The Department of Energy (DOE) shared that financial partnerships and government support will play a key role in de-risking geothermal exploration in the country, as its costs are expected to decrease over the next 20 years.

During a University of the Philippines (UP) lecture on the country's energy situation, Energy Undersecretary Rowena Guevara highlighted the benefits of de-risking geothermal energy, emphasizing strategies to manage risks in exploration, technical work, and financing.

“The DOE finally approached the Department of Finance (DOF) and National Economic and Development Authority (NEDA), and they said that the government finally needs to invest in energy infrastructure after 24 years,” she said.

“We’ve said we need geothermal de-risking, meaning to say the government and the private sector will share in the risks of exploration of geothermal,” Guevara added.

Because of this call to invest in geothermal energy, she said that a loan from the Manila-based multilateral lender Asian Development Bank (ADB) would help them finance exploration works, among others.

According to Guevara, one drill of coal for exploration can cost roughly US$6 to US$8 million, or approximately P348 to P464 million.

“Geothermal cost is very high at the beginning but after the 20-year period when the loan has been paid for the capital, it will become very cheap,” she said.

This renewable energy (RE) is part of the third Green Energy Auction (GEA-3), with the DOE having identified three developers to compete for the 100 megawatt (MW) geothermal capacity.

Aside from geothermal, the DOE has also been pushing to invest in pumped storage hydropower, which is also part of GEA-3.

“These kinds of plants, [pumped storage hydro], last for more than 50 years. They’re worth the initial investment,” Guevara said.

“The original plan did not include pumped storage hydro at 4,000 MW, but we had to pivot because we realized that if all of these renewables are coming in and we need to balance them, we cannot just rely on liquefied natural gas (LNG),” she added.

Guevara noted that LNG prices fluctuate, therefore looking into indigenous resources, such as water, can offset the price volatility.

GEA-3 will begin its auctions on Feb. 11, with a target delivery period between 2025 and 2032 for geothermal, pumped storage hydro, and other renewable energy technologies, including impounding and run-of-river hydropower.