2020 Updates

A. Policy Reforms

• • NGAP pushes geothermal for inclusion as priority dispatch in WESM

NGAP believes that the many challenges being faced by the geothermal sector can be partly addressed by including geothermal as part of Priority Dispatch. This issue is especially critical in instances when there is constraint in the transmission facility and the National Grid Corporation of the Philippines (NGCP), as System Operator, has to order the curtailment of generation capacities in order to preserve the reliability and security of the Grid.

NGAP anticipates that the curtailment being done to geothermal plants in Negros may also happen in other areas because the contribution of variable renewable energy (VRE) sources and distributed generation to the power mix is expected to increase in the coming years. We, therefore, requested the DOE to undertake measures, including the amendment of DC 2015-03-0001, to ensure the promotion and development of all RE resources, including geothermal, which is not entitled to FIT.

• • NGAP calls for recognition and implementation of VAT zero-rating for RE

NGAP requested the DOE, thru NREB, the recognition and implementation of Vat zer0-rating for RE companies and projects, particularly to geothermal developers, supplies and contractors. The RE Developers are entitled to VAT zero-rating on their local purchases of goods, properties and services needed in all stages of RE generation and operations – from development, construction and installation of RE facilities, and the whole process of exploration and development of RE sources up to its conversion into power and the eventual sale of electricity generated through renewable sources. In cases, however, where 12% VAT is passed on to the RE Developers, they have the right to apply for refund of input taxes attributable/allocable to its zero-rated sale of fuel or power from renewable sources.

• • Virtual Courtesy Call with Usec Manny Juaneza

On July 2, the NGAP board participated in a virtual courtesy call with newly appointed Usec Juaneza, to discuss DOE’s initiative to promote geothermal development. USec Juaneza requested a document summarizing NGAP’s proposals. We gathered inputs from member companies and submitted a comprehensive document July 27. A centerpiece of the proposals was a Risk Mitigation Fund to support exploratory drilling. The RMF, which could be funded by revenues from Malampaya production, would be used to cost-share on drilling projects, or provide risk-mitigation insurance to cover the cost of failed exploration wells. Other high-priority items included: Priority Dispatch and Vat-Zero (discussed above); improvements to the Renewable Portfolio Standard program; and Feed-in Tariff for emerging geothermal technologies.

B. Membership

Our current active membership count stands at 365 (as of June 2020), mainly coming from geothermal developers such as APRI, EDC, MGI, and PGPC.  Other members are from the DOE, academe, and suppliers/contractors.

C. General Assembly Meeting and Geothermal Conference

The covid19 pandemic significantly impacted all of us and has changed our lives. In consideration of the safety of everyone, your Board has decided to cancel the physical implementation of the conference, but will opt for a virtual workshop through a webinar, which will be held in October 2020. Information on the actual dates, topics and panelists will be announced soon.

We are also planning to conduct a virtual General Assembly Meeting this year. We sure will miss the technical presentations and the camaraderie during the cocktails, but we will have to prioritize the safety of everyone this time. We will announce the final date of the GAM later on.

D. Finance Update

• • • The internal audit was completed and submitted to SGV on May 22, 2020
    • SGV completed the external audit on June 10, 2020
    • ITR was filed to BIR on June 11, 2020 through Landbank.
    • The audited financial statement was filed online on June 23, 2020
    • NGAP’s tax exemption was filed with BIR and still pending subject to the required amendments in certain provisions of the Articles of Incorporation.

E. International Geothermal Association (IGA) and Asia-Western Pacific Regional Branch (AWPRB)

Our very own NGAP Board of Trustee Marivic Olivar was recently elected as one of the new International Geothermal Association (IGA) board members. Marivic will serve as a board member for 3 years while concurrently serving the NGAP board.

On the other hand, Jeff Caranto was also nominated to join the AWPRB Forum members as the NGAP and Philippine representative. Jeff was also nominated and confirmed as the new Chairman of the Forum for the period 2020-2023.

F. NGAP donates to the earthquake victims in Brgy Ilomavis, Kidapawan City

Brgy Ilomavis is one of the host communities within the Mt. Apo Geothermal Project of EDC. From October to December 2019, the region was struck by a series of powerful earthquakes that devastated infrastructures such as buildings and homes.