Lopez-led First Gen Corp. is pushing for stronger policy and financial backing to derisk geothermal energy activities and harness about 35,000 megawatts (MW) of generating capacity in Southeast Asia, making the region a global leader in this industry segment.
The group made this call on the opening day of the Asean Energy Business Forum on Monday, saying members of the Association of Southeast Asian Nations have massive geothermal resource potential of 34,000 GMW to 35,000 MW.
If the target capacity were unlocked, it would represent nearly 48 percent of the world’s geothermal resource.
According to Jaime Jemuel Austria Jr., president of the National Geothermal Association of the Philippines, the region’s current production stands at 4,000 MW.
Indonesia continues to dominate the market, accounting for about 84.9 percent of regional capacity. The Philippines, meanwhile, contributes about 12.7 percent.
But First Gen said there is also geothermal interest in Thailand, Vietnam, Myanmar, Malaysia and Laos.
‘Despite the abundance of this 24/7 renewable energy source, geothermal remains a minor contributor to national energy grids across Southeast Asia,’ the firm said.
In Indonesia, although it holds about 40 percent of global resources, the country operates less than 8 percent of the capacity due to bureaucracy problems and pricing structures.
First Gen also cited infrastructure challenges, such as the absence or lack of subsea cables and high-voltage transmission backbones that are needed to transfer the electricity generated from geothermal power plants located in remote areas to consumers.
Further developments are hindered by Hefty initial capital for exploration activities are hindering the development of more such power assets.
‘Because geothermal [energy] bears heavy upfront subsurface drilling risks before revenue generation begins, unsupportive policy environments often render projects unbankable compared to cheaper, faster-to-deploy variable alternatives,’ it added.
In the Philippines, the Department of Energy has begun entertaining developers wanting to secure initial investments from a P10.7-billion geothermal derisking facility.
The concept of this is the government will shoulder half of the drilling costs, with the loan tagged as a grant if the exploration activity is unsuccessful.
At present, the country has 2,057 MW of installed geothermal capacity, making it the third-largest geothermal power producer globally