Geothermal project in Oriental Mindoro to decrease power prices
Oriental Mindoro, Philippines (source: flickr/ Welcome to my B&B, creative commons)
Alexander Richter
2 Feb 2014
Emerging Power, Inc., the developer of the Montelago project in Oriental Mindoro, is now in final negotiations on a power purchase agreement, that would see a decrease in power rates by around 40 percent upon the planned start of operation by 2016.
Having reported on the Montelago project by Emerging Power, Inc. before, it is now reported that the company “is set to sign a power supply agreement with the Oriental Mindoro Electric Cooperative in a deal that is seen to reduce power rates by about 40 percent after the project completion in 2016.
Prevailing rates of P11 per kilowatthour will drop to P6.58 per kWh, according to Emerging Power (this is a decrease from around $0.24 to around $0.15/ kWh).
Emerging Power will supply Ormeco power from its 40 megawatt Montelago geothermal power plant in Barangays Montelago, Montemayor and Melgar-B in Naujan town of Oriental Mindoro.
Emerging Power will supply 20 MW to Ormeco and another 20 MW to the Occidental Mindoro Electric Cooperative or Omeco once the supply contract is finalized.
The company said the lower rate from the geothermal plant would translate to savings of at least P2.1 billion in four years.
The geothermal power plant will provide the blackout-hit island with a cheap and renewable energy source.
“If we keep investing in coal and oil, consumers will be paying P40 per kWh by year 2030 if we are to use the estimates of institutions like the International Energy Agency and the Economist. In contrast, the Montelago geothermal power plant will stabilize the price over the next 20 years and consumers will only pay a maximum of P7.50 by 2030”, said Emerging Power spokesperson Gani D. Capaning.
Capaning said that in recent years, the Philippines has been experiencing power supply problems that are mainly attributed to fuel price spikes.
He said that with the operation of the Montelago geothermal power plant, the people of Mindoro could be assured of a sustained, low-priced power as opposed to the cost of power derived from fossil fuels.
“The high cost of diesel and bunker fuel has been jacking up the cost of electricity in the Philippines’ main power grids and will continue to do so in the coming years,” Capaning said.
Ormeco president Audel Arago, for his part, welcomed the geothermal project as it will spur economic activity and provide a diversified mix to the electric cooperatives’ power supply.
“As we anticipate the Montelago geothermal power plant’s commissioning and operation in (2016), we look forward to the positive economic and environmental impact it will bring, when our consumers shall have been accorded more affordable electricity drawn from renewable energy,” Arago said.
Emerging Power expects to start drilling by the third quarter of this year and targets to start delivering by middle of 2015, with the full capacity for delivering 20 MW to Occidental and 20 MW to Oriental Mindoro by the middle of 2016.”
Source: Manila Standard
