RE firm eyes $185-M biomass portfolio

Renewable energy (RE) developer Asea One Power Corp. is set to invest about $185 million over the next five years to put up 60 megawatts in total biomass power plant capacity, which can help stabilize the country’s electricity supply.

Ernesto V. Tan of Asea One Power Corp. said that the company would start with a $37-million, 12-megawatt biomass project in Banga, Aklan.

Further on the horizon are solar projects, as they become cheaper and easier to set up with new technology, he added.

The company in June hired an engineering, procurement and construction contractor for the 12-megawatt project, Tan said. Site development may start in November, alongside tree planting activities for the possible use of wood chips. Rice husks and rice straws may also serve as feedstock for the facility. Testing and commissioning will follow.

The 12-megawatt project is expected to be completed “in 18 to 22 months,” Tan said. The project is being developed to take advantage of guaranteed rates under the government’s Feed-in-Tariff or FIT scheme. As such, the power off-taker will be state-owned National Transmission Corp.

Once the 12-megawatt plant in Aklan goes commercial, Asea One may move on to other project sites, possibly in Iloilo or somewhere in Luzon or power-starved Mindanao. The company also plans to scale up to a $90-million 30-megawatt biomass project.

On financing, Tan said, a French company is interested in Asea One’s biomass program, starting with the 12-megawatt project.

“Financing will be the usual 73 percent debt, 27 percent equity,” he said.

For its equity investment, Asea One is considering listing on the Philippine Stock Exchange in about two years. Tan said the local bourse is encouraging initial public offering for renewable energy firms, which have high growth potential.

The Philippine government is promoting renewable energy to curb the country’s dependence on fossil fuels. Among R.E. technologies, biomass is the only one capable of serving baseload plants—those with 24/7, high efficiency operations—as other technologies tend to be less efficient and are suitable only as peaking plants.