THE GOVERNMENT can support the growth of the country’s geothermal industry by helping with the upfront risk that goes with the development of the indigenous energy resource, the president of Energy Development Corp. (EDC) said.
“Globally, geothermal has always grown in government’s hands — whether it’s Costa Rica, Mexico… because government has unlimited balance sheet,” Richard B. Tantoco, EDC president and chief operating officer, told reporters.
“So if government could do anything to help, not just us but any of the 13 players that have concession areas, it’s to help with that upfront risk,” he added.
Mr. Tantoco made the statement in response to a request for comment on the country’s standing in global geothermal power generation, which has slipped a notch lower this year after being overtaken by Indonesia in the second spot. The US remains the world’s biggest.
“FiT (feed-in-tariff) will always help because you have a PPA (power purchase agreement) with the government. But really, if you look at geothermal — historically and worldwide — the biggest issue… is in the upfront risk,” he said.
EDC is the country’s largest geothermal company, delivering 1,457.8 megawatts (MW) of clean and renewable energy.
In Latin America, Mr. Tantoco noted two lending institutions have an exploration fund that offers a “grant-to-loan” program.
“So I’m going to give you money. It’s free if you drill. If the well doesn’t produce, you don’t owe me anything. It’s a grant. If it produces and later on it becomes a commercial project, you pay me back. It becomes a loan,” he said.
He said a similar policy could be adopted by the Philippines to spur the growth of the local geothermal industry.
Mr. Tantoco said a few weeks ago, EDC executives had a meeting with one of the top officers of the World Bank group ahead of its issuance of a policy recommendation on renewable energy.
He said EDC representatives also had a meeting with the International Finance Corp. to offer their insights on how to expand the renewable energy industry.
“Their comment was: ‘We see your company as a beacon. You’re like a shining example. What can we do to support you.’ We said: ‘We want you to unleash risk financing and work with the government to simplify the permitting system,’” he said. — Victor V. Saulon