Philippines eyes $2.5bn geothermal investment

The Philippines, the world's second-largest developer of geothermal power, plans to award contracts for 19 geothermal power plants that could attract more than US$2.5bn in private investment, according to a senior official.

In the next five months, the government will issue tenders for the development of 10 geothermal sites, with a further nine deals under direct negotiation with various companies, Alejandro Oanes, division chief for geothermal energy at the Philippine Energy Department, told Reuters yesterday.

He said Icelandic geothermal project developer Geysir Green Energy and the Philippine's biggest producer of geothermal power, Energy Development Corp, were among the companies bidding for contracts.

Officials estimate that more than 620MW of geothermal energy could be generated from the 19 sites, which include two volcanoes: Mt Isarog in Camarines Sur province, with a potential capacity of 70MW, and Mt Labo in Camarines Norte, which may yield up to 65MW.

Geothermal resources have also been identified in the provinces of Benguet, Cagayan, Palawan, Oriental Mindoro, Surigao del Norte and Laguna.

The Philippines is located within the so-called Pacific Ring of Fire – an area encircling the Pacific Ocean and parts of the Indian Ocean where active earthquakes and volcanoes are concentrated along tectonic plate boundaries. Most of the region's richest geothermal sources are located within the area.

The country generated 17 per cent of its electricity from its 2GW of geothermal capacity last year, according to government data. By 2020, it hopes to raise the figure to 4.5GW as part of a broader goal of doubling its renewable energy capacity over the next decade.

The federal government is also offering tax breaks and tariff exemptions for renewable power projects in a bid to attract investors. Earlier this month, it awarded 87 contracts to 18 companies for the development of alternative energy sources that include solar, hydropower, wind and tidal power.