BOI okays EDC geothermal projects

MANILA, Philippines - The Board of Investments (BOI) approved the existing geothermal projects of Energy Development Corp. (EDC) located in Negros Oriental and in both Albay and Sorsogon under Republic Act 9513 otherwise known as the Renewable Energy Act of 2008.

“The country still has a vast potential of tapping geothermal energy since it has many volcanic areas as it is located in the Pacific Ring of Fire. These projects are in line with our target of a geothermal capacity of at least 3,000 MW by 2030,” BOI managing head Cristino L. Panlilio said.

Southern Negros Geothermal Production Field (SNGPF) was commissioned in 1983 while BacMan I started operating in 1993 and BacMan II in 1994. Hence, these projects are therefore not entitled to the Income Tax Holiday (ITH) incentive.

Instead, they are entitled to a corporate tax rate of 10 percent on their taxable income upon registration with the Department of Energy (DOE). SNGPF and BacMan have been registered with DOE since Oct. 23, 2009 as RE Developers of Geothermal Resources.

EDC is an affiliate of the Lopez-owned conglomerate, First Philippine Holdings Corp. (FPHC). The plant in Negros Oriental is known as the SNGPF. It produces geothermal steam that powers the 192.5-megawatt (MW) Palinpinon Power Plants owned and operated by Green Core Geothermal Inc., a subsidiary of EDC.

SNGPF geothermal system lies in the northern flanks of the inactive Cuernos de Negros volcano. SNGPF consists of two steamfield projects - Palinpinon 1 and 2.

Palinpinon 1 comprises 25 production wells, 11 injection wells and a 14-kilometer pipe network. Palinpinon 2, on the other hand consists of 16 production wells, six injection wells and a seven kilometer pipe network. All told, the SNGPF has a book value of P1.39 billion as of 2010 with employment of 288 personnel.

EDC’s project in both Albay and Sorsogon is dubbed as the Bacon-Manito Geothermal Production Field (BacMan) which comprises two steamfield projects – BacMan 1 and 2. Bacman 1 supplies a steam to a nearby 110 MW power plant of the National Power Corporation (NPC).

It consists of 14 production wells and seven injection wells and a 15 kilometer pipe network. Bacman 2 supplies steam to a nearby 40 MW power plant of NPC. It consists of nine production wells, five injection wells and a five kilometer pipe network. Total net book value of BacMan as of December 2010 is P2.52 billion with manpower requirement of 261 people.

The Philippines is the second largest geothermal producer in the world, next only to the United States. Geothermal energy already accounts for nearly a fifth of the country’s total electricity generated.