Sto.Tomas, Batangas: Maibarara Geothermal Inc. (MGI) broke ground on Thursday for its 12-megawatt Maibarara-2 Geothermal Power Facility (MGPF), and expects to start operating the plant in the fourth quarter of 2017.
Maibarara-2 (M2) is currently the only new geothermal power station being constructed in the country.
Maibarara Geothermal is a joint venture company owned by PetroGreen Energy Corp. (PGEC), which holds a 65 percent stake, Phinma Energy Corp. (Phinma Energy) with 25 percent, and PNOC-Renewable Corporation, with 10 percent. PGEC is a subsidiary of listed PetroEnergy Resources Corporation (PERC).
The ground-breaking ceremonies were led by Department of Energy (DOE) Assistant Secretary Richie Avigale R. Pilares and incoming Chair of the National Renewable Energy Board (NREB) Jose M. Layug. It was also graced
Maibarara 1 (M1) is a 20-megawatt (MW) integrated steam field and power plant, which has been operating since 2014 and the first renewable energy (RE) project declared commercial by the DOE completely within the Renewable Energy law of 2008.
For the past two years it has been generating and exporting renewable power to the Luzon grid.
“We have monitored a reservoir – a source of fuel, which is hot water and steam, we drilled an additional well in 2014 and tested them in 2015 – these additional wells showed we have additional capacity that is sufficient for more power generation,” MGI President Francisco G. Delfin Jr. said in an interview.
“We’ve got a third-party independent validator confirming we can generate more than 30MW for 25 years – which include the 20 MW Maibarara-1… Our addition is 12 MW for Maibarara-2… [So], when we finish in 2017, the total will be 32MW – within the existing DOE contract and covered by the Department of Environment and Natural Resources (DENR)-Environmental Compliance Certificate (ECC), which is actually for 40 MW in the beginning,” Delfin said.
“This improved the project economics that led to the signing of an offtake agreement for M2 with Phinma Energy and a P1.4 billion project loan with Rizal Commercial Banking Corp. (RCBC). Despite its modest size, Maibarara-2 combines the advantages of being base-loaded, not FIT-dependent, renewable, and free of harmful greenhouse gas emissions,” he added.
Delfin also said that M2 has negotiated for a long-term energy supply agreement with Phinma Energy and is now fully contracted.
The total project cost for the 12-MW plant, including the drilling of wells, is P1.86 billion.
“What we have are several contractors. Fuji Electric of Japan – the main equipment supplier; also for M1, for other aspects of the project, we engaged local contractors – PHESCO for civil engineering, Yokogawa for instrumentation and PPMC for the electrical, he said.
“If the reservoir performs well, we can drill more wells in the future and see if we can expand it up to 40 MW – probably what we will call M3. But even as we speak, we’re studying the further expansion of Maibarara beyond 32-MW. But this will come after 2017. The advantage of expansion – royalties to national government and LGU – will increase,” he added.
Meanwhile, MGI Chair and PGEC President Milagros V. Reyes said: “We target Maibarara-2 to be online by the fourth quarter of 2017. Thus, we expect MGI revenues to increase further by 2018, along with our royalty remittances and tax payments to our host LGU. And as important, Maibarara-2 when commissioned will be the fourth power station completed by parent company PGEC in four years following our 20MW Maibarara-1 in 2014, 36MW Nabas-1 wind in 2015 and the 50MW(DC) Tarlac-1 solar facility in 2016.”
M2 is expected to bring in roughly an additional P400 million annually, which will still depend on any unexpected shutdown, or damage from typhoons.
“For M1—it’s a matter of public record that we’re crossing P700 million,” Delfin explained.
“PGEC is dependent on dividends of subsidiaries like MGI, PetroSolar, PetroWind. The dividend will be dependent on the loan covenant of these projects, because you have to pay off the loan first, although we deliver in a very good situation,” he said.