The SM Investments Corporation (SMIC) group plans to spend more than US$50 million this year to explore geothermal steam in six new sites, as it expands its renewable energy business.
SMIC president and CEO Frederic C. DyBuncio said the company has acquired six geothermal concessions and is developing them one area at a time. New drilling has started in Malinao in the Bicol region, with the next exploration site planned in Labo, Camarines Sur.
DyBuncio said developing a geothermal steam field typically takes about five years, as companies must drill wells, install pipelines, and build power plants.
The SM group operates its geothermal business through Philippine Geothermal Production Company Inc., which supplies steam to power plants including the Makiling-Banahaw (Mak-Ban) Geothermal Power Plant in Laguna and Batangas and the Tiwi Geothermal Field in Albay.
Drilling geothermal wells is costly, with each well costing about US$100,000 per day, DyBuncio said. The company typically drills two to three wells per site before determining whether the area is commercially viable.
SMIC has also increased drilling in Tiwi, where additional capacity may still be developed before expansion continues to Malinao and Labo.
Despite expansion plans, Philippine Geothermal reported a 46 percent drop in net income to P1.6 billion last year, mainly due to lower electricity prices in the spot market. Revenues also fell 23 percent to P4.4 billion.
The company’s Tiwi and Mak-Ban steam fields have been operating since 1979 and currently produce enough steam to generate about 300 megawatts (MW) of electricity. SMIC aims to increase dependable baseload capacity to 420 MW within five years.
Exploration across five geothermal contract areas could add up to 300 MW of new capacity, with up to 14 exploration wells planned between 2025 and 2030, the company said.
