Iceland firm signs $300-million power supply contracts with Leyte co-ops

MANILA, Philippines - Geothermal development firm Envent Holding Philippines Inc. has signed more than $300 million worth of long-term supply contracts with five electric cooperatives in Leyte.

Envent chief executive officer Gudmundur F. Sigurjonsson said the contracts involved multiple power purchase agreements (PPAs) with five electric cooperatives on Leyte Island for 35 megawatts (MW) of clean, renewable electricity at a price range of $100 and $113 per megawatthour (mwh). The value of the contracts over their 10-year term is between $300 million and $338 million.

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 Biliran Island.

The PPAs were executed with the following regional electric distribution cooperatives on the island of Leyte: Leyeco II, Leyeco 4, Leyeco 5, Dorelco and Soleco. The agreements follow the signing of an initial PPA last June, which committed five MW of the capability of the Unit 1 geothermal power plant. 

Together, the agreements with the six off-takers commit 40 MW of the Biliran plant’s capacity. 

The coops that signed the agreements handle more than 300,000 customer accounts, representing a population of about 1.9 million on Biliran and Leyte. 

The remaining 10-MW capacity will be offered to six off-takers, and a portion left for the upcoming Wholesale Electricity Spot Market (WESM) in the Visayas region.

Envent’s Biliran Unit 1 is being executed in collaboration with Biliran Geothermal Inc. and several other local companies.

“The execution of those PPAs is a major milestone for the project as the revenue portion of the plant is now mostly taken care of. The negotiation process with the electricity coops was extremely pleasant and we are pleased with the professionalism and business acumen of our local partners. We are now working on the financial structure of the project, which we expect will take between five to 10 months to complete,” Sigurjonsson said.

Envent is a renewable energy business dedicated to the exploration of geothermal resources in the Philippines as well as to the development of geothermal power plants in the region. It is currently working on several geothermal projects and is committed to contributing to the Philippine government’s target of adding 1,200 MW of renewable power capacity by 2013. 

Envent’s key shareholder is Geysir Green Energy, a global leader in the development of geothermal energy. Geysir’s co-shareholder is Reykjavik Energy Invest. Both companies are based in Iceland, where an impressive 100 percent of the power capacity is derived from renewable sources (23-percent geothermal and 77-percent hydro).

Geysir Green Energy is a global geothermal company which has invested around $650 million in geothermal businesses and projects around the world.

Reykjavik Energy Invest is the international business development arm of Reykjavik Energy, a geothermal power generation business providing the Iceland capital region with power generation and multi-utility services.