| Abstract |
This study aims to determine the tariff thresholds required in the Philippines to ensure that a geothermal power project is financially viable. Through geothermal de-risking, the revised omnibus guidelines governing the award and administration of renewable energy contracts, and the Green Energy Auction Program (GEAP), the Philippine government provides opportunities to investors to further accelerate the geothermal development. However, the high upfront capital cost and resource development risks call for careful financial planning to attract investment. Using financial indicators such as the Internal Rate of Return (IRR) and Levelized Cost of Energy (LCOE), the study estimates project cash flows under various tariff scenarios. The model determines the minimum tariff needed to achieve a target IRR, typically in the range of 12% to 15%. Sensitivity analysis evaluates how project economics respond to changes in capital costs, interest rates, and fiscal incentives. The findings aim to assist policymakers and investors in designing commercially sound geothermal projects that contribute to national energy objectives. |