Posted on June 16, 2017
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. -- Victor V. Saulon
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. -- Victor V. Saulon
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