Philippines: Renewed high hopes for RE

Philippines: Renewed high hopes for RE

The Philippines attracted thousands of megawatts of renewable energy
projects shortly after the passage of the Renewable Energy Act of 2001 but
the concerns have been raised on the future of RE without the new feed-in
tariff rates.

Renewable energy currently accounts for 32.5 percent of the country's
installed capacity in 2016 amounting to 21,424 MW of which geothermal
contributed 8.9 percent, hydro at 16.9 percent and biomass, wind and solar
at 6.6 percent.

Energy Secretary Alfonso Cusi wants to increase the renewable energy
capacity level to 15,000 megawatts by 2040 from around 5,000 MW in 2010.

"We are poised to increase our RE capacity from its 2010 level of 5,000 MW
to 15,000 MW," he said, adding that the DOE will promote technology
innovation through research and development, demonstration and deployment.

Investments in new solar and wind projects, however, has slowed down
recently due to the absence of clear government policies on the Renewable
Portfolio Standards and the Green Energy Option in the absence of the
feed-in tariff.

As a result, developers have raised questions on the way forward for RE
development in the Philippines.

Danish wind turbine manufacturer Vestas said wind power development has come
to a near halt in the Philippines due to the lack of an operational wind
regulatory framework.

"Since the FiT2 (feed in tariff 2) came to an end, and until other policies
come into effect, there is no operational wind regulatory framework. As a
result, wind development has come to a near halt while conventional fossil
fuel generation continues to grow significantly," Clive Turton, Vestas Asia
Pacific president said.

Vestas is servicing 183 megawatts of wind projects in the country, including
the 150 MW Burgos wind power plant in Ilocos Norte, one of the largest wind
energy project in South East Asia.

The feed-in tariff is a policy mechanism that promotes the rapid deployment
of renewable energy by offering developers a guaranteed rate for the
electricity they produce.

FITs have been the main drivers of renewable energy additional capacity in
the Philippines to date. The FIT guaranteed a rate of P8.53 and P9.68 for
every kWh produced by a qualified wind and solar project, respectively.

The FIT was later revised downwards for the second round to P7.40 per kWh
for wind and P8.69 per kWh for solar to reflect technology improvements and
cost reductions.

"A wind energy pipeline of several hundreds of megawatts stands to be
unlocked with clear policy in place. Vestas is committed to help write the
next chapter of wind energy deployment in The Philippines, and work with all
government and private sector partners to that effect!" the Vestas official
said.

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

"With thermal power, and particularly coal projects moving forward while RE
developments are at a near standstill, the country's growing electricity
needs will be fulfilled thanks to an increasing share of coal, at the
expense of RE - at least in the near-term," Vestas said.

"Indeed, wind and solar projects are virtually all halted. This is mainly
due to the current RE policy vacuum, which follows the full allocation of
the first two rounds of FiTs, and the freeze, of an expected third round of
FiTs," the company said.

Cusi has announced that he is not supportive of a third round of feed-in
tariff for solar and wind projects as it will push up power rates.

The DOE has also not acted on the pleas of some solar developers who failed
to get a feed-in tariff despite completing their solar projects in time for
the March 15, 2016 government-imposed deadline.

These solar developers are now looking at shutting down their operations and
some are selling out due to the very low rates at the Wholesale Electricity
Spot Market, the country's trading floor of electricity.

"With no other RE policy mechanism operationally in place, The Philippines
is effectively putting to a halt an otherwise flourishing local industry,"
Vestas said.

Vestas also expressed support to the renewable energy portfolio standards or
RPS and any other policy tool, which aims to drive renewable energy
development.

RPS is a policy instrument which aims to drive renewable energy development
by mandating load-serving entities (such as distribution utilities), to
procure a minimum percentage of electricity from renewable energy sources.

"However, RE Industry stakeholders express concern about the current RE
policy gap (no new FIT, no defined new procurement mechanism, and RPS yet to
be implemented), which is delaying new RE installations to the benefit of
conventional fossil fuel generation - particularly coal," Vestas said.

National Renewable Energy Board chairman Jay Layug said, however, expressed
optimism and high hopes on renewable energy development in the country
inspite of the ongoing challenges.

"By sheer geographic location, we Filipinos are all impelled by a shared
desire to grow the country's renewable energy sector. We do not have massive
production and of conventional energy resources to fuel our economy. By
default therefore and following all legislative mandate, we should continue
to pursue the acceleration of renewable energy sources development in the
Philippines," Layug said.

"But we should think of RE not just as a means to increase our energy
capacities. More importantly, we should think of RE to serve legitimate ends
of development especially in our rural communities," he said.

Layug said the National Renewable Energy Program as it stands represents the
government's unbending resolve to carve out a clear roadmap towards
utilising emerging technologies in the renewable energy field.

"The NREP is our guidepost toward ensuring that while we strive to sustain
industrial growth and create better lives for the Filipinos, we are likewise
putting in place climate protection policies, securing energy supply for an
endless time and sustaining economic development for decades to come. We all
have to support renewable energy development and fulfil the spirit and
intent of the RE law. In doing so, we also have to fulfil our obligation to
provide renewable energy to our people in ways that would ensure fair and
electricity pricing for all," Layug said.

Senator Sherwin Gatchalian, however, urged the department to come out with a
written policy on the feed-in tariff so as not to confuse investors.

"We really need to have a department order in writing for the industry,"
Gatchalian said.

--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---

Link to Original Article:
http://thestandard.com.ph/supplements/mixed-energy-special-report/240251/ren
ewed-high-hopes-for-re.html

--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---

John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com