by Dennis Posadas
The recently held GTZ symposium on renewable energy held last October 8 at the Fully Booked in Bonifacio High Street was an interesting example of how investors and the public are now interacting with our new Renewable Energy Act. The passage of the 2008 Renewable Energy Act of the Philippines has paved the way for an increase in investments in the renewable energy sector. One of the areas that have benefited is the wind energy sector. It is estimated that the Philippines theoretically has around 76,000 MW in wind energy capacity, based on studies conducted by the U.S. National Renewable Energy Laboratory (NREL) and the Philippines Department of Energy.
It was reported in the Inquirer.net that the Department of Energy last September awarded three companies four new wind energy service contracts—Energy Development Corp. (PSE: EDC) for its planned 86-MW wind farm in Burgos, Ilocos Norte; UPC Asia Corp. for its 50-MW wind project in Pagudpud, Ilocos Norte; and PetroEnergy Resources Corp., which bagged two contracts for a 30-MW project in Sual, Pangasinan and a 30-MW project in Nabas, Aklan. Also, Energy Logics Philippines Inc.’s pre-commercial contract for a 120-MW wind farm in Pasuquin, Ilocos Norte, was converted to a wind energy service contract.
Several joint ventures between local businessmen and foreign companies and investors have also been announced in the local dailies, among those that have been reported include the Alterenergy Partners joint venture with Eurus Energy Japan and Korea East West Power Co. to identify projects in the 30 to 40 MW range; and the French wind turbine manufacturer Vergnet Group, said to be looking for joint venture partners.
The rule of thumb given is that each megawatt of capacity costs around USD $2m to 2.5m dollars. At present, aside from small isolated micro-wind installations in remote communities, the largest one at present is the 33MW wind farm in Bangui Bay, Ilocos Norte run by the Northwind Power Corporation, which contributes only 0.21% of the total electricity generated in the country, that is when the wind is blowing.
The 7,100 islands of the Philippines make it difficult to make electricity available in many areas, particularly those that are isolated from the main electric grid. Most large islands with large populations, such as Luzon, Panay, Cebu, Mindanao, and others have their own generation, distribution and utility companies to service their areas.
However, smaller islands with sparse populations or mountainous areas are a particular challenge. In these cases, sometimes the only practical solution is to use renewable energy power sources (e.g. wind, solar, biomass) or diesel powered generators.
Because wind, like solar, is an intermittent energy source, there has to be a means of storage to compensate for times when it is not generating power. In isolated off-grid areas, for smaller wind systems, this normally means a battery. In countries like the U.S., in the Texas Panhandle for example, T. Boone Pickens’s backup of choice is a natural gas turbine. But for the Philippine setting, the typical approach much like in most countries is to simply connect these large wind systems to the electric grid, and to simply sell power to the grid when it is generating. Anyway, just like in the U.S., the Philippines operates a spot market for electricity. In the case of renewable energy, a special spot market for renewable energy has been developed by the Philippine government to guarantee that there will be buyers for producers of renewable energy electricity.
One concern of some investors is the limit on foreign ownership. It is defined in the Philippine constitution that in certain key industries/sectors, foreign ownership is to be a minority, with a slight majority going to a Philippine partner. For some investors, it is not an issue, but for some it is. As former Energy Secretary and now Alterenergy Partners CEO Vince Perez mentioned during the GTZ symposium, at the moment the only choice is to look for a trusted Philippine partner to work with.
Another concern is in the way the public may perceive the Feed-in-Tariff, which is a key subsidy mechanism to attract investors to invest in renewable energy in the Philippines. During the Ramos administration, the government suddenly had to build power plants to meet a large capacity shortfall, and to do this, they had to entice investors with a ‘take or pay’ scheme meaning that even if the power was not being used, electricity utilities and therefore consumers had to shoulder part, if not all, of the cost of the unused generated power. There was such a big public outcry, especially in this country where the ‘cheapest power possible’ mentality rules, that it will sometimes if not always be difficult to pass measures that subsidize for example, renewable energy. Just like the personal computer and the semiconductor industry, renewable energy requires a steady market in order for private sector technologists to be attracted to constantly improve it. Unfortunately, the appetite for renewable energy seems to be correlated with the price of oil. If oil is cheap, the appetite for renewable energy disappears and vice versa. The Feed-in-Tariff hopes to counteract this tendency.
Personally, most people would like to see renewable energy succeed in the Philippines. The severe flooding brought about by typhoon Ondoy has brought home more awareness of the need for low carbon energy sources. Supporters of renewable energy hope that electricity consumers will actually step up to the plate and pay a little extra for renewable energy through the feed-in-tariff, in order to increase the returns for the companies and investors that go into this sector, already saddled by high upfront capital expense costs for wind (currently $2.5m per MW) and solar (currently $2/watt for silicon based photovoltaics and $1/watt for less efficient thin film based photovoltaics) and the threat of cheap oil. Besides, electricity consumers in the Philippines already pay a foreign currency adjustment charge for imported oil used in power generation. There is no reason why they should not accept a feed-in-tariff adder, given that they will no longer need to pay the foreign currency charge for that portion of the electricity bill.
Otherwise if consumers do not agree to pay the piper, then coal, the current king of the hill in terms of price, will really become entrenched as the power source of choice.
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Dennis Posadas is the editor of Cleantech Asia Online, and the author of Jump Start: A Technopreneurship Fable (Singapore: Pearson Prentice Hall, 2009). He is is currently working on a new business fable on climate change and clean energy.
Showing posts with label renewable energy. Show all posts
Showing posts with label renewable energy. Show all posts
Saturday, October 24, 2009
Thursday, September 10, 2009
Invest in clean energy, Napocor urges firms
By Amy R. Remo
Philippine Daily Inquirer
STATE-RUN NATIONAL POWER CORP. SEEKS investments in renewable energy for its island and off-grid operations, in a bid to reduce costly government subsidies to its Small Power Utilities Group operations.
SPUG, Napocor’s missionary electrification arm, currently provides power to remote islands and barangays not connected to the main grids, and the subsidy to these areas runs up to about P6 billion a year.
“The subsidy of government becomes less because we will now just have to provide the gap between the regulated rate of electricity and the actual generating cost of the private sector, as opposed to coming in there on our own and covering the entire cost. That is where the value of the partnership comes in,” said Napocor president Froilan A. Tampinco.
He cautioned, however, that relying on renewable energy alone could be expensive.
“The trick is to come up with hybrid systems. This is a combination of renewable and conventional energy,” Tampinco said.
Another incentive for investors, Tampinco noted, was the pending tourism bill, which aims to promote tourism in areas where SPUG operates.
“That [bill] is going to be another incentive for investors in terms of the improved economic activity of the people, the prospects for the market and better returns,” Tampinco said.
“I am very confident and bullish about how things are moving right now. Our concentrated efforts on these island and off-grid operations, the supportive legislative piece in the form of the New Renewable Energy Law and the coming Tourism Bill will allow us to have a positive impact on these communities that need priming up to improve their livelihood,” he added.
Philippine Daily Inquirer
STATE-RUN NATIONAL POWER CORP. SEEKS investments in renewable energy for its island and off-grid operations, in a bid to reduce costly government subsidies to its Small Power Utilities Group operations.
SPUG, Napocor’s missionary electrification arm, currently provides power to remote islands and barangays not connected to the main grids, and the subsidy to these areas runs up to about P6 billion a year.
“The subsidy of government becomes less because we will now just have to provide the gap between the regulated rate of electricity and the actual generating cost of the private sector, as opposed to coming in there on our own and covering the entire cost. That is where the value of the partnership comes in,” said Napocor president Froilan A. Tampinco.
He cautioned, however, that relying on renewable energy alone could be expensive.
“The trick is to come up with hybrid systems. This is a combination of renewable and conventional energy,” Tampinco said.
Another incentive for investors, Tampinco noted, was the pending tourism bill, which aims to promote tourism in areas where SPUG operates.
“That [bill] is going to be another incentive for investors in terms of the improved economic activity of the people, the prospects for the market and better returns,” Tampinco said.
“I am very confident and bullish about how things are moving right now. Our concentrated efforts on these island and off-grid operations, the supportive legislative piece in the form of the New Renewable Energy Law and the coming Tourism Bill will allow us to have a positive impact on these communities that need priming up to improve their livelihood,” he added.
Wednesday, September 9, 2009
Green and Bare It
Philippine Daily Inquirer
GOING green doesn’t mean being in the red. More and more companies involved in manufacturing, energy, retail and construction are now embracing environmentally safe and energy-saving practices that also reduce their production and operational costs.
In a recently released international survey, the business sector in the Philippines emerged as the most perceptibly environment-friendly sector.
According to the 2009 Grant Thornton International Business Report, the business sector in the country got a score of +78 percent which, observers said, was a result of efforts among several firms to actively pursue projects that promote cleaner and greener surroundings.
The Philippines, thus, makes for a rightful venue for the first International Conference on Green Industry in Asia on September 9 to 11, at the Philippine International Convention Center. This is organized by the United Nations Industrial Development Organization, the United Nations Environment Programme (Unep) and the United Nations Economic and Social Commission for Asia and the Pacific (Escap) and hosted by the Philippines through the Department of Environment and Natural Resources (DENR).
In this meeting, delegations from 25 Asia Pacific countries, headed by environment and trade ministers, as well as senior officials, are expected to come up with a Manila declaration to encourage industries and businesses to adopt eco-friendly systems.
DENR Secretary Joselito Atienza Jr. is optimistic that the event will serve as an opportunity for the Philippines to highlight its potential toward green growth. “Climate change is one of the biggest problems we face today. The shift to a low carbon economy will change how industries operate, the products we use and our lifestyles. Business and consumers can benefit from significant savings and resource efficiency measures,” Atienza said.
“We are pursuing the shift to renewable energy. We also have ample water supply. We have considerable geothermal resources and our wind condition is suitable for windmills. In fact, we are the only country in Southeast Asia with windmills that earn carbon credits. Indeed, we are blessed that we have the natural resources to do these and be able to show our neighboring countries such potential is a very worthy accomplishment,” he added.
The following is an initial list of companies with notable green initiatives, as compiled by the DENR Environmental Management Bureau.
1. Nestlé Philippines, Inc.
The company optimizes the use of water in its operations and eliminates unnecessary consumption. These efforts have cut down Nestlé’s water consumption by 16.76 percent since 1997 or an average of 65,600 cubic meters of water every year. One of the green measures that Nestlé has employed is the reuse of water for various parts of its operation particularly in its Lipa and Cabuyao factories. Water used for sealing, cooling and even treated waste water is collected, pumped and recirculated for irrigation of plants and grass as well as other uses instead of being discharged as waste.
2. Coca-Cola Bottlers Plant, Tacloban (CCBPI)
CCBPI is implementing a program to phase out refrigerants with ozone-depleting substances through the purchase of refrigerators, coolers, fountains and vending equipment that use environment-friendly refrigerants. The program also includes energy-efficient initiatives such as use of natural light (skylight) in its warehouses. The plant has also switched or retrofitted its boiler from using bunker fuel to Low Sulfur Fuel Oil (LSFO).
3. Hideco Sugar Milling Company, Leyte
Hideco uses bagasse, a by-product derived from sugar cane, as fuel for its boilers to generate steam. The steam generated is then used to drive turbines of cane milling plant equipment and also turbo-generators to produce electricity for the sugar processing plant. •
GOING green doesn’t mean being in the red. More and more companies involved in manufacturing, energy, retail and construction are now embracing environmentally safe and energy-saving practices that also reduce their production and operational costs.
In a recently released international survey, the business sector in the Philippines emerged as the most perceptibly environment-friendly sector.
According to the 2009 Grant Thornton International Business Report, the business sector in the country got a score of +78 percent which, observers said, was a result of efforts among several firms to actively pursue projects that promote cleaner and greener surroundings.
The Philippines, thus, makes for a rightful venue for the first International Conference on Green Industry in Asia on September 9 to 11, at the Philippine International Convention Center. This is organized by the United Nations Industrial Development Organization, the United Nations Environment Programme (Unep) and the United Nations Economic and Social Commission for Asia and the Pacific (Escap) and hosted by the Philippines through the Department of Environment and Natural Resources (DENR).
In this meeting, delegations from 25 Asia Pacific countries, headed by environment and trade ministers, as well as senior officials, are expected to come up with a Manila declaration to encourage industries and businesses to adopt eco-friendly systems.
DENR Secretary Joselito Atienza Jr. is optimistic that the event will serve as an opportunity for the Philippines to highlight its potential toward green growth. “Climate change is one of the biggest problems we face today. The shift to a low carbon economy will change how industries operate, the products we use and our lifestyles. Business and consumers can benefit from significant savings and resource efficiency measures,” Atienza said.
“We are pursuing the shift to renewable energy. We also have ample water supply. We have considerable geothermal resources and our wind condition is suitable for windmills. In fact, we are the only country in Southeast Asia with windmills that earn carbon credits. Indeed, we are blessed that we have the natural resources to do these and be able to show our neighboring countries such potential is a very worthy accomplishment,” he added.
The following is an initial list of companies with notable green initiatives, as compiled by the DENR Environmental Management Bureau.
1. Nestlé Philippines, Inc.
The company optimizes the use of water in its operations and eliminates unnecessary consumption. These efforts have cut down Nestlé’s water consumption by 16.76 percent since 1997 or an average of 65,600 cubic meters of water every year. One of the green measures that Nestlé has employed is the reuse of water for various parts of its operation particularly in its Lipa and Cabuyao factories. Water used for sealing, cooling and even treated waste water is collected, pumped and recirculated for irrigation of plants and grass as well as other uses instead of being discharged as waste.
2. Coca-Cola Bottlers Plant, Tacloban (CCBPI)
CCBPI is implementing a program to phase out refrigerants with ozone-depleting substances through the purchase of refrigerators, coolers, fountains and vending equipment that use environment-friendly refrigerants. The program also includes energy-efficient initiatives such as use of natural light (skylight) in its warehouses. The plant has also switched or retrofitted its boiler from using bunker fuel to Low Sulfur Fuel Oil (LSFO).
3. Hideco Sugar Milling Company, Leyte
Hideco uses bagasse, a by-product derived from sugar cane, as fuel for its boilers to generate steam. The steam generated is then used to drive turbines of cane milling plant equipment and also turbo-generators to produce electricity for the sugar processing plant. •
Friday, July 17, 2009
Climate change seen to threaten economies
By Amy R. Remo
Philippine Daily Inquirer
MANILA, Philippines—Governments worldwide will have to face head on the issue of climate change and its adverse effects, otherwise all their efforts toward development will go to waste.
“Climate change will roll back decades of hard won development gains,” unless goverments do something about it, said Antonio Hill, Oxfam senior climate change policy advisor, during the closing ceremonies of the 4th Asian Clean Energy Forum.
The reduction of gas emissions and significant increase in investments in clean technology are but some of the urgent measures being considered in the agenda to counter the effects of climate change.
Hill noted that emission reduction and large-scale financing had consistently cropped up during discussions this week and would be central to the deal in Copenhagen.
Oxfam estimated that the number of people affected by climate-related disasters would likely increase by a hefty 50 percent in six years’ time. In other words more than 375 million people will be affected by 2015.
Oxfam has turned its sights on climate change and its effects on poor communities, Hill said.
It has added its voice to the concerted effort to organize developing countries for treaty negotiations in Copenhagen, Denmark to hammer out a new climate change agreement in December.
On the same note, Asian Development Bank vice president for finance and administration Bindu Lohani said critical to mitigating climate change is large-scale financing, equality and technology transfer.
Lohani said that by 2030, countries would need as much as $22 trillion for energy investments and, of this amount, $7 trillion would be needed in Asia.
To meet renewable energy targets, some $6 trillion should be secured by Asian countries.
“We need to mobilize governments, donors and developed countries,” Lohani stressed.
Philippine Daily Inquirer
MANILA, Philippines—Governments worldwide will have to face head on the issue of climate change and its adverse effects, otherwise all their efforts toward development will go to waste.
“Climate change will roll back decades of hard won development gains,” unless goverments do something about it, said Antonio Hill, Oxfam senior climate change policy advisor, during the closing ceremonies of the 4th Asian Clean Energy Forum.
The reduction of gas emissions and significant increase in investments in clean technology are but some of the urgent measures being considered in the agenda to counter the effects of climate change.
Hill noted that emission reduction and large-scale financing had consistently cropped up during discussions this week and would be central to the deal in Copenhagen.
Oxfam estimated that the number of people affected by climate-related disasters would likely increase by a hefty 50 percent in six years’ time. In other words more than 375 million people will be affected by 2015.
Oxfam has turned its sights on climate change and its effects on poor communities, Hill said.
It has added its voice to the concerted effort to organize developing countries for treaty negotiations in Copenhagen, Denmark to hammer out a new climate change agreement in December.
On the same note, Asian Development Bank vice president for finance and administration Bindu Lohani said critical to mitigating climate change is large-scale financing, equality and technology transfer.
Lohani said that by 2030, countries would need as much as $22 trillion for energy investments and, of this amount, $7 trillion would be needed in Asia.
To meet renewable energy targets, some $6 trillion should be secured by Asian countries.
“We need to mobilize governments, donors and developed countries,” Lohani stressed.
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