Renewable Energy in the Philippines

Transcription

1 Renewable Energy in the Philippines Challenges in an Emerging Market Alan Silayan, IMRE 2002

2 Philippine Energy Sector

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4 Power Sector Situationer 2009 Transmission Text Interconnection Line Capacity! Leyte-Luzon (440 MW)! Leyte-Cebu (400 MW)! Cebu-Negros (200 MW)! Negros Panay (100 MW)! Leyte-Bohol (100 MW) *

5 Energy sector distribution! 32% Renewable Hydro Geothermal 32% Coal Wind/Solar 14% 17% 9% 0% 28% Oil Nat Gas

6 Geothermal resources have been explored since the 1970s and geothermal power make up about a quarter of the countryʼs energy mix Hydropower resources have been harnessed since the 1940s and today account for more than 20% of the energy mix

7 Geothermal 2nd Worldwide %&!'(&#)*+$5!)3*/4 5*3*5.'46$ 7)89 +!5*'.!/!"#$%&' ()*+, -&%./01/# &05 :;:<< * -&%./01/#!6.71'#8!&%7&%69&' +*: ;<= :*A -&%./01/# 5AA 3#08F#6.6'/ G#%%6HI#'8J&0#%,K+ 3#08F#6.6'/ E#DMN6$1M82'#%CD,5: OL#.6'/!6.2'#%CD8I#'#%69&',5A ;<= *+* P676'

8 Industrial Power Costs in Asia *+,+-.! /0121,,1-34! 51-6+,783! /+914:+-! ;+2+<41+! =01-+!

9 Philippine growth driven by non energy intensive service and commercial sector (!!"# +.//0'A'B22/-'!"#$%&'()%*'+,-'.//0'1'2' '!"# &!"# %!"# $!"#!"# ())*# ())'# ()))# $!!!# $!!(# $!!$# $!!+# $!!%# $!!,# $!!&# $!!*# $!!'# $!!)# -./ # :045## ;21</=9045##

10 Current Conditions Surrounding RE Project Development in the Philippines Large resource potential for RE Increasing demand for energy High electricity costs Legislative framework in place Limited fossil fuel resource Availability of environmental technologies from less expensive sources

11 Nature of RE Projects in the Philippines Relatively small - less than 1MW - 50MW Pioneered by entrepreneurs with little or no experience in RE Project development is learning by doing Expertise sporadic hydro/geothermal - strong Wind/biomass - weak Local technology missing

12 RE Policy

13 RA Renewable Energy Act of 2008 On-Grid Renewable Energy Development Renewable Portfolio Standards Feed-In Tariff System Renewable Energy Market Green Energy Option Net-metering for Renewable Energy Off-Grid Renewable Energy Development Minimum RE generation capacities

14 Market Barriers High upfront cost and technologies Non-viable markets Inaccessible Financial Packages Social Acceptability

15 High Upfront Cost and Technologies Viable RE Markets Income Tax Holiday and Low Income Tax Rate Duty-free Importation of Equipment and VATzero Rating Reduced Government Share Harmonization of Market Rules, in accordance with other Laws Oil Deregulation Law Electric Power Industry Reform Act

16 Accessible Financial Packages Preferential Financial Packages from Government Financial Institutions Available International Financing Programs Education of the Financial Sector Social Acceptability Information, Education and Communication Campaigns Capacity Building of Stakeholders, particularly the Local Government Units Social Mobilization to Strengthen Advocacy Programs Socio-Economic Development Programs for Host Communities

17 Market Barriers - Realities High upfront cost and technologies - Remain High USD2-3 Mill / MW Non-viable markets Inaccessible Financial Packages - Weak private commercial banking system / project financing Social Acceptability

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19 Projects Issued RE Service Contracts by DOE RE Project Type RE Project Type MW Max Allowable (MW) Hydropower Wind Geothermal 17 2,388 - Biomass (own-use) Biomass Ocean Thermal Energy Conversion 2 To be determined Ocean Solar 50 TOTAL 199 4,439.2

20 Proposed Feed-In Tariff Wind Solar Ocean Run-of-river Hydro Biomass

21 Project Concept GAP Financing for preproject development Project financing Local technology not available Lack of experience in RE projects Project Implementation

22 CDM - Global Context Decreasing Demand for CERs Uncertainty in Post-2012 agreement Transition from Seller to Buyer s market Increasing trend of market fragmentation

23 CER as a credit enhancement tool Incremental annual cash flow for the project Incremental IRR for the project PROJECT Incremental IRR Wind % Biomass 1-2 % Hydro 1-3 % Waste to Energy 3-5 %

24 CDM and RE in the Philippines Type of Project Number of Projects Registered CERs issued Biomass 5 0 Hyro 5 0 Geothermal 1 0 Wind