EDC takes over the last 2 geothermal plants in Mindanao, Philippines

Alexander Richter 19 Jun 2009

Energy Development Corp. (EDC) yesterday assumed full ownership and operation of the 52-megawatt (MW) Minda-nao 1 and 54-MW Mindanao 2 geothermal power plants from a foreign build-operate-transfer (BOT) partner.

Reported locally, “Energy Development Corp. (EDC) yesterday assumed full ownership and operation of the 52-megawatt (MW) Minda-nao 1 and 54-MW Mindanao 2 geothermal power plants from a foreign build-operate-transfer (BOT) partner following the completion of an Energy Conversion Agreement.

“The turnover of the Minda-nao power plants will fully integrate the value chain of the geothermal business from steam production to power generation, like our Leyte projects,” EDC President Paul A. Aquino said.

The country’s largest geother-mal company took over operations of the power plants in Kidapawan, North Cotabato, from the Mindanao 1 Geothermal Partnership (M1GP), a consortium between Oxbow Power Corp. and Marubeni Corp.

“We will be well-positioned to address and benefit from the robust growth in peak electricity demand in the Mindanao grid as we offer cheaper and cleaner source of energy,” Mr. Aquino added.

The Mindanao 1 and Min-danao 2 power plants started operations on March 4, 1997 and June 17, 1999, respectively. In October 2006, EDC and M1GP agreed to extend Mindanao 1 power plant’s BOT contract period to coincide with Mindanao 2 power plant’s turnover.

The Mindanao 1 and Mindanao 2 geothermal plants previously operated by Japan’s Marubeni Corp. account for more than a tenth of the island’s power supply. — BW FILE PHOTO

“With the transfer of these geothermal power plants, EDC will be more integrated, like our geothermal projects in Leyte. EDC will continue to be a major geothermal operator and exporter of geothermal energy,” EDC Chairman Oscar M. Lopez said.

“We are building our competitive advantage by developing more geothermal projects in answer to the clamor to build not just any power supply but a clean energy source that will meet the growing demand for electricity here in Mindanao,” Mr. Lopez added.

Since commissioning, the two Mindanao power plants have operated with an average availability factor of 96% and 98% at an average plant capacity of 91.3% and 92.5%, respectively. Mindanao Grid data for 2006 and 2007 showed that the geothermal plants generated an average of 10.56% of Mindanao’s entire electricity supply.

“The operation of the Mindanao power plants will continue to be efficient with the seamless turnover and fusion of expertise of EDC and Marubeni geoscientists and engineers,” Mr. Aquino said.

The Mindanao plants are the last of the BOT plants turned over to EDC. In 2006 and 2007, EDC assumed operations of the Unified Leyte plants from California Energy and Ormat. The Unified Leyte plants consist of the 132-MW Upper Mahiao, 232.5-MW Malitbog, 180-MW Mahanagdong, and the 51-MW Optimization geothermal power plants.

EDC is the country’s leading developer of geothermal energy, accounting for 62% or 1,199-MW of total installed capacity. The company has also acquired a 60% equity in the Pantabangan-Masiway hydroelectric project in Nueva Ecija following its bid to be the country’s premier pure renewable energy company.

Before being publicly listed, EDC was a wholly owned subsidiary of the state-owned Philippine National Oil Co. that has subsidiaries in the exploration, development and production of energy.

EDC became a unit of Lopez-owned Red Vulcan Holdings Corp. two years ago after parent First Gen Holdings Corp. bought a majority in the geothermal company for P58.5 billion.

Shares in EDC went up to P3.85 apiece yesterday from the previous day’s close of P3.75.

Source: Business World Online