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Figure 20: Installed Geothermal Capacity Before and After Sector Privatization in the Philippines 84. The Philippines employed an approach of separating steam and power development before the sector privatization. The NPC was responsible for financing, constructing and operating all geothermal power plants until the mid-1980s. Then because the NPC faced financial problems, IPPs were allowed to build and operate power plants under BOT terms at two fields and sell electricity to the NPC. The California Company Unocal, which also had a joint venture with the NPC, developed two geothermal fields, assumed the responsibility and risk for drilling and wellfield development, and entered into a contractual agreement to sell steam to NPC. For other fields, PNOC-EDC carried out exploration and drilling and assumed all resource risk; the steam from these fields was sold to the NPC for power generation, and later on with the mounting financial problems in the NPC, to IPPs. The experience in the Philippines shows that the success of separate steam and power development highly depends on the steam buyer’s ability to make timely payments to the steam supplier, as the NPC had difficulty fulfilling this obligation due to its financial viability. 85. In recent years, the Philippine government has renewed its commitment to geothermal development and made marked efforts in attracting private investments. The Renewable Energy Act, effective in 2009, provides a series of incentives and subsidies to limit the exploration and drilling risks. A new Renewable Energy Management Bureau was established in 2009 and is responsible for tending and concessions. Power producers will be able to negotiate PPAs or sell on the spot market (feed in tariffs are provided for other renewables, but not for geothermal). After a period of limited development in the geothermal sector, geothermal projects seem to be picking up again and there is now huge interest from foreign power companies within the country. 86. The United States provides a wealth of information and a number of important lessons regarding the incentives and risk sharing alternatives for developing geothermal resources. The 88PDF Image | Drilling Down on Geothermal Potential Central America
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