GEOTHERMAL POWER PLANT

Chapter I: Introduction

NAME AND ADDRESS OF THE COMPANY

Tiwi Geothermal Power Plant

Tiwi Albay, Bicol Philippines

Political Region: V

BRIEF HISTORY

Between 1964 and 1968, the Commission on Volcanology initiated exploration of the Tiwi geothermal field. Geologic mapping and geological surveys were undertaken and temperature gradient holes were drilled during that period.

In early 1971, upon the invitation of the Philippine Government, Union Oil Company of California (Unocal) formed Philippine Geothermal, Inc. (PGI) to explore for and develop geothermal resources. Through a service contract entered into with the state-owned National Power Corporation (NPC) on September 10, 1971, PGI provided the technical expertise and a portion of the funding for exploration and subsequent development of the Tiwi geothermal area. NPC, for its part, was responsible for building and operating the power plants.

Even before the energy crisis of the early seventies, the Philippine government already initiated efforts to develop the country’s indigenous energy resources. The general intent was to lessen the country’s dependence on imported fossil fuels. In 1967, recognizing the potential and benefits of geothermal development, the Philippine Congress enacted Republic Act No. 5092, otherwise known as the Geothermal Law. RA No. 5092 stipulates that natural gases and geothermal energy resources belong to the State and enabled the government to set aside or reserve lands as geothermal reservations. Thereafter, Presidential Decree (PD) 739 was issued on August 1, 1970 that established 17,661 hectares in Albay Province to constitute the Tiwi geothermal reservation.

GEOGRAPHIC LOCATION

The Tiwi field has an installed capacity of 275 MWe and is located about 300-km southeast of Manila in the Albay Province. Exploration began in 1964, and power was first generated in 1979. By 1982 Tiwi became the world’s first water-dominated geothermal system to produce more than 160 MWe. Philippine Geothermal, Inc. (PGI) operates the steam field and the National Power Corporation (NPC) constructed and operates the power plants.

The Tiwi geothermal field is located on the northeast flank of Mt. Malinao, an extinct Quaternary stratovolcano in the East Philippine Volcanic Arc. This arc is a belt of upper –Miocene to Recent calc-alkaline volcanoes associated with subduction along the Philippine Trench. Mt. Malinao is composed dominantly of <0.5 million year-old andesitic lavas and lesser pyroclastic rocks.

LOCATION MAP

OWNERSHIP AND CAPITALIZATION

Government of the Republic of Philippines/National Power Corporation：NPC

Outline of Yen loan:Approved loan amount/ Disbursement.Exchange of notes/ Signing of loan Agreement.Loan interest

7,056 mil yen / 6,408 mil yenNovember 1994 / December 1994Interest rate: 3.0%, repayment period: 30 years (includinggrace period of 10 years),general untied loan

Disbursement completion January 2006Project Agreement ( worth of 1 billion yen or more)

Marubeni (Japan)

Consultant Agreement( worth of 1 million yen or more )

West Japan Engineering Consultant (West JEC)・Philippines Geothermal, Inc.（PGI）

Feasibility study (F/S) etc. 1992 Completion of F/S by Japan Consulting Institute1992 Completion of JICA master plan（Study on Luzon Grid P/P facility repair/maintenance & controlimprovement plan）

Relevance It was confirmed that the implementation of the project is consistent with thedevelopment needs and policy, both at appraisal and ex-post evaluation. Therefore,relevance of the project implementation is high.

Consistency with government policy and measures

Appraisal

“Mid-term Philippine Development Plan (1987-1992)” at around the project appraisal(January 1993) period says that it is important to strengthen infrastructures because it isthe base of sustainable social economic development. In particular, improvement ofreliability and efficiency of power supply was prioritized in power sector. The planlisted utilization of indigenous energy such as geothermal energy, and rehabilitation,improvement and repair of existing facilities as specific measures to be implemented.

“Mid-term Philippine Development Plan (1993-1998)” continuously emphasized the useof indegenous energy and encouraged diversification of energy sources for stable supplyat low cost. Geothermal power generation was focused as one of the solutions.The Philippines has continuously implemented a measure to strengthen the use ofindigenous energy resources since 1970s. The country emphasized the need to expandpower generation capacity based on domestic resources for stable and sufficient powersupply at lower cost. In response to severe shortage of electricity since the second halfof 1980s, the country positioned geothermal energy as the most promising domesticenergy resource to lower the dependency on imported energy resources in “PhilippineEnergy Plan：PEP 1992-2000”.

In response to the serious lack of electricity mentioned above, the country enacted BOTlaw in 1990 and Electric Power Crisis Act in 1993 to promote private participation inpower generation sector.

Consistency of the project with government policy mentioned in “Mid-term PhilippineDevelopment Plan” and “Philippine Energy Plan” above is confirmable because theproject emphasizes the importance of utilizing geothermal energy at appraisal. Theproject was implemented after the country introduced a policy to promote privateinvestment, but this is because the government decided both public and private capitalswere necessary to overcome the power crisis. From this perspective, the project isdeemed to be consistent with the government’s development policy.

Evaluation phase

Similarly, “Mid-term Philippine Development Plan (2004-2010)” at around the time ofevaluation (2008) focused on securing stable and sufficient power supply and promotedthe use of domestically produced energy as government policy, while encouraging thereform of power sector led by private corporations. “Philippine Energy Plan (PEP)2005-2014” upholds effective use of indigenous energy as a sector target, and specificallyemphasized the utilization of reproductive energy including geothermal energy.Securing power supply and effective use of domestic energy were emphasized in“Mid-term Development Plan” and “Philippines Energy Plan” continuously at evaluationphases, which underpin the project’s consistency with measures/policy.

Consistency with development needs

Power shortage persisted in the Philippines since the second half of 1980’s and peakedby power crisis in 1992-1993, during which power-cut that lasts 5 hours or longeroccurred frequently. Development of power supply source, recovery of output andimprovement of obsolete power generation facilities were needed for stable power supply.The project was requested by the country as an emergency measure to counter the powercrisis by rehabilitating power generation facilities. Accordingly, needs of the project isdeemed to have been quite high at appraisal phase.However, thanks to an active introduction of Independent Power Producer ： IPPcentering foreign capital, power shortage was resolved by 1994. As shown in Figure-1,power generation facility always had additional capacity of 3,000MW or more beyond thedemand, since economic crisis in Asia and at appraisal in 2008. Nevertheless, PowerSupply and Demand Outlook (2006-2014) compiled by the Department of Energy: DOE,estimates that power shortage will occur again around 2010, and therefore, strengtheningof power generation facility is necessary. Since the target of the project is to promote aneffective use of geothermal energy for balanced use of resources and stable power supply,there was a need for the project in times of evaluation, too

Aboitiz Power Corporation History

The Aboitiz Group’s involvement in the power sector goes all the way back to around 1918 when documents show the Aboitiz family owned around a 20% equity stake in the Visayan Electric Company (VECO), which was started by a group of Cebu-based businessmen in 1905.

In 1930, Aboitiz patriarch Ramon Aboitiz purchased from the Borromeo family the Ormoc Electric Light Company, the first utility the Aboitiz Group actually owned and managed. It was also in the 1930s when the Group partnered with Francisco Such for Jolo Power Company. In 1935, Cotabato Light and Power Company was acquired, followed by Davao Light and Power Company in 1946.

In 1978, the Ormoc and Jolo utilities were divested and converted into electric cooperatives. That same year, the Hydro Electric Development Corporation (Hedcor), was organized to venture into the hydroelectric power generation business. By 1990, Hedcor had a portfolio of 14 plants and 36 MW of installed capacity. In 1996, the 70-MW Bakun hydro plant was commissioned by Luzon Hydro Corporation, an Aboitiz joint venture with Pacific Hydro Pty Ltd of Australia.

AboitizPower was incorporated in 1998 to hold the Group’s investments in the power sector. The company initially held only power generation assets but in early 2007, holdings in the distribution utilities Davao Light, Cotabato Light, Subic EnerZone, San Fernando Electric and VECO were transferred to AboitizPower. Later that same year, ownership in Balamban EnerZone and Mactan EnerZone were added into the company.

In December 2006, SN Aboitiz Power-Magat, the joint venture between AboitizPower and SN Power of Norway, bid for and subsequently awarded the 360-MW Magat hydro plant in Northern Luzon.

AboitizPower had an eventful year in 2007. In July, it became publicly listed at the Philippine Stock Exchange. In August, together with Vivant Energy Corporation of the Garcia Group, partnered with Global Business Power Corporation of the Metrobank Group to form Cebu Energy Development Corporation (CEDC) for the construction and operation of a 246-MW coal-fired plant in Cebu island. This plant is due for commissioning in the first quarter of 2010. In November, AboitizPower closed the agreement for the purchase of a 34% stake in STEAG Power, which owns and operates a 232-MW coal-fired plant in Mindanao island. In December, SN Aboitiz Power-Benguet, the joint venture between AboitizPower and SN Power of Norway, won the bid for and awarded the Ambuklao-Binga hydropower complex consisting of the 100-MW Binga and 75-MW Ambuklao power plants.

In July 2008, AboitizPower, through wholly owned subsidiary Aboitiz Power Renewables, Inc., (APRI) won the bid for and awarded the Tiwi-Makban geothermal facilities. Tiwi-Makan consists of several power stations located in the provinces of Quezon, Laguna, Batangas and Albay in Luzon island. The Tiwi-Makban geothermal plants recorded a combined peak generation of 467 MW in 2009.

In October 2009, AboitizPower, through wholly owned Therma Luzon, Inc. (TLI), bid for and was awarded an Independent Power Producer-Administrator (IPPA) contract for the output of the 700-MW coal-fired Pagbilao power plant in Quezon province.

In February and March 2010, AboitizPower through its subsidiary, Therma Mobile, assumed ownership and operations of PB118 (renamed Mobile 1) and PB117 (renamed Mobile 2), after acquiring the two power barges from PSALM for U.S.$30 million through a negotiated bid concluded last July 31, 2009. Each of the barge-mounted, diesel-powered generation plants has a generating capacity of 100 MW. PB 117 and PB 118 are moored in Nasipit, Agusan del Norte and Barangay San Roque, Maco, Compostela Valley, respectively.

Within the same month of March, 2 greenfield projects became operational. The first of two units of the Sibulan Hydro power plant, operated by Hedcor Sibulan Inc, started its commercial operations with 26 MW. The second unit, or 16.5 MW is expected to commence commercial operations within second quarter of 2010. Meanwhile, unit 1 of the coal-fired power plant of CEDC with 82 MW was also commissioned in March, while the second and third units by the second and fourth quarter of 2010, respectively.

Structural organization for operation and maintenance

Environment surrounding power sector in the Philippines had dramatically changedfrom the time of the project appraisal to today. The impact is making changes to theoperation and maintenance of the power plant. More specifically, Electric PowerIndustry Reform Act：EPIRA was enacted and entered into force in June 2001, andbecause of this, decision was made to split NPC, an implementing organization of theproject, into a power generation company and a power transmission company, andprivatize each (power generation asset is to be sold).In response to the reorganization of power sector, bidding of both Tiwi and Mak-banpower plants took place at the end of July 2008, to sell their asset and privatize the twopower plants together. AP Renewables (a company newly established to operateTiwi/Mak-ban power plants), wholly owned subsidiary of Aboitiz Power Corporation（APC）successfully won the bidding.As of December 2008, operation and maintenance of the power plants werecontinuously undertaken by Tiwi Geothermal Power Plant Office under NPC, aspre-sellout transitional arrangement. Currently, 167 employees of NPC (2 supervisors,65 operators, 63 maintenance staffs, 19 administration and finance division staffs and 18engineers) are working at Tiwi Geothermal Power Plant (see Figure-5).Handover of the power plant to AP Renewables is planned to take place around May2009, and operation, maintenance, control and management of the power plants will alsobe completely transferred from NPC to AP Renewables by then.

Impact to the environment

At first, acquisition of Environment Compliance Certificate： ECC was considered not necessary for the project, because it is a rehabilitation project to recover the function, not involving establishment of a new plant. However, ECC was actually issued in September 2002, and based on that, NPC has been implementing environmental monitoring during and after the project implementation.The result was compiled by NPC every quarter. Environment Control Bureau, local government, power plants, Steam Supply Service Company and NGOs also have started joint monitoring activities.At the project, equipment to dilute hydrogen sulfide gas was installed to mitigate theimpact of the gas emission, as a measure to improve environmental condition.According to the monitoring results, the project satisfies the standard of the country, andso far, no specific problem has been pointed out in compiled reports. Temporary

dwellings are sparsely located in areas around the power plant No serious problem was reported after visiting and hearing from some residents.

Impact to social environment, land acquisition and relocation of residentsThe project does not involve land acquisition or resettlement because it is arehabilitation project of existing facilities. According to the provision on tax payment tothe local government, 0.01 pesos are taxed per the sale of 1kWh electricity. The projectcontributed to increase earnings from electricity sales and tax revenue for the localgovernment, resulting in improvement to the standard of living and introduction of socialwelfare programs for residents in the area.

Chapter II: Design Consideration

PURPOSE OF THE PROJECT

Enhance the efficiency and reliability of the power generation facilities byrepair/replacement of the existing facilities of Tiwi Geothermal Power Plant in thePhilippines, effectively use indigenous energy, and ultimately improve the balance ofdemand and supply of power at Luzon Grid.

Demand of power in the Philippines is converted in Luzon Grid by about 75%, however, construction or addition of a new power generation facility didn’t take place until the second half of 1980s. Due to the deterioration of facilities, power generation function was seriously deteriorated and chronic power-cut persisted due to the lack of electricity until the first half of 1990s.the basic idea of the 3 energy policies upheld by the government of the Philippines were “reliable power supply at reasonable price”, “promotion of efficient energy use” and “development of energy with minimum environmental impact”. Based on the basic idea, the country targeted to reduce dependency on imported oil from 51.4% in 1986 to 46.9% in 1992 and strengthen geothermal power generation.

The Philippines has the second most abundant geothermal energy In the world after the U.S in production and utilization of geothermal energy.

GENERAL CONSIDERATION

Geothermal power plants use relatively small acreages, and don't require storage, transportation, or combustion of fuels. Either no emissions or just steam are visible. These qualities reduce the overall visual impact of power plants in scenic regions.

Geothermal technologies offer many environmental advantages over conventional power generation:

Emissions are low. Only excess steam is emitted by geothermal flash plants. No air emissions or liquids are discharged by binary geothermal plants, which are projected to become the dominant technology in the near future. Salts and dissolved minerals contained in geothermal fluids are usually reinjected with excess water back into the reservoir at a depth well below groundwater aquifers. This recycles the geothermal water and replenishes the reservoir. This system will prolong the life of the reservoir as it recycles the treated wastewater. Some geothermal plants do produce some solid materials, or sludges, that require disposal in approved sites. Some of these solids are now being extracted for sale (zinc, silica, and sulfur, for example), making the resource even more valuable and environmentally friendly.

Several attributes make it a good source of energy.

First, it's clean. Energy can be extracted without burning a fossil fuel such as coal, gas, or oil. Geothermal fields produce only about one-sixth of the carbon dioxide that a relatively clean natural-gas-fueled power plant produces, and very little if any, of the nitrous oxide or sulfur-bearing gases. Binary plants, which are closed cycle operations, release essentially no emissions. Geothermal energy is available 24 hours a day, 365 days a year. Geothermal power plants have average availabilities of 90% or higher, compared to about 75% for coal plants. Geothermal power is homegrown, reducing our dependence on foreign oil.

SCHEMATIC DIAGRAM OF GEOTHERMAL POWERPLANT

Simplified flow diagram for single flash geothermal power plant

Simplified flow diagram for double flash geothermal power plant

Simplified flow diagram for binary geothermal power plant

Simplified flow diagram for direct steam geothermal power plant

DESIGN AUXILIARY

PUMP

The operating characteristics of deep well pumping equipment in a geothermal well power-generation system are observed by cooperating sensor and communication elements permanently associated with the geothermal well equipment itself. Bridge circuit sensors detect well water temperature and water pressure below and above the pump, while a further sensor detects pump rotational speed. The data is transmitted by a multiplexing acoustic communication link coupled to receiver and display means located at the earth's surface. An electrical generator driven at the pump speed serves as the rotational speed pick off and additionally supplies multiplexing and signal processor power for use at the down-well site. The signal processor includes novel diode circuits in each bridge sensor channel for monitoring the operation of the individual sensors and their common power source, thereby providing a surface display of the parameter being measured by a particular sensor channel and additionally providing a calibrating display of the operating status of that channel.

GEOTHERMAL TURBINE

A geothermal turbine for converting the energy of two-phase geothermal fluids to rotary power includes a housing having a generally cylindrical rotor chamber with a circular manifold, and a plurality of peripheral nozzles for communicating fluid to the rotor chamber, and a rotor mounted coaxially within the chamber incuding a plurality of converging overlapping blades mounted around a central hub and positioned within the rotor for engagement by fluid from the nozzles.

The planning specifications for the 110MW turbine are as follows:

Type: Tandem compound, four-flow condensing turbineRated output: 1 10,OOOkWSpeed: 3,600 rpmMain steam pressure: 7.04 kg/cm2gMain steam temperature: 179.4 CGas contents: 0.1 - 2.2% (weight percentage)Exhaust pressure: 102mmHg abs.Governor: Mechanical hydraulicMain stop valve: 34 inches (bore) x 2By-pass valve: 10 inches (bore) x 1 (for main steam stop valve)Control valve: 24 inches (bore) x 4

COOLING TOWER

A cooling tower is a heat rejection device, which extracts waste heat to the atmosphere though the cooling of a water stream to a lower temperature. Common applications for cooling towers are providing cooled water for air-conditioning, manufacturing and electric power generation. The generic term "cooling tower" is used to describe both direct (open circuit) and indirect (closed circuit) heat rejection equipment. A direct, or open-circuit cooling tower is an enclosed structure with internal means to distribute the warm water fed to it over a labyrinth-like packing or "fill." The fill may consist of multiple, mainly vertical, wetted surfaces upon which a thin film of water spreads. An indirect, or closed circuit cooling tower involves no direct contact of the air and the fluid, usually water or a glycol mixture, being cooled. In a counter-flow cooling tower air travels upward through the fill or tube bundles, opposite to the downward motion of the water. In a cross-flow cooling tower air moves horizontally through the fill as the water moves downward. Cooling towers are also characterized by the means by which air is moved. Because evaporation consists of pure water, the concentration of dissolved minerals and other solids in circulating water will tend to increase unless some means of dissolved-solids control, such as blow-down, is provided. Some water is also lost by droplets being carried out with the exhaust air (drift).

MIST ELIMINATOR

Special devices developed in1947 to remove mist from gas streams. Now known as mist eliminators, these devices provide a large surface area in a small volume to collect liquid without substantially impeding gas flow. Unlike filters, which hold particles indefinitely, mist eliminators coalesce (merge) fine droplets and allow the liquid to drain away. Gas typically flows upward through a horizontal mist eliminator.

More recently, advances in technology have enabled substantial progress in mist eliminator designs, materials, and application expertise. New products and methods of use have been found highly effective for many purposes, especially the following:

• Increasing throughput• Downsizing new vessels• Improving product purity• Cutting operating costs• Reducing environmental pollution• Reducing downstream corrosion• Increasing recovery of valuable liquids

MOISTURE SEPARATOR

Moisture separators are used to remove as much moisture from the steam as possible before it goes to the turbine. In boiling water reactors (BWR) the steam going to the turbines is close to saturated conditions. In pressurized water reactors (PWR) the steam going to the low-pressure turbines also passes through moisture separators. If moisture in the form of water droplets enters the turbine it causes erosion damage to the turbine blades.

The condensate that accumulates in the moisture separators is drained off to be used in feedwater heaters or forwarded to the condenser. The temperature and pressure of the condensate are at saturation conditions, and a decrease in pressure will cause it to flash to steam. Flashing often occurs in the drain valves where the pressure in the next stage of the process is lower. The volume of the steam is much greater than the volume of condensate per pound mass, therefore, to pass the same flow rate through a pipe the velocity of the steam is much higher. When flashing occurs inside a control valve it usually begins just after the final pressure drop stage. Here the condensate is in a transitional state between liquid and vapor. Since the vapor moves through the downstream portion of the valve faster than the liquid, the water droplets are accelerated to high velocity. When these droplets strike the valve body or downstream piping they can cause erosion. The high velocities of the vapor can also be a source of noise and vibration, leading to valve damage.

Flowserve Anchor/Darling Valves with MSMP (Multi Stage Multi Path)

MSMP trim channels the flow through a series of orifices to reduce the pressure in stages. This prevents the condensate from cavitating inside the valve and dissipates most of the energy before the last stage. Flashing is only allowed across the last stage. The velocity of the fluid is kept low to prevent erosion of the valve body.

FE trim works well for applications requiring one or two stages of pressure reduction. Each stage consists of many small holes drilled into cylinders. The condensate pressure is reduced by directing the flow through the small holes. Flashing occurs across the last stage and velocities are kept low to prevent erosion of the valve body. Both styles of trim, FE and MSMP, reduce noise and vibration.

Wellhead Control Valves

Wellhead Control Valves are designed for safe and convenient pump-in, pump-out, and retrieval of downhole hydraulic “free” pumps.

As part of your hydraulic pumping system, the Weatherford Oilmaster Wellhead Control Valve is designed to provide your installation that extra measure of convenience and safety. Located at the wellhead, this component controls the flow direction of the high-pressure fluid that powers the downhole pump. Shift the lever and the power fluid flows down the tubing to run-in the “free” pump and operate it. To pump-out and retrieve, another shift of the lever directs the flow down through the annulus and up the tubing, lifting the pump to the surface. Once at the surface, a built-in bypass circuit lets you exchange the pump without shutting down

your power source. This feature helps prevent fluid shocks when reversing flow direction, too.

Features and Benefits Extended Catcher Nipple - this allows bleeding of pressure and gas out of tubing before removing the pump. Swivel Block Design - 60° rotation gives maximum flexibility in aligning control assembly with connecting lines during hookup. Large Fluid Passages - inlets and outlets allow high volume flow rates. Welded or threaded ends in several sizes are available. Pressure Relief Valve -protects well tubulars against excessive pressure build-up during pump-out cycle. Opens at 1,500 psi and resets automatically when pressure is relieved. Choice of Inlet Connections - flanged inlet nipple for casing “free” installations. Slip joint connection with adjustable offset for parallel string installation. Pump Catcher for Easy Retrieval - to change out, shift the lever and the downhole “free” pump will flow to surface where the indicator announces pump arrival. Unit latches in the catcher unattended, without pressure build-up. 4-Way Lever Control - swift and easy actuation. Valve has three positions: pump-in and operate, bypass and pump-out. Pressure Gauge - with pulsation dampener, shows the circulating pressure and pump strokes. Lets your pumper know just what is happening downhole. Low Maintenance Valve - rugged design with few wearing parts. Replaceable elements include stainless steel sleeve and seat and metal-sprayed spool. Power Fluid Bypass -stops high-pressure accumulation at welllhead during pump removal. Controls the pressure setting when quick changes of flow direction are needed to unseat the downhole pump. Gives shock-free reversal of fluid flow direction

Down Hole Pumps

A down hole pump is a tool used in the well which admits fluid from the producing CBM well into the tubing and lifts that fluid to the surface. A down hole pump is used in conjuction with the pump jack and its rod string. The entire process of lifting fluid by means of a down hole pump works as a straw in a glass of water.

Downhole submersible pumps are a key component for large scale power generation from geothermal resources. Both Hydrothermal and Enhanced Geothermal Systems require a robust serviceable pump capable of bringing heat to the surface. Both literature review and interviews with geothermal experts confirmed the importance of such a pump in advancing the development of the technology.

Specification:

Pump Type: Maximum Discharge Flow: Maximum Discharge Pressure: Centrifugal Pumps Less than 0.012 GPM Less than 15 psi

Drum Pumps 0.012 to 0.55 GPM 15 to 46 psi

Diaphragm Pumps 0.55 to 12 GPM 46 to 145 psi

Double Diaphragm Pumps

12 to 120 GPM 145 to 1,263 psi

Dosing Pumps 120 GPM and up 1,263 psi and up

BRINE BOOSTER PUMP

Specification:

Maximum Discharge Flow: Maximum Discharge Pressure: Horsepower: Less than 0.76 GPM Less than 165 psi Less than 0.78 HP

0.76 to 3 GPM 165 to 1,356 psi 0.78 to 1 HP

3 to 12 GPM 1,356 to 3,550 psi 1 to 2 HP

12 to 120 GPM 3,550 to 9,700 psi 2 to 5 HP

120 GPM and up 9,700 psi and up 5 HP and up

STEAM JET INJECTOR

Steam jet ejectors are often used to pull vacuum on surface condensers, evaporators, etc. A high pressure, motive, fluid (usually steam) enters the ejector chest through a nozzle and then expands. This converts its pressure energy to velocity. The increased velocity causes reduced pressure, which sucks in and entrains gas from the suction. The diffuser section then recompresses the mixed steam/gas stream to some intermediate pressure. The exhaust is then sent to a condenser which quickly condenses the steam at a low pressure and temperature so that the volume quickly decreases.

Specification:

Ultimate Operating Vacuum: Pumping Speed / Displacement:

Venturi Jet Type / Media:

Less than 52 torr Less than 0.77 CFM Venturi Air Jet

52 to 161 torr 0.77 to 2 CFM Liquid Eductor / Ejector

161 to 338 torr 2 to 4 CFM

338 to 696 torr 4 to 14 CFM

696 torr and up 14 CFM and up

STEAM CYCLONE SEPARATOR

A cyclone type separator is used to clean the geothermal steam that is extracted from a geothermal reservoir beneath the earth by removing brine, condensed fluids, dirt, and some other particulates that are harmful to the turbine blades of a power plant.

Specification:

Applications: Airflow: Minimum Particle Size Filtered: Abrasives Less than 700 SCFM No more than 0.26 µm

Coolant / Oil Mist 700 to 1,646 SCFM No more than 0.6 µm

Explosive Media 1,646 to 4,275 SCFM No more than 4 µm

Fine Powders 4,275 to 13,390 SCFM No more than 46 µm

General Cleaning 13,390 SCFM and up :

MAINTENANCE NEEDS AND PRACTICES IN GEOTHERMAL POWER PLANTS

The processes that give rise to geothermal waters take place naturally deep beneath the surface of the earth and involve water-rock interactions at high pressures and elevatedtemperatures. The resultant fluids contain varying concentrations of dissolved and suspendedrock-based elements such as silica, chlorides, carbonates and sulfur compounds among othersin varying quantities. The fluids reach the surface equipment with varying quantities of theseelements and quantities of gases depending on the geothermal field. The presence of theseelements in geothermal fluids present major challenges in the maintenance of equipment ingeothermal power plants (GPPs). The suspended solids which include silica, chlorides androck cuttings are transported in the hot water and can settle at the bottom of equipment andcan cause blockage on the hot water equipment and drains. The dissolved solids like silica,chlorides and sulfur precipitate when the saturation conditions are reached and cause scalingon the walls of equipment. The scaling causes blockages, sealing and impedes normalfunctioning of equipment. Dissolved and mixed gases which include hydrogen sulfide (H2S),oxygen and carbondioxide (CO2) can make the solution acidic which can cause acceleratedcorrosion in the presence of heat, water and oxygen. To understand and determine maintenance needs of GPPs, a failure mode and effect analysis (FMEA) was performed. All the potential failures for each equipment in the plant wereestablished together with the all the possible causes each potential failures. All the possibleconsequences are determined and the maintenance actions needed to prevent the potentialfailure or mitigate after failure has occured can be determined by analysing the failure mode.

A detailed FMEA for a GPP is presented in Appendix 1. A summary of potential failures and corrective and preventive maintenance needs for GPPs are given in Table 8.

The maintenance practices in GPPs vary from vary from one field to another depending onthe nature of field, the plant design and the inherent practices. Each plant has its own methodof doing maintenance based on experience and unique problems in the plant in addition torecommendations by manufacturers of equipment. Visits and interviews were contacted inselected GPPs in Iceland, in addition to experience from Olkaria GPPs in Kenya. Anoverview of maintenance practices in these power plants in relation to properties of thegeothermal fluids is discussed.

EVALUATION MAINTENANCE FOR A GEOTHERMAL POWER PLANT

Main equipment in of a typical GPP

A typical GPP has hundreds of operating equipment that have to be maintained to preserve their functionality, maintain plant safety and improve plant efficiency. A generalized flow diagram for a typical electricity producing GPP is shown in Figure 14 below. Only majorprocesses and equipment are shown. A complete assembly of a GPP consist of thousands ofcomponents that make it a complex.

A SIMPLIFIED PROCESS FLOW DIAGRAM FOR A GEOTHERMAL POWER PLANT

In a typical electricity producing GPP, the main processes are steam gathering andtransmission, turbine and its auxiliaries, generator and electrical, Gas extraction, coolingprocesses and instrumentation and controls. A summary of the main components in theprocesses is shown in Table 8. Only the major components under each system are presented.

Equipment in a typical an electricity producing GPP

System/process Main Equipment Main Components

Production andtransmission

Wellhead

Separator station

Steam transmission

Water transmission

Master valves, flow control valve, two-phasepipelineSeparator vessel, pressure relief device, level controlSteam pipe, condensate drains, steam pressure,controllers, steam driers, steam flow metersHot water pipeline, hot water pressure relieve

Turbine andauxiliaries

Inlet devices

Steam Turbine

Oil system

Steam strainer, emergency valves, governor valvesRotor, nozzles, diaphragms, bearings, casing, glandsealsOil pumps, servomotors, oil tanks, oil pipes

Cooling system Cooling towers

Water pumps

Condenser

Fans, motors, gear reducers, structure, fills, coldwater ponds, strainersLarge hot well pumps and motors, auxiliary pumpsCondenser heat exchangers, nozzles, gas cooling

Gas ExtractionSystem

Steam jet ejector

Vacuum pump

Control valves, isolating valves, nozzles,intercoolersVacuum pump, water seal, motor

Generator andElectrical

Generator

Transformers

Protection

Rotor, stator, exciter, bearings, coolerStep up transformers, station transformersRelays, switchgears,

Failure mode and effect analysis (FMEA) for GPPs

Failure modes define the ways that failure of equipment occurs and the circumstanceassociated with the failure. The causes of failure refer to the likely originators of the failurewhile the effects of failure define what happens if and when failure occurs. The effects offailure include functional, the safety, operational and the economic consequences. The effectsof the potential failure affect the maintenance approach to be adopted for the particularequipment whether to prevent the failure from happening or correct the failure after ithappens. In doing a FMEA for GPP, the main equipment was grouped into steam gatheringand transmission, Turbine and accessories, Cooling and the non-condensable gas extractionsystem, the generator and electrical system and Instrumentation, control and protection. TheFMEA analysis for each of the systems in a GEOTHERMAL POWER PLANT

FMEA for the steam gathering and transmission equipment

The main equipment in the steam gathering and transmission system consist of different types and sizes of valves which include master valves, service valves, drain valves and controlvalves; pipelines which include two phase pipelines, hot water and steam pipelines; separatorsthat include steam separators, mist separators and condensate drains; silencers and hot waterdisposal system.

Scaling Blocked drains Corrosion Scaling Poor Wrong design Material

Wrong Scaling Specification Deformation Malfunction Corrosion Bursting

Cause effect diagram for a geothermal steam gathering system

ValvesLost Disk, Leakage

SeparatorWrong quality, Rupture

Effects Wasted Resources Cost of Downtime Cost of Repair Safety and

Environment Wet Steam Loss of well

PipelinesBurst, Leakage deformation

Pressure devicesWrong operation

FMEA for turbine and auxiliaries

The turbine equipment consists of the turbine rotor and rotor bearings, the casing anddiaphragms and the steam glands. The auxiliaries include steam control valves, emergencysteam valves and the steam strainers. The turbine rotor is one of the most expensiveequipment in GPPs and requires well designed maintenance processes to minimize the risk offailures. A summary of FMEA for a turbine system is illustrated in Figure below where thepossible failures are given at the roots, the possible causes as links and the effects at the headof the diagram.

Wet steam Worm glands Corrosion Scaling

Poor alignment Worm valve seats Blocked Scaling strainer

Scaling Broken impeller Wet steam Blocked draings Corrosion Poor operation

Cause effect diagram for a geothermal turbine and main accessories

TurbineWorm blades, Vibrations

Inlet valvesSticking, leaking, hunting

Effects Vibration of rotor Reduced efficiency Loss of control Safety Cost to repair

CasingBlocked blades

Loss of interstage seals

Oil pumpsInadequate flow

Low pressure

FMEA for the Cooling and NCG extraction system

The cooling system in a GPP is consists of the cooling towers made up of cooling fans and cooling tower structures, hot well pumps and pipes and the steam condenser. The NCGextraction system consists of the gas cooling section in the condenser, the steam jet ejectorsand vacuum pumps and the inter-condensers. A summary of the FMEA for the system issummarized in Figure below.

Scaling on tubes Corrosion on tube Fouling of fills Fan blade failure

Blockage Wear Bearing of nozzles failure Water seal Scaling Vibration break

Cause effect diagram for geothermal cooling ad gas extraction systems

FMEA for the generator and electrical system

Cooling tower Condenser

Effects Poor cooling Loss of vacuum Loss of efficiency

Vacuum pump Ejectors Hotewell pumps

The generator consists of the generator rotor and stator, rotor bearings, generator air coolers and the excitation system. The equipment grouped as electrical system consisting of power cables, switchgear, transformers, motors and relays and several electrical gadgets. Figure above is an illustration of the failure cause effect diagram for the generator and electrical system which shows what can fail, the causes and what happens when the failures occur.

Misalignment Poor cooling

Loosened wedges Corona effects Poor lubrication of bearings

Misaligned Clogged air fins Wrong operation Dirty tubes

Cause effect diagram for the generator and electrical systems

FMCEA for instrumentation, control and protection system

The instrumentation, control and protection are very important parts of a GPP. Theinstrumentation covers a wide variety of instruments installed in the GPP. The type of

Generator rotorVibration, rubbing

Generator statorHeating, arcing

Effects Downtime cost Safety concern Cost to repair

ExcitationUnder-voltage, vibration

Stator coolersNo flow, leakage

instruments depends on the level of technology in the design of the plant but they all serve thepurpose of monitoring and communicating the performance of the GPP. The instrumentsinclude pressure gauges, temperature gauges, vacuum meters, flow meters etc. The controlfunction is important to ensure the GPP operates within the required limits. Control systemreceive measured parameter signal and use the value of the signal to generate a control signalto keep the performance within what is desired. One common control system in GPPs is thesupervisory control and data acquisition (SCADA) system. The protection systems include allthe systems installed to ensure the plant components are protected. They include theprotection relays for the generator, transformers and the turbine protection. Because of thesensitivity of these systems, their sound operation is critical. A FMEA for the system ispresented in Figure below.

Damage No power cables

Poor calibration H2S damage

Wrong calibration H2S damage

H2S damage Wrong instrument

Cause effect diagram for instrumentation and control system

Summary of maintenance needs for a GPP

From the findings of the FMEA for each component, the maintenance actions needed toprevent or correct the failures are deduced. The mode of execution of the maintenance needswill depend on the maintenance approach applied and will be guided by the managementmethod applied. Corrective maintenance actions will be required to correct equipment failurethat has occurred. In some cases, it is effective to perform a failure preventive maintenance

SCADAWorking signal, No signal DCS

Effects Safety risk Inefficiency Downtime

Relays Instruments

instead of corrective maintenance. The preventive maintenance actions are guided bymeasured indicators of potential failure or based on interval period derived from experienceor vendor recommendations. From the FMEA, it is seen that most of the potential failures inGPPs are linked to the chemical and physical properties of the geothermal fluids. The effectsof failures range from safety to performance loss. The nature of potential failures affect thetype of maintenance procedures adopted whether to prevent or respond to the failures. Asummary of preventive and corrective maintenance needs for each failure modes in a GPP areshown.

Summary of preventive and Corrective maintenance needs of a GEOTHERMAL POWER PLANT

Failure mode Preventive actions Corrective actions

Steam gatheringSticking valvesLeaking glandsBlocked pipesWorn valve discsFailed trapsDislodged pipes

Review operation of valvesRedesign maintenancescheduleInhibit scaling agents likesilicaRedesign of steam trapsCheck pipe designs

Replace glandsOverhaulReplace

Turbine accessoriesScaling on rotor anddiaphragms bladesWear and corrosionSticking of valvesRotor vibration

Review operating pressuresand flowCheck the steam dryingprocessesCheck the turbine alignmentInvestigate and correctbearing lubricationRegular Stem free test ofvalves

Detect and identifythe problemAddress the causeRepair the failed partRedesign the system

Cooling & NCGFouling of condensertubesBlocking of nozzlesFouled cooling towerfinsScaling of ejectorVacuum pump waterseal breaking

Improve quality of coolingwater by treatment and addingfresh waterImprove steam processingChemical dosing of coolingtowerCheck operating pressures forsteam ejectors and

Detect and identifythe problemAddress the causeRepair the failed partRedesign the system

vacuumpumps

Generator ElectricalRotor vibrationLoose stator coilsArcing of switchgearsFailure of motorsFailure oftransformers

Ensure turbine-generator exciteralignmentEliminate causes of coronaeffectsMaintain correct switchgearoperations and contactsMonitor all motorsperformanceRegular test transformer oil,contacts and temperatures

Detect and identifythe problemAddress the causeRepair the failed partRedesign the system

Instruments, protection& controlsH2S damage ofcopperWrong control signalFailure of protectiverelay

Use non copper materialsIsolate copper parts from H2Seg air conditioningInstall backup safetyInstall backup control circuits

Replace damagedcopper partsCalibrate equipmentRepair or replacedamaged parts

The common maintenance problems related to the physical and chemical properties of the geothermal fluids in geothermal power plants include the following: Silica scaling on steam pipes, valves, separators and turbine nozzles H2S attacks on exposed copper material of switchgears, transformers, motors etc Extensive surface corrosion of ferrous metals of pipes, pipe supports, structural frames Blockage of drains due to deposits of suspended solids and silica in the fluids Sticking of valves as a result of scaling cement Leaking of valves due to worn valve discs Failure of steam traps and condensate drain devices Bursting of pressure safety discs due to pressure fluctuations

ME524(Tiwi Geothermal Power Plant)

Mark Anthony De SosaMark Joseph Nonan

Percival SolimanJake VillanuevaAnthony Melo

Contact no.09204055245

CHAPTER III -ENGINEERING REPORT

Power shortage persisted in the Philippines since the second half of 1980’s and peaked by power crisis in 1992-1993, during which power-cut that lasts 5 hours or longer occurred frequently. Development of power supply source, recovery of output and improvement of obsolete power

generation facilities were needed for stable power supply. The project was requested by the country as an emergency measure to counter the power crisis by rehabilitating power generation facilities. Accordingly, needs of the project is deemed to have been quite high at appraisal phase.

However, thanks to an active introduction of Independent Power ProducerIPP centering foreign capital, power shortage was resolved by 1994. As shown in Figure-1, power generation facility always had additional capacity of 3,000MW or more beyond the demand, since economic crisis in Asia and at appraisal in 2008. Nevertheless, Power Supply and Demand Outlook (2006-2014) compiled by the Department of Energy: DOE, estimates that power shortage will occur again around 2010, and therefore, strengthening of power generation facility is necessary. Since the target of the project is to promote an effective use of geothermal energy for balanced use of resources and stable power supply, there was a need for the project in times of evaluation, too.

Actual and trend of peak power demand at Luzon Grid, capacity of power generation facility and power generation capacity

Output

Outline of Tiwi Geothermal Power Plant

Plant Power Start of Rated output

generator operationPlant A Unit 1 January 1979 55MW

Unit 2 May 1979 55MWPlant B Unit 3 January 1980 55MW

Unit 4 April 1980 55MWPlant C Unit 5 December 1981 55MW

Unit 6 March 1982 55MW

Total 330MWNoteCompiled by Tiwi Geothermal Power Plant materials.

However, according to the study on power generation capacity of Tiwi Geothermal Reservoir and the scope of the development (January 1990), electric energy possibly produced by heat reserve there was estimated to be 250MW x 25 years. This can be concluded as an overestimate since the volume of steam was short of even fully operating 4 units at a time of evaluation (2008) as detailed hereinafter, after delayed start of the operation. Further, capacity factor was set at 70% then. Based on the above, it is estimated difficult to achieve 85% availability factor of geothermal power generation facility plan set in Japan then. Facility repair/improvement plan should have been made based on the volume of steam.

After all, the project plan was reviewed in 2001 due to substantial delay in the project start as detailed hereinafter, and it has led to find out the decrease of steam flow. In response to this, power generation facility for repair/improvement was reduced from 6 units to 4 units, which can be evaluated for making operation of the power plant more sustainable by reflecting the actual situation.

As a conclusion, despite overestimation at the appraisal of the project planning, the scope was adjusted to fit the reality for implementation; therefore, the project is highly relevant with “Mid-term Philippine Development Plan”, “Philippines Energy Plan” and development needs at times of both appraisal and evaluation.

Efficiency ( Rating)

Project implementation was delayed substantially (261%) and project cost was slightly larger than planned (137% for one facility); therefore, the evaluation for efficiency is low.

Output :

Power generation facilities

As aforementioned, the project was planned to repair/improve all the 6 units at appraisal but actually, partial repair was done to 4 units (1, 2, 5 and 6). This scale back of the repair scope was mainly due to the continuous reduction of steam flow from geothermal well year after year that resulted in limited steam supply. Repair to the 4 units was a partial one focused on recovering function of power plant and safety operation.

Summary of changes to project

Contents Process/Reason of Planning/Changes

Plant at Appraisal ( Jan. 1993)

Replacement, repair installation etc. of turbine, power generator, gas extract device and cooling tower units 1 – 6 (55 MW each)

Reviewed necessary scope of repair/improvement aimed at recovering reliability and effectiveness of units 1 – 6 .

Output at the first contract(Related to the scope changeAgreed by former JBIC;May 2001)

Implementation Period:Jun.2003 – Feb.2004

Limit repair to the recovery of function and stable operation of 4 units (unit 1, 2, 5, and 6). After repair, units 1 and 2 are strengthen to 60MW while units 5 and 6 to 57MW.Scope originally planned but excluded due to duplication of scope with NPC project; repair replacement of honing machine, control board recorders, indicators, converters and controllers for turbine repair/replacement of air conditioning system, replacement of turbine supervisory instrumentation, purchase of equipment for calibration, partial replacement of disconnecting switches for switchyard, repair/check of main cooling water pipeline, procurement of cooling tower materials and environment monitoring equipment.

With reduced steam flow, it was decided that there is no sufficient source of power for 2 units, therefore, only 4 units were subject to repair. In addition the government of the Philippines shifted from “full repair” to “partial repair” based on their own review result, which concluded partial rehabilitation was sufficient to recover the function. According to technical examination by yen loan division of former JBIC (current JICA), the change is reasonable because recovery of function is possible if rehabilitation planned by NPC is properly implement. Former JBIC requested the government not to make further reduction to the scope.

Output at additional Contract (Related to the second scope changeAgreed by former JBIC;Feb.2004)

Implementation period;Jun.2004 – Dec. 2005

Added the scope of repair for 4 units (unit 1, 2, 5, and 6), because it is considered necessary for stable operation. There were 27 newly added repair/improvement items (facilities/parts) in total including replacement of cooling tower for unit 5 and 6 and purchase of switch gear and motor for gas extract equipment for unit 2

NPC, a contractor and a consultant jointly carried out a study in Dec.2001 and May 2002, and confirmed stable operation is difficult, contrary to the expectation. Also, additional repairs turned out to be necessary to satisfy conditions of steam supply contract. The government of the Philippines decided to exchange additional contract, to which former JBIC agreed because the addition was originally included as part of the scope and deemed necessary at appraisal and therefore, necessary to achieve the target of the project.

Note: compiled based on JICA materials.

After changes to the scope explained above, actual output was reduced by 2 units from the original plan because repair of 2 units were excluded from the project. If technical analysis of the situation had been thoroughly conducted at the first scope change, the second change was less likely required.

Project period

The project term was originally set at 51 months after the exchange of yen loan agreement, but it actually took 133 months until repair/improvement was completed and operation of 4 units got started (December 2005), much longer than planned (11 years and 1 month: 261% of the plan). 92 months (7 years and 8 months) have passed after the exchange of loan agreement until receiving approval from the government of Philippines (contract coming into effect), and 41 months (3 years and 5 months) from the contract entry to the completion of the project. Reasons for the delay are as explained below.

Reasons for the delay before contract becoming effective, after yen loan agreement

Lawsuit over Steam Supply Service Agreement

Steam Supply Service Company filed a lawsuit at a court of arbitration against NPC that owns Tiwi/Mak-ban Geothermal Power Plants 1 , complaining NPC rejected renewal of steam supply contract (25 years of contract. Expiration in 1996). NPC also brought the case to a domestic court. Steam Supply Service Company offered to drop charges on condition that Tiwi/Mak-ban Geothermal Power Plants was transferred to them and repair cost was burdened by them in exchange. In this situation, the government of Philippines decided to suspended implementation of the project because they needed time to review many things including whether or not to implement the project, at all. Considering the fact that negotiation of the project contract was completed in April 1999, the project could have been completed 3 years or more earlier if the government had not decided the suspension.

Privatization of power plant

As breakup and privatization of power sector was being promoted in the Philippines, the government spent considerable time reviewing which was more efficient to sell/privatize Tiwi Geothermal Power Plant via yen loan (repair/improvement by direct control of NPC) or privatization (repair/improvement by private company after purchase of the power plant). (Procedure for the project was interrupted 2 until September 2000 (69 months or 5 years and 9 months after the exchange of yen loan agreement), due to the lawsuit and the review of privatization) Facing such circumstances, NPC and former JBIC regularly discussed to advance procurement procedure.

Review for the scope change

While discussions over the aforementioned lawsuit and privatization delayed the project implementation, deterioration of power plant progressed and additional repair/improvement became necessary according to the degree of deterioration. It took additional time to review the scope change and to receive approval for that. The government of Philippines approved the scope change and exchanged the project contract in July 2002 (contract became effective).

Development from contract entering into force until the project completion

After the contract became effective, original scope of the project was once fixed in February 2004. However, field study conducted by NPC, the consultant and the contractor concluded that an additional repair was deemed necessary for stable operation of the power plant. Further, additional repair/improvement became necessary to achieve a certain level of power generation capacity and reliability under conditions of Geothermal Resource Sales ContractGRSC 3 . In response to this, additional contract was concluded in June 2004 and the repair work was completed in December 2005.

Status and effectiveness of operating power plant

In the original plan, repair/improvement of 6 units was expected to achieve 70% of capacity factor and volume of gross power generation at 2,024GWh/year. However, actual volume of power generation is barely half of the target, 1,172GWh (2006) and 890GWh (2007).

Operation status/initial plan (for all 6 units)Indicator (unit) Base

(1992)Target Actual

(2006)Actual(2007)

Total gross electricity generation (GWh) 1,998.5 2,024 1,171.6 890.07Total net electricity Generation (GWh) 1,877.4 1,888 1,081.0 825.8Total rated output (MW) 330 330 344 344Dependable capacity (MW) 284.6 231 153.3 112.6Unit average of capacity factor (%) 68.9 70 38.2 29.2Average availability factor (%) 81.7 - 56.2 43.9

Total operation time (hour) 43,085 - 29,564 23,073

Total forced outage (hour) 261.4 - 399.8 957.2

Total interruption time due to external factors (hour)

683 - 11,037 13,190

Source : Appraisal materials for base and target of capacity factor, calculated based on capacity factor and station userate for other targets. NPC for actual.

Operation status/initial plan (for 4 units subject to repair/improvement)Indicator (unit) Base

(1992)Target Actual

(2006)Actual(2007)

Totalgross electricity generation (GWh) 1,371.3 1,349 1,171.6 890.07Total net electricity generation (GWh) 1,289.9 1,259 1,081.0 825.8Total rated output (MW) 220 220 234 234Dependable capacity (MW) 199.7 154 153.3 112.6Unit average of capacity factor (%) 71.0 70 57.3 43.8Average availability factor (%) 79.3 - 84.4 65.8

Total operation time (hour) 27,853 - 29,564 23,073

Total forced outage (hour) 193.3 - 399.8 957.2

Total interruption time due to externalFactors (hour)

487 - 2,277 4,430

SourceAppraisal materials for base and target of capacity factor, calculated based on capacity factor and station use rate for other targets. NPC for actual.

In comparison, rated output of units 1, 2, 5 and 6 increased by 14MW from appraisal (1992) to after the project completion (2006), but actual output was decreased by 40-50% on average per unit. Main reasons for this are as follows:

Capacity factor is low and power generation capacity is maintained low. Main reason for this is difficulty in securing sufficient steam volume to operate the 4 units. Steam volume is decreasing by 8-10% a year.

Typhoon struck an area close to the power plant in November 2006, causing temporary shortage of output by the damage (however, based on utilization status of repaired facilities during out-of-typhoon season (before November 2006), output after the project completion is smaller than that during project planning, due to the lack of steam volume).

Trend of generation

Source : NPCNote: Red star and yellow star show the timing of appraisal and completion of the project, respectively. Repaired/improved units are 1, 2, 5 and 6. Uptick in output in 2004 was due to temporary operation of units after the first improvement and before the start of additional contract (operation was suspended due to repair work in 2005).

Trend of plant load (capacity factor) and availability factor offacilities (rehabilitated 4 units)

Main contribution to the decline in output is dwindling steam volume and substantial delay in the project implementation. By the time of the project completion, steam flow was simply not sufficient to fully operate the rehabilitated facilities.

On the other hand, deterioration of facilities became obvious since the second half of 1990’s, on top of accident caused suspension and dwindling steam flow. Plant load (capacity) factor and availability factor of facilities got as low as 20% for each, as shown in Figure-2 and 3. If the project had not been implemented, the rate could have reached almost zero in 2004 and thereafter. In consideration of this, the project has produced effects of increasing output in 2004 and in 2006 and thereafter, despite reduced steam volume.

Recalculation of Financial Internal Rate of Return FIRR

Increased from 9.2% at planning (appraisal) to 16.8% at evaluation. EIRR (Economic Internal Rate of Return) is difficult to be calculated and analyzed by comparison for evaluation, due to restriction on calculation measures applied for appraisal.

Increase in FIRR was mainly due to (i) increase of fuel cost and maintenance cost by 60%, increase of wholesale power cost to 2 times or more in contrast, and no increase in initial investment because the project scope was narrowed from 6 to 4 units, (ii) substantial delay in the project implementation worsened deterioration of facilities, which extremely widened the difference in outputs between With (with the project) and Without (without the project), for actual value than planned one (at planning, FIRR was based on assumption that capacity factor remains at 63% for Without, but in fact it plummeted to 20% by 2001. FIRR turns negative if the capacity factor remained at 63% for Without), (iii) regardless of substantial delay in starting procurement of materials/equipment and repair work, there was no cost incurred in the meantime, and (iv) repair work was completed as planned and succeeded in temporarily starting operation in 1.5 years of the first contract.

Assumptions of IRR

At planning At evaluation

FIRR cost Investment cost, fuel cost and operation maintenance cost (for rehabilitated portion)

Same as on the left. (Apply unit cost as of Nov. 2008 for fuel and maintenance costs in 2008 and thereafter)

FIRR benefit Income from electricity sales (increase after repair/ improvement) Output was calculated based on capacity factor of 63% for actual, 70% for post rehabilitation and 63% for Without. Assumed 2 units will be closed in 2011 and another 2 in 2012.

Same as on the left. Applied actual output after project implementation until 2007. Applied actual figures for 2008, capacity factor of units 1 and 2 was put at 63% (operate 6 months each in turn) and units 5 and 6 at 75% (full operation), and assumed reduction of output by 8% every year due to dwindling steam volume for 2009 and thereafter. For Without, applied actual until 2002 and assumed output got lower than the actual output of the preceding year by 8% since 2003. Assumed units 1 and 2 will be closed by 2015 for both With and Without.

Project life 19 years (15 years after rehabilitation) 15 years after rehabilitation

Impact Contribution to the stabilization of Luzon Grid, diversification of energy sources and use of domestic energy

Impact to the environment

Trend of Luzon Grid generation by power source

Compared to the planning stage, output of Tiwi Geothermal Power Plant has decreased as a whole as shown in Table-3 above. Positive impact of the output increase to Luzon Grid as a whole could not be confirmed. Generation share of the power plant to the whole Luzon Grid was 2.8% in 2006 and 2.0% in 2007, which is lower than 10.6% in 1992 when the project was planned. However, if the project had not been implemented, Tiwi Geothermal Power Plant is considered to have almost lost the power generating capacity. The project aimed at promoting an effective use of geothermal energy, which is highly valued as a renewable domestic energy. Since rated output of Tiwi Geothermal Power Plant makes up 30% of the total geothermal power generation at the Luzon Grid (based on rated output), the percentage of geothermal energy to the whole energy produced at the Luzon Grid could have been dramatically reduced without the project.

Economic impact

Geothermal power is an indigenous energy and had positive economic impact to lower fuel cost. Generation of 1kWh of electricity costs 6 times more in case of oil-fired power generation and 1.7 times more for gas-fired power generation in comparison to the cost of steam needed for geothermal power generation. The project was effective in cutting back fuel cost equivalent to 324 mil pesos (in case of gas-fired power generation) - 2.256 billion pesos (in case of oil-fired power generation).

Impact to the environment

At first, acquisition of Environment Compliance CertificateECC was considered

not necessary for the project, because it is a rehabilitation project to recover the function, not involving establishment of a new plant. However, ECC was actually issued in September 2002, and based on that, NPC has been implementing environmental monitoring during and after the project implementation. The result was compiled by NPC every quarter. Environment Control Bureau, local government, power plants, Steam Supply Service Company and NGOs also have started joint monitoring

activities. Environment around the power plant

At the project, equipment to dilute hydrogen sulfide gas was installed to mitigate the impact of the gas emission, as a measure to improve environmental condition. According to the monitoring results, the project satisfies the standard of the country, and so far, no specific problem has been pointed out in compiled reports. Temporary dwellings are sparsely located in areas around the power plant as shown in Picture above. No serious problem was reported after visiting and hearing from some residents.

Impact to social environment, land acquisition and relocation of residents

The project does not involve land acquisition or resettlement because it is a rehabilitation project of existing facilities. According to the provision on tax payment to the local government, 0.01 pesos are taxed per the sale of 1kWh electricity. The project contributed to increase earnings from electricity sales and tax revenue for the local government, resulting in improvement to the standard of living and introduction of social welfare programs for residents in the area.

Sustainability

Due to observed concern over the shortage in steam volume and the impact to the sustainability of the project, sustainability of this project is fair.

Implementing organization

Structural organization for operation and maintenance

Environment surrounding power sector in the Philippines had dramatically changed from the time of the project appraisal to today. The impact is making changes to the operation and maintenance of the power plant. More specifically, Electric Power Industry Reform ActEPIRA was enacted and entered into force in June 2001, and because of this, decision was made to split NPC, an implementing organization of the project, into a power generation company and a power transmission company, and privatize each (power generation asset is to be sold).

In response to the reorganization of power sector, bidding of both Tiwi and Mak-ban power plants took place at the end of July 2008, to sell their asset and privatize the two power plants together. AP Renewables (a company newly established to operate Tiwi/Mak-ban power plants), wholly owned subsidiary of Aboitiz Power Corporation APCsuccessfully won the bidding.

As of December 2008, operation and maintenance of the power plants were continuously undertaken by Tiwi Geothermal Power Plant Office under NPC, as pre-sellout transitional arrangement. Currently, 167 employees of NPC (2 supervisors, 65 operators, 63 maintenance staffs, 19 administration and finance division staffs and 18 engineers) are working at Tiwi Geothermal Power Plant (see Figure-5). Handover of the power plant to AP Renewables is planned to take place around May 2009, and operation, maintenance, control and management of the power plants will also be completely transferred from NPC to AP Renewables by then.

Technology for operation and maintenance

The power plant has accumulated experiences through 30 years of operation, and operation and maintenance are done based on their own knowhow and technology, without technical assistance from external parties.

According to the operation and maintenance plan of AP Renewables submitted in times of the bidding, the company basically maintains the current employees of Tiwi Geothermal Power Plant for the time being. Also abundant experiences of its parent company Aboitiz Power Corporation are expected to be reflected to the operation and maintenance of the power plant, accumulated by undertaking numerous projects of hydraulic power generation and power transmission projects in the country.

As stated above, there is no structural or technical problem with the current NPC structure. AP Renewables also has abundant power generation project experiences and since they intend to maintain the current employees of NPC, there is no specific concern in terms of technology/structure as of December 2008, in transitional phase.