Biomass Industry in the Philippines

Biomass Industry in the Philippines

This article will attempt to describe the economic advantages and
environmental efficiencies of biomass power generation in the Philippines.
The biomass industry in the Philippines, while still far behind fossil
fuel-based power generation, is rapidly advancing. The term biomass
normally refers to biological material that can be used as fuel. It can be
something as simple as a wooden log or more complex like alcohol. Biomass
for millennia has been the primary energy source on the planet. Although it
is considered that all fossil fuels such as coal and oil originate from
vegetation, they are excluded from the definition of biomass.

Sources of Biomass in the Philippines

The Philippines has large and abundant supplies of biomass resources,
including agricultural crop residues, forest residues, animal waste,
agro-industrial waste, municipal solid waste and aquatic biomass. The most
common agricultural waste are rice hull, bagasse, coconut shell husk and
coconut coir. This use of commercially produced agricultural residues
converted into biofuels is increasing in the Philippines, as fossil fuel
prices continue to rise. Rice husks are perhaps the most important
underdeveloped biomass resource that can be fully utilized in a renewable
and sustainable manner for generation of electrical power.

Currently, biomass technologies used in the Philippines include the use of
bagasse as boiler fuel for cogeneration; rice and coconut husks dryers for
crop drying; biomass gasifiers for mechanical and electrical applications;
fuelwood and agricultural wastes for oven kilns; and furnaces and cooking
stoves for cooking and heating purposes. Biomass technology represents the
largest installations in the Philippines in comparison with the other
renewable energy or energy-efficient and greenhouse gas abating
technologies.

Biomass energy has, and continues to play a vital role in the Philippines'
energy supply. Nearly 30 percent of the energy for the 100 million plus
people living in the Philippines comes from biomass, and is mainly used for
household cooking by the rural population. Biomass energy sources, account
for approximately 15 percent of the primary energy use in the Philippines.
These resources that are available in the Philippines can generate biomass
power projects with a potential capacity of more than 200 MW. It is
estimated that about 70 percent of this biomass use can be traced to the
cooking needs of the residential sector, as compared to the industrial and
commercial applications that account for the remainder.

It has been estimated that the volume of residues in the Philippines, from
rice, coconut, palm oil, sugar and wood industries is 16 million tons per
year. Bagasse, coconut husks and shell can account for at least 12 percent
of total national energy supply. The World Bank-Energy Sector Management
Assistance Program estimated that residues from sugar, rice and coconut
could produce 90 MW, 40 MW, and 20 MW, respectively.

The development of agricultural residual recovery systems, the improvement
of agro-forestry systems, the introduction of the latest energy conversion
technologies, and development of biomass supply chains, will play a major
role in biomass energy development in the Philippines. The country is also
amongst the nations most vulnerable to climatic change, and has experienced
some of the largest crop losses due to climate change. The country has
demonstrated a strong self-interest in the advancement of clean energy
technologies, and has the potential to become a role model for other
developing nations on account of its broad portfolio of biomass energy
resources.

Agriculture in the Philippines

The Philippines is primarily a country that relies on agricultural produce.
It has a land area of 30 million hectares, 47 percent of which is
agricultural. The total area devoted to agricultural crops is 13 million
hectares distributed amongst food grains, food crops and non-food crops.
The crops grown in the Philippines include rice, coconut, bananas, pineapple
and sugarcane, and these are the major contributors to biomass energy
resources. The majority of agricultural waste in the Philippines is mainly
made up of rice husk, rice straw, coconut husk, coconut shell, banana,
pineapple and general bagasse. The country has a very good potential for
biomass power plants, as approximately one half of the country's
agricultural land produce includes rice, coconut and other tropical fruit
products. Consequently large volumes of rice straw, husks and the waste of
tropical fruit produce are generated.

Rice is the staple diet in the Philippines. Filipinos are amongst the
world's biggest rice consumers. The average Filipino consumes about 100
kilograms of rice per year. Though rice is produced throughout the country,
Central Luzon and Cagayan Valley are the major rice growing regions, with
more than 1.2 million hectares of rice producing areas. The country
produced about 16 million tons of rice in 2015. This rice production gives
an estimated production of rice husks of more than 2 million tons per annum.
This is the equivalent of approximately 5 million barrels of oil in terms of
energy. Rice straw is another important biomass resource with a potential
production of about 5 million tons per annum.

In 2006, the Philippines government passed the Biofuels Act. This was aimed
at the sugar industry in the Philippines, which is the major source of
ethanol and domestic sugar, and a major agricultural industry. About 380,000
hectares of land is devoted to sugarcane cultivation, and it is estimated
that 1.17m tons of sugarcane waste is recoverable as a biomass resource in
the Philippines. In addition, 6.4m tons of surplus bagasse is available
from local sugar mills. There are 29 operating sugar mills in the country
with an average capacity of 6,900 tons of sugarcane waste per day. The
majority of these mills are located in Negros Province, which supplies about
46 percent of the country's annual sugar production.

The Philippines has the largest number of coconut trees globally, and
produces the majority of coconut oil and copra meal globally. The majority
of coconut waste includes coconut shell, coconut husks and coconut coir
dust. Coconut shell is the most widely utilized however the reported
utilization rate is very low. Approximately 500 million coconut trees in
the Philippines produce very large amounts of biomass as husk, estimated at
6m tons annually.

Maize is also a major agricultural crop in the Philippines, and produces a
large amount of agricultural waste. It is estimated that 4m tons of grain
maize and 1m tons of maize cobs are grown annually in the Philippines.
Maize cob burning is the main energy application of the crop, and is widely
practiced by small farmers to supplement fuelwood for cooking.

The development and optimal use of the country's renewable energy resources
is central to the Philippine's sustainable energy agenda. Renewable energy
is an essential part of the country's low emissions development strategy,
and is vital to addressing the challenges of climate change, energy
security, and access to energy in the Philippines.

Philippines Department of Energy - National Renewable Energy Programme
(NREP)

The National Renewable Energy Program (NREP) outlines the policy framework
enshrined in Republic Act 9513. It sets the strategic building blocks that
will help the country achieve the goals set forth in the Renewable Energy
Act of 2008. The NREP signals the country's big leap from fragmented and
halting renewable energy initiatives into a focused and sustained drive
towards energy security and improved access to clean energy. The NREP sets
out indicative interim targets for the delivery of renewable energy within
the timeframe of 2011 to 2030. Meeting the large targets up to 2020 will be
challenging as detailed planning, financing, and building of renewable
energy infrastructure will have to be undertaken at a scale, and within a
time frame, never done before.

The NREP lays down the foundation for developing the country's renewable
energy resources, stimulating investments in the renewable energy sector,
developing technologies, and providing the impetus for national and local
renewable energy planning that will help identify the most feasible and
least-cost renewable energy development options. The NREP proceeds from the
assumption that certain activities can be taken right away, while others
will take time to implement. As a national program, it will require
periodic review to ensure it conforms to the policy objectives set out in RA
9513.

Beyond the scale, however, are fundamental issues of transmission and grid
integration for intermittent renewable energy resources. Social and
economic impacts cannot be overlooked. These are issues that will be kept
under close review, and action will be taken toward meeting the challenges
of balancing the country's energy security needs and the overriding goal of
providing clean, affordable, and sustainable energy for all.

The NREP promises a continuing and well-coordinated effort to drive
development in the renewable energy industry, promote technology
advancements, and achieve economies of scale. It provides the basis for
national and local renewable energy planning that will identify specific
actions and times upon which outcomes will be generated. Such plans will
factor in cross-cutting issues and essential interventions in the areas of
transmission development and integration, energy efficiency, off-grid
electrification, climate change, technology transfer and development, local
capacity building, and partnerships.

Given the dynamic nature of the country's energy sector, the NREP is an
active document. Forecasts and targets will be updated periodically as key
developments in the energy sector emerge. Programs will be reviewed, and
deployment of renewable energy projects will be monitored to ensure that
stakeholders make good on their promise to deliver. Above all, partnerships
will be enhanced to ensure a country-wide approach in developing the
country's renewable energy resources.

Investments in Philippine Biomass Industry

Rice farmers and millers have started to warm up to biomass power. A
consortium of rice millers, Isabela Biomass Energy Corp. (IBEC), is building
a 20-MW rice-husk-fired power plant in Alicia, Isabela. IBEC has tapped
local bank Banco de Oro for a credit line of P1.8 billion to help finance
the power project and its link to the national grid. Biomass power
generation can rejuvenate agri-focused businesses as well. Victorias
Milling Co. Inc. is energizing its way to financial health with a P1.1
billion 40MW biomass power project. It is set to put up a cogeneration
facility using bagasse (leftover sugarcane fiber or sapal) at the VMC
agro-industrial complex in Victorias City, Negros Occidental province.

VMC's usage of 3.1m to 3.3m tons of sugarcane is seen to provide enough raw
materials for the facility. When the biomass power station starts
transmitting power to the Visayas grid, VMC will be able to collect on the
feed-in-tariff (FIT) incentive. VMC has formed a subsidiary, Victorias Green
Energy Corp. (VGEC) to undertake its power related projects. One of the
biggest suppliers of refined sugar in the Philippines, VMC supplies about 30
percent of the country's daily need for refined sugar. It sources its raw
materials from district and non-district planters as well as through cane
and raw sugar purchases.

The International Finance Corp. (IFC), with support from the Government of
Canada and Clean Technology Fund, announced in August 2016, a US$161 million
investment in three Biomass power plants in Negros Occidental. It was also
announced recently that Bronzeoak Philippines, owned by the sugarcane
farming Zabaleta family will develop these three projects in Negros
Occidental to support the country's clean renewable energy initiatives. IFC
will be joined by the Canadian government and the Clean Technology Fund in
funding the specified renewable energy projects being developed by the
Zabaleta-based Bronzeoak Philippines in the towns of Manapla, San Carlos and
La Carlota in the Visayas grid. IFC has stated that the project is expected
to generate 70MW of clean renewable energy for the country. Bronzeoak
subsidiary South Negros BioPower developed, in partnership with ThomasLloyd
and funded by Cleantech Infrastructure Fund, a 25MW Biomass Power Plant that
would deliver about 175MW of electricity per year.

Amongst the foreign investors who have also started to take notice of the
Philippines' potential for biomass power, is the British company MacKay
Green Energy (MGE). MGE is discussing the investment of US$100 million in a
biomass power plant and plantation for feedstock in Mindanao. The Company
Chairman James R. Mackay has said that MGE would construct three Biomass
power stations with a capacity of 32 MW. The Aboitiz Group is also into
biomass, with its 9MW biomass plant in Batangas, under Aboitiz Renewables
nearing completion. Biomass power is also being considered for the transport
industry. Aboitiz's company AseaGas Corp 9MW Lian Biomass power plant in
Batangas is keen on exporting power to the Luzon grid and is considering
prospects in powering modern commercial trucks with gas. Oil firm Eastern
Petroleum Group is also diversifying into biomass power and has been seeking
funding for a P4 billion biomass plant.

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Link to Original Article:
http://www.aseanbriefing.com/news/2017/05/19/biomass-industry-philippines.ht
ml

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com