Green Core Geothermal signs long-term PPA in Visayas

Green Core Geothermal signs long-term PPA in Visayas Mt. Mayon, Philippines (source: flickr/ SURF&ROCK (Miguel Navaza), creative commons)
Alexander Richter 1 Oct 2010

Energy Development Corp.'s subsidiary Green Core Geothermal has signed long-term supply agreements with three electric cooperatives in the Visayas for the supply of 40MW of electricity.

Reported from the Philippines, “Green Core Geothermal Inc., a subsidiary of geothermal leader Energy Development Corp., has inked long-term agreements with three electric cooperatives in the Visayas for the supply of 40 megawatts of clean energy annually.

In a statement, EDC said it has forged separate 12-year contracts with the Iloilo Electric Cooperative (Ileco 1), Aklan Electric Cooperative (Akelco) and Capiz Electric Cooperative (Capelco). These contracts are expected to guarantee clean and and affordable power for power consumers in Capiz, Antique, Iloilo and Aklan.

Based on the contracts, Green Core will supply Akelco with 18 MW for 2010 and 10 MW yearly from 2011 to 2020. Akelco currently services 17 municipalities in Aklan and two municipalities in Antique.

Ileco 1, on the other hand, is assured of 3 MW from 2010 to 2012 and 18 MW annually from 2012 to 2022. Its franchise areas cover 15 municipalities in Iloilo.

Capelco meanwhile, will get 12 MW for the next 10 years to energize 17 cities and municipalities in Capiz.

Green Core will source the electricity it will supply to these coops from its 112.5-MW Tongonan 1 in Leyte and 192.5-MW Palinpinon geothermal power plants in Negros Oriental, which it won in a bidding held by the Power Sector Assets and Liabilities Management Corp. in 2009.

“We’re very glad to have Ileco 1, Capelco and Akelco as partners in delivering clean energy to Iloilo and Aklan. EDC’s long-term contracts with them will support the growth needs of their respective provinces and customers with clean, reliable and affordable power,” said EDC president and COO Richard B. Tantoco.

“Since the industry is leaning more towards clean energy, EDC, with its 34-year head start in the geothermal business, is well positioned to address the supply shortage in the Visayas grid,” Tantoco added.

The officers of the three cooperatives were also quoted as saying that geothermal power is the best option for them.

“We’re very happy with this deal primarily because of the low rates of geothermal compared with other sources. It’s good that we get 70 percent of our supply from Green Core’s geothermal plants and only 30 percent from more expensive sources,” said Capelco general manager Edgar Diaz.

“We are able to provide both our residential and industrial customers with clean, stable and affordable power,” Diaz added.

For Akelco general manager Chito Peralta, the agreement with Green Core will help augment the power supply in the province and may even help encourage more tourists to visit Boracay. Getting power has always been a problem for Aklan, according to Peralta, because it is located at the tip of the grid.

Ileco 1 general manager Wilfred Billena, meanwhile, expressed confidence that the power supply contract “will also result in lower power rates for us in Iloilo.”

Tantoco explained that the pricing of indigenous renewable energy resource such as geothermal is not only independent of any indexation to movements in global energy indices, but is also VAT (value added tax) zero rated.”

Source: Business Inquirer