Geothermal firm inks agreements to supply power to Leyte co-ops

By Amy R. Remo
Philippine Daily Inquirer

MAJOR geothermal developer Envent Holding Philippines Inc. has signed five power purchase agreements worth roughly P15.2 billion ($338 million) for the supply of electricity to cooperatives in Leyte.

Envent Holding—backed by Iceland-based firms Reykjavik Energy Invest and Geysir Green Energy—said the agreements were signed with Leyte II Electric Cooperative Inc. (Leyeco), Leyeco 4, Leyeco 5, Don Orestes Romualdez Electric Cooperative (Dorelco), and Southern Leyte Electric Cooperative Inc. (Soleco).

Envent said the contracts, which would be valid over a 10-year period, would allow it to supply 35 megawatts (MW) of clean, renewable electricity priced between $100 and $113 per MW-hour (mWh).

“The execution of those PPAs is a major milestone ... as the revenue portion of the plant is now mostly taken care of. The negotiation process with the electricity co-ops was extremely pleasant and we are pleased with the professionalism and business acumen of our local partners,” said Envent CEO Gudmundur F. Sigurjonsson.

“We are now working on the financial structure of the project, which we expect will take between five to ten months to complete,” he added.

The baseload electricity will come from Envent’s 50-MW Biliran Unit 1 geothermal power plant, which is scheduled to begin commercial operations by 2012.

The facility is located on Biliran Island, which has a good connection to the national power grid. The project is being executed in collaboration with Biliran Geothermal Inc. and several other local companies.

The five new PPAs would bring to six the total number of agreements that Envent had forged with electric cooperatives on the island.

According to Envent, the cooperatives that have signed the agreements handle more than 300,000 customer accounts combined, representing a population of about 1.9 million on Biliran and Leyte islands. These off-takers are expected to consume about 40 MW of electricity.

“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,” Envent added.

Through its various geothermal projects in the country, Envent has committed to add a total of 1,200 MW of renewable energy to the grid by 2013.