Blackout-plagued Mindoro will soon have cheap power rates, after a major power deal was signed between the region’s power cooperative and an energy firm.
Emerging Power Inc. (EPI) recently launched its 40-megawatt (MW) geothermal power plant with a power supply agreement (PSA) for 20-MW from the Oriental Mindoro Electric Cooperative (Ormeco), a deal seen to bring down power rates in the island-province by about 40 percent, from the current rate of over P110 per kilowatt-hour (kWh) to around P6.58 per kWh upon the project’s completion in 2016.
During the signing of the agreement, Energy Secretary Carlos Jericho Petilla lauded the deal between Ormeco and EPI.
“When business in Mindoro grows, Metro Manila consumers have to pay for the increase in its electricity consumption through a subsidy. Investors then doubt the stability of electric supply in Mindoro because without this subsidy, there will be no electricity there. But through this agreement, through this project, there will no longer be any need for a subsidy,” he said.
Specifically, the 40-MW Monte–lago Geothermal Power Plant will result in as much as P2.1 billion in power bills savings for the people of Mindoro in four years’ time.
The EPI project, which is located in Barangays Montelago, Montemayor and Melgar-B in Naujan municipality, Oriental Mindoro, is also being eyed as an additional power source for the Occidental Mindoro Electric Cooperative (Omeco).
EPI spokesperson Gani Capaning said that Omeco had accepted EPI’s offer to supply Occidental Mindoro with 20 MW of power.
“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,” Capaning said.
Targeting to complete the project in 2016, EPI expects to drill by the third quarter of this year and will start delivering by middle of 2015, with the full capacity for delivering 20 MW to Occidental and 20 MW to Oriental Mindoro completed by the middle of 2016.
The EPI geothermal project costs $170 million and is partly funded by the Netherlands Development Finance Co. (FMO).
EPI is a Filipino company engaged in the development of renewable energy projects. FMO is a bilateral private sector development bank that invests in companies working in developing and emerging markets.