SM’s PGPC bags Leyte geothermal contract

MANILA, Philippines — Philippine Geothermal Production Co. Inc. (PGPC), a unit of the Sy family’s SM Investments Corp. (SMIC), has secured a government contract to develop a geothermal resource in Leyte.

In a June 1 advisory, Energy Secretary Sharon Garin declared PGPC a winning bidder under the Department of Energy (DOE)’s fifth open and competitive selection process (OCSP5).

The SMIC unit submitted the highest-ranked application for the pre-determined area (PDA) 2, covering the Southern Leyte Geothermal Project, which has a potential capacity of 25 megawatts (MW).

Once developed, the project is expected to add to PGPC’s portfolio and support its goal of doubling capacity over the next five to seven years. 

The company currently operates the Tiwi steam field in Albay and the Mak-Ban steam field spanning Laguna and Batangas. With a combined capacity of 300 MW, the assets are supplying geothermal energy to power plants owned by the Aboitiz Group.

PGPC, which has project concession sites in Kalinga, Benguet, Cagayan, Quezon, Camarines Norte and Camarines Sur, has set aside around P3 billion for its geothermal expansion this year.

Aside from PGPC, two other companies emerged as winning bidders for different renewable energy (RE) technologies.

Almanapower Corp. clinched PDAs for three hydroelectric power projects, while Sara Philippines Holdings Corp. won a PDA for wind energy development.

Meanwhile, five PDAs — four hydro and one geothermal — received no applications, while one wind resource bid was disqualified for failing evaluation requirements.

Pursuant to existing guidelines, the unawarded areas will be opened for direct application through the DOE’s Energy Virtual One Stop Shop.

The OCSP is a method of awarding RE service contracts through a transparent and competitive bidding process to facilitate the exploration, development and utilization of the country’s indigenous energy resources.

This is a different scheme from the green energy auction program, where the government awards winning bidders with long-term contracts to deliver electricity at agreed tariffs.