Energy group forges carbon sales deal with Spain's Endesa

MANILA, Philippines -  Maibarara Geothermal Inc., the consortium made up of PetroEnergy Resources Corp., Trans-Asia Oil and Development Corp. and PNOC-Renewable Energy Corp., has entered into a carbon sales deal with Spanish firm Endesa Carbono S.L. of Madrid.

PetroEnergy told the Philippine Stock Exchange that the agreement is expected to generate more revenues for Maibarara project, a 40-megawatt geothermal facility in Calamba, Laguna and Sto. Tomas, Batangas.

Endesa Carbono is a subsidiary of Endesa, the leading electricity company in Spain and the largest private electricity company in Latin America. The firm offers expertise in the carbon market and draws on long experience in greenhouse gas emission reduction projects.

Based on the agreement, Maibarara will sell to Endesa Carbono 100 percent of the certified emission reductions or carbon credits generated by the project.

The Maibarara project, located near Mt. Makiling, has an estimated cost of P2.8 billion.

“With the ERPA in place, the project is assured of a buyer of its CERs from the expected start of commercial operations in late 2013 to at least until 2020,” PetroEnergy said.

The deal is expected to provide Maibarara Geothermal with a secondary revenue stream apart from electricity sales.

Francisco Delfin Jr., PetroEnergy vice president, said “the signing of an emissions reduction purchase agreement (ERPA), more commonly known as carbon credit contract, for the 20-MW Maibarara geothermal power project between the project developer Maibarara Geothermal Inc (MGI) and the unit of Endesa Carbono, the carbon trading arm of the major Spanish electricity firm Endesa, is a welcome development.”

 Delfin noted that among the nine new geothermal contracts awarded by the Department of Energy (DOE) in 2010, Maibarara is the only one that has so far secured this forward sales of carbon credits.

“Given the uncertainty in the carbon market after the Kyoto Protocol, Endesa’s commitment to buy carbon credits to be derived from the operation of Maibarara is a further testament of the project’s viability,” Delfin said.

For his part, Energy Undersecretary Jay Layug said the signing “demonstrates the value of indigenous geothermal resource development in meeting national and global commitment in reducing carbon emissions.”

 The Maibarara project is among those bid out by the DOE in late 2009, where PetroEnergy emerged as the lone qualifying bidder and was consequently awarded the service contract in February 2010.