Philippines: Power projects weighted towards fossil fuels, wind-power firm says

Philippines: Power projects weighted towards fossil fuels, wind-power firm
says

THE Philippine renewable energy sector is facing an "uncertain future" as
committed projects that will come online in the coming years are largely
fossil fuel based, Danish wind turbine maker Vestas Wind Systems A/S said.

Clive Turton, Vestas president for Asia-Pacific, said "we are concerned
about the near-term outlook for wind in the country. Since the FiT2 came to
an end, and until other policies come into effect, there is no operational
wind regulatory framework."

He was referring to the second round of the feed-in-tariff (FiT), the
government's scheme that offered a guaranteed and higher rate to encourage
the development of renewable energy (RE) in the country.

"As a result, wind development has come to a near halt while conventional
fuel generation continues to grow significantly," he said.

Vestas' view was sent by the Embassy of Denmark in Manila, which described
the Danish company as having a strong presence in the Philippines. The
company has delivered and is servicing 183-megawatts (MW) worth of projects
in the country, including the Burgos wind power plant in Ilocos Norte.

Mr. Turton, in the briefing note, said the Philippines has some of the most
abundant wind resources in Southeast Asia. He said "modern wind energy
technology is able to generate more power, at a lower cost than ever
before."

"This creates a real opportunity for the country to meet part of its growing
electricity needs using competitive, independent, and clean wind energy," he
added.

He added that wind energy creates local skilled jobs. Vestas, for instance,
employs more than 400 people in the country where its two units are located.


Vestas said thermal power generation installations are expected to grow
faster than RE installation. It said over the past years, the country has
been working to diversify its generation mix and grow RE.

But it said a look at the Department of Energy's (DoE) list of committed
projects "informs that the capacity which will come online over the coming
years will largely be fossil fuel based."

Vestas said 87% of all committed capacity will come from fossil fuels,
specifically 74% coal, 12% natural gas and 1% oil. It said of the 5.3
gigawatts of new committed installations, only about 13% or 671-MW are RE
such as geothermal, hydro, biomass, wind and solar. RE currently has a share
of 24% of all power generated in the country. It also has a 32% share of the
country's total 21,424 MW installed power capacity.

Under previous administrations, the Philippines had passed legislation that
aims to push the use of renewable energy. The 2008 Renewable Energy Act
created the framework that provides a set of incentives, including the
feed-in-tariff, the renewable portfolio standard (RPS) and a market for
trading renewable energy certificates to attract investors.

RPS, which requires distribution utilities to buy a portion of their
requirement from RE, is awaiting endorsement to the Energy department.

Vestas said: "RPS is at draft stage. Draft RPS rules suggest that the share
of RE would have to reach 35% of the generation mix by 2030."

"Implementing a RPS, and potentially a new RE procurement policy, will take
time. It could easily be another two years until the RPS is fully
operational and starts delivering on its promise to stimulate RE
development. In the meantime, thermal power generation continues to distance
the country from its Low-Carbon and RE targets," it said.

"In this context, the future RPS will need to reflect this reality and align
its targets and assumptions to compensate for the delay being taken now,
unless policy makers put in place immediate transition policy measures to
allow RE development to continue," it added.

It said the transition measures are needed until the RPS and post-FiT
mechanism are fully in place.

Andresito F. Ulgado, DoE's division chief at the renewable energy management
bureau, said the National Renewable Energy Board, the panel that advises the
department on the country's RE direction, had scheduled one more meeting
before finalizing the RPS rules.

"By June, it will be endorsed [to the DoE]," he said.

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Link to Original Article:
http://www.bworldonline.com/content.php?section=Economy&title=power-projects
-weighted-towards-fossil-fuels-wind-power-firm-says&id=146834

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com