January 15th, 2010
Leyte Samar Daily Express
TACLOBAN CITY- Geothermal developer Envent Holding Philippines, Inc. has completed last week the power purchase agreements (PPA) worth $338 million with electric cooperatives in Leyte and Biliran Islands.
Envent’s chief executive officer Gudmundur Sigurjonsson said in an email sent to this writer that the electricity sales contract will take care of the income part of the Biliran geothermal development project 10 years after the project starts.
“We are now working on the project design, preparing environmental applications and the financial structure. The total cost estimate is above $100 million so the financial structure is an important task,” Sigurjonsson said.
The PPA entered with five electric cooperatives in Eastern Visayas has a combined capacity of 35 megawatt (MW) renewable energy. The contract has a term of 10 years with a price between $100 to $113 per MW.
The deal with Iceland-backed geothermal developer was inked with Leyte II Electric Cooperative, Leyte IV Electric Cooperative, Leyte V Electric Cooperative, Don Orestes Romualdez Electric Cooperative and Southern Leyte Electric Cooperative.
The baseload electricity will come from Envent’s 50 MW Biliran Unit 1 geothermal power plant, which is scheduled to come online in 2012 on the Biliran Island, the official said.
According to the company’s website, the electric cooperatives that signed the agreements handle more than 300,000 customer accounts, representing a population of about 1.9 million on Biliran and Leyte Islands.
The remaining 10 MW capacity will be offered to the six off-takers , and a portion left for the upcoming Wholesale Electricity Spot Market (WESM) in the Visayas region.
The financial arrangements will be completed in the next five to 10 months. Construction preparations are expected to start late 2010 and civil works will kick off early next year, the official said.
Sigurjonsson said that they will build three power plants in Biliran early next year with a capacity to produce 150 MW power.
“We are planning to build at least three units in Biliran (with a capacity of 50 MW each). Meaning that we will contribute 150 MW towards reducing the power crisis,” Sigurjonsson added.
He stressed that the company is not certain if the project will reduce power rates although that is their goal.
“The recent unrests in southern Philippines have made the financial structure of all large-scale projects in the Philippines more difficult and more expensive,” Sigurjonsson pointed out.
In June 2009, Envent Holdings signed a PPA with the Biliran Electric Cooperative for about 8,600 MWh (megawatt hour) per year of clean, renewable electricity at a price of $94 per MWh.
Envent Holdings’ key shareholders are Reykjavik Energy Invest and Geysir Green Energy based in Iceland where 100% of the power is derived from renewable sources (23% geothermal and 77% hydro).
Surface exploration was completed early last year. It was performed by a group of sub-contractors, including Phoenix Geophysics of Canada and the Philippine geothermal consultancy Fedco.
The mountainous island is considered a compound volcano with a single historic eruption in 1939. It is estimated that Biliran has at least 100 MW of geothermal energy. (SARWELL Q. MENIANO)
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