Iceland firm buys into local geothermal project

MANILA, Philippines - The Philippine geothermal sector has attracted a new foreign investor in line with its aim to become the largest geothermal producer worldwide.

Orka Energy of Iceland, an expert in district heating systems, has bought into a geothermal project in Eastern Visayas, a Department of Energy (DOE) official said.

In a briefing, DOE Undersecretary Jose Layug Jr. said Orka Energy has entered the Philippines through a farm-in deal for the 49-megawatt (MW) Biliran geothermal project.

Orka Energy is scheduled to drill two or three production wells next year, Layug said.

“If it is [commercially viable], they can start next year. They are still awaiting the environmental compliance certificate,” Layug said.

The global geothermal firm operates through Shaanxi Green Energy, a Sino-Icelandic joint venture between Orka Energy and China Petroleum & Chemical Corp., for the development of geothermal resource in China.

Orka Energy is into geothermal energy exploration, development and electricity production.

“Iceland is one of the pioneers in the geothermal business,” Layug said.

Layug said the Icelandic firm can introduce use of geothermal energy for district heating.

Orka Energy has a long experience in constructing and operating geothermal district heating systems. It is into the development of a geothermal heating system in China.

Layug said the Philippines can learn from the Orka Energy’s expertise.

“We are hoping they can impart to us their technology,” Layug said.

The DOE is encouraging the private sector, both local and foreign firms, to invest in geothermal power production.

To date, installed geothermal production capacity in the Philippines is 1,972 MW, the second highest in the world next only to the US.

Iceland, for its part, has an installed geothermal capacity of 1,400 MW.

The Philippines has granted 35 service contracts for geothermal projects under the Renewable Energy Act of 2008, which aims to accelerate the exploration and development of renewable energy resources in the Philippines.

“We hope that by 2030, there will be an additional 1,500 MW in geothermal resource. It should make us number one [in the world],” Layug said.