Energy dep’t seeking up to $250M to derisk exploration for geothermal investors

THE PHILIPPINES may need to obtain an initial $250 million to derisk projects for potential geothermal developers, the Department of Energy (DoE) said.

“The de-risking facility is about $250 million,” Energy Assistant Secretary Mylene C. Capongcol said on the sidelines of a conference organized by the National Geothermal Association of the Philippines (NGAP) on Wednesday.

She said that eligible geothermal developers will be entitled to claim 50% of the exploration and drilling costs from the de-risking facility.

“It would be cost shared on the drilling and exploration stage which is the riskiest,” she said.

The DoE has tapped the Asian Development Bank for technical assistance to develop and implement the geothermal de-risking facility.

The funding sources are still being evaluated, with Ms. Capongcol saying the DoE is in talks with the Land Bank of the Philippines, the Philippine Guarantee Corp., and the Department of Finance for potential partnerships.

The DoE has also initiated a meeting with the International Monetary Fund and other international institutions.

“The de-risking facility will surely boost interest in undertaking exploration drilling in the years to come, and eventually lead to the development of more geothermal projects,” NGAP President Jaime Jemuel C. Austria, Jr. said in a speech.

Mr. Austria said the geothermal companies continue to test and commission new geothermal power plants.

Marvin S. Bailon, vice-president and head of the business development group at Energy Development Corp., said that the Philippines could unlock its geothermal resources by streamlining permit processing.

“Being able to apply for permits in parallel help not just the geothermal development but all renewable energy and energy projects,” he said.

Mr. Bailon said that the capital needed for exploration and drilling is about P1.5  billion to P2 billion.

The DoE is planning to hold a third green energy auction this year for geothermal, pump-storage hydro, run-of-river hydro, and impounding hydro with a combined capacity of 4,399 megawatts (MW).

The Philippines’ installed geothermal energy capacity was 1,952 MW in 2023, making the country the third biggest geothermal producer.

As of July, 35 geothermal service contracts are being monitored by the DoE. Among these, 20 are in the pre-development stage and 15 are in the development or commercial stage.

Separately, the DoE added that it is planning to establish an independent nuclear regulatory authority that will oversee the safe and secure development of the nuclear energy program.

“The independent nuclear regulatory commission is expected to be fully operational by 2026 including the determination of the government’s role in policy and/or legislation,” the DoE said in its Philippine Nuclear Energy Program 2024-2050 unveiled on Wednesday.

The accompanying laws on the nuclear legal and regulatory framework are targeted to be in place by 2025, followed by the implementing rules and regulations.

“By 2027, legal framework for the mechanism for power contracting should be established,” the DoE said.

The industry plan seeks to establish safety, security and safeguards and will cover licensing, construction, and operations up to the plant’s decommissioning.

The DoE aims to have commercially  operational nuclear power plants by 2032 with at least 1,200 MW, gradually increasing to 4,800 MW by 2050. — Sheldeen Joy Talavera