drilling risk. Once firm, this wholly owned EPI subsidiary is poised to deliver much needed power to the island grid of Mindoro,” Nickel Asia said.
In 2016, two geothermal wells were drilled in the Montelago project but did not show high temperatures to warrant moving ahead to development.
But last year, a more detailed assessment was done by GeothermEx, a leading American geothermal advisory firm, which showed potential of developing at least 3.5 MW in the southern portion and 18 MW in the northern portion.
“They have also confirmed that the existing wells in the southern portion can net out at least 3.5 MW of power. Combined with their assessment for the northern portion of net capacity of at least 18 MW, MGPC may be commercially operational within three years’ time,” Nickel Asia said.
Apart from the geothermal projects, EPI is working on a 100-MW solar farm project and a 50-MW wind farm at the Subic Bay Freeport through wholly owned subsidiary Jobin-SQM Inc. (JSI).
The miner plans to grow a portfolio of renewable power assets in the Philippines that is diversified as to market, technology, and location.
“We believe that our entry into the power business through EPI, which will concentrate exclusively on renewable energy sources, will provide significant opportunities to grow our revenues and sustain financial returns,” it said.
Nickel Asia formally diversified into the renewable energy sector when it converted a P446 million loan to equity and infused additional equity in EPI in 2015.
In late 2017, the miner further raised its stake in EPI after it poured in P1.5 billion in additional funding through a deed of assignment for the payment of advances.