DoE bidding out hydro site contracts in Q4

MANILA, Philippines—The department of Energy (DoE) is bent on pushing through with its plan to bid out within the fourth quarter at least 40 prospective run-of-river hydropower sites for exploration and development.

Mario Marasigan, director of the Renewable Energy Management Bureau of the DoE, said they were now in the thick of preparations for the upcoming bidding, which could be the largest single offering of mini-hydropower projects to the private sector to date.

Marasigan told reporters that the DoE was expecting to finalize the bidding terms of reference within the third quarter of 2012, which would allow them to conduct the auction before the end of the year.

What makes these mini-hydropower projects more attractive to prospective investors, according to Marasigan, is that they come with feasibility studies that were prepared by the Japan International Cooperation Agency (Jica).

Based on what Jica has done, the power projects, which are located in Luzon and Visayas, have capacities of 1 to 2 megawatts each. However, he said further studies might still be needed on the projects.

The DoE has been optimistic of being able to draw enough private sector interest in the service contracts for the exploration and development of these hydro sites.

Energy Undersecretary Jose M. Layug Jr. earlier said the planned bidding would be patterned after the previous bidding conducted under the Philippine Energy Contracting Round, in which companies would be submitting offers that would be judged based on their technical and financial work programs.

“Although the installation target set by the government is just 250 MW for the development of hydropower in the first three years, these service contracts are all still in the predevelopment stage so we will not mind receiving more bids. Under these contracts, project proponents will still need to conduct a two-year feasibility study to determine whether the flow of the river is sufficient for their project,” Layug explained.

As of the end of July this year, the DoE has awarded 151 service contracts for hydropower projects with combined capacity of 2,506 MW.

There are 148 pending applications for hydropower projects that can generate another 1,802 MW of power.