Manila, Philippines - Independent oil firm Eastern Petroleum Corp., through a new renewable energy vehicle, will put up a $70-million biomass power plant in Northwestern Mindanao.
The 20-megawatt (MW) biomass project that might be doubled to 40 MW at the cost of another $56 million will be the largest in the country, a company executive said yesterday.
Eastern Petroleum chairman and chief executive Fernando Martinez said the company will spend up to $70 million for a biomass power plant in Agusan del Norte.
“It is a project loan but it is very sustainable...We are now in the final stage of site acquisition for the plant,” he said.
“We will choose an engineering, procurement and construction contractor towards the end of the year,” Martinez added.
The biomass plant will use wood chips and agricultural wastes like rice husks to fuel the 20-MW project.
Martinez said financial closing will be completed in the first quarter of 2013.
This will allow Eastern Renewables, a company that has yet to be incorporated, to start commercial operations by the end of 2015.
Eastern Renewables’ project will be the largest in the country, which now hosts three-MW, five-MW and 12-MW biomass plants.
But this is way lower than the capacity of biomass projects abroad.
For instance, South Korea and Thailand are converting their coal plants into tree plantations for 50 to 100 MW biomass projects, Martinez said. This is in line with the move towards lowering carbon emissions worldwide.
Given the need for wood, the energy firm will make use of 5,000 trees everyday from four hectares.
“Originally, the plan was 30 MW. There is a possibility to double the capacity in the next three years if feedstock is available,” Martinez said, adding that the expansion cost will be 20 percent lower at $48 to $56 million.
Martinez said Eastern Renewables is looking at 4,000 hectares of contingent land for massive planting that will result in more than 500 direct and indirect jobs for the indigenous people in deforested areas.
Eastern Renewables will cater to the needs of Agusan del Norte Electric Cooperative Inc. and the Wholesale Electricity Spot Market.
“The project is viable even without the feed-in tariff (FIT) but if we are given a FIT, that is great,” Martinez said.
The FIT scheme, whose implementation is already delayed by almost three years, guarantees investments of renewable energy firms through fixed rates that would be shouldered by consumers over a set period of time.