THE Department of Energy (DoE) said it is going to assess the potential impact of the proposed $5-billion (about P308 billion) acquisition of Energy Development Corp. (EDC), the country’s largest geothermal power producer, if the transaction pushes through.
The agency has yet to receive formal notice of the proposed deal, but Energy Secretary Sharon S. Garin said it could evaluate any implications for the country’s power supply.
The comments got here after First Gen Corp. disclosed that it had received an unsolicited, non-binding $5-billion offer from Indonesia’s PT Barito Renewables Energy (BREN) to accumulate its renewable energy subsidiary, EDC.
EDC accounts for about one-fifth of the Philippines’ installed renewable energy capability, with most of its capability coming from geothermal power plants within the Visayas and Mindanao.
“But when it does come to that, the DoE’s role is to be certain that our supply shouldn’t be affected, and that the owner, if the deal pushes through, will follow the DoE’s energy plan to advance more geothermal and renewable energy,” Ms. Garin said in an interview last week.
While First Gen has yet to determine on the offer, Ms. Garin said BREN’s acquisition of EDC could be “a welcome change” if it brings more investment into the geothermal sector.
“So long as they comply with all of the legal requirements, since there may be questions on that,” she said. “But I feel if this will encourage more investments, why not — especially in geothermal, which we really want to expand further.”
BREN is the renewable energy arm of Indonesian conglomerate PT Barito Pacific Tbk. It holds a majority stake in Star Energy Geothermal, Indonesia’s largest geothermal producer.
The Philippines has an installed geothermal capability of 1,952 megawatts (MW), making it the world’s third-largest geothermal power producer after america and Indonesia.
The Economy and Development Council recently approved a P10-billion geothermal resource de-risking facility to scale back the risks related to geothermal project development.
Geothermal energy provides baseload power, although exploration requires significant upfront investment before a resource might be confirmed as commercially viable. — Sheldeen Joy Talavera