Participated in a workshop organized by GIZ on Solar Energy in the Philippines

ADB and Renewable Energy

A Presentation at the Workshop on

Solar Energy in the Philippines -Opportunities for German Companies

Berlin, 12 September 2011

Naomi ChakwinResident Director General

ADB European Representative OfficeFrankfurt, Germany

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About ADB

• Vision: Asia and Pacific region free of poverty• Mission: help DMCs reduce poverty and improve quality of

life of their people• Development agendas: inclusive economic growth,

environmentally sustainable development, and regional integration

• Based in Manila, owned by 67 members including 48 from Asia and Pacific region

• 2010 approved financial assistance:– Loans and Grants: $12.4 billion – Technical Assistance: $326.5 million– Equity Investments: $243 million

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ADB Clean Energy (CE) Program

Objective(ADB Energy Policy)

Reliable, adequate, and

affordable energy for

inclusive growth in a socially,

economically and

environmentally sustainable

way.

- An early shift to the low-

carbon economy

ScopeLowering energy demand

Improve efficiency in household, utility

(water, gas, heating), transport, buildings

and industrial applications

Lower losses in energy supply

Improve efficiency in transmission and

distribution of electricity, gas and other fuels

Lower CO2 emissions

Upgrade power generation technology,

including carbon capture use and storage

Waste reduction and use, including methane

capture

Use alternate fuels, electric vehicles, rapid

and mass transit modes, bulk freight

services

Early commercialization of RE technologies

Develop wind, solar, biomass (without

conflicting food security), geothermal,

Off-grid applications to provide Energy for All3

Initiatives Carbon Market Initiative/Program

Energy for All

Wind Quantum Leap

Asia Solar Energy Initiative (ASEI)

Low-Carbon Technology Transfer Market

Place

Asian Renewable Energy Certificates

Initiative

Asian Clean Energy Venture Initiative

Climate PPP FundFunds and Partnership

Clean Energy Financing Partnership Facility

(CEFPF)

Climate Change Fund

Asia Pacific Carbon Fund, and Future

Carbon Fund

Asia Accelerated Solar Development Fund

Investments

Knowledge Products

Renewable Energy

Energy Efficiency

Cleaner Fuel

Technical Assistance

Reports

Workshops/Conferences

Publications

Innovative Instruments

ADB Clean Energy (CE) Program

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ADB’s Composition of CE Financing(Cumulative 2008-2010, in US$ million)

Renewable Energy :

3,074

Energy Efficiency:

1,234

Cleaner Fuel:318

Clean Energy Funds:

192

Hydro Wind Solar Others

1,674 638 206 556

54.4% 20.8% 6.7% 18.1%

Total Energy-related Investment (2008-2010): $ 9.1 BillionTotal Clean Energy Investment (2008-2010): $ 4.8 Billion

Note: “Others” in the breakdown of RE projects pertains to biomass/biogas, waste to energy

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Covering countries of Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam

Hydropower 14%

Geothermal3%

Solar 4%

Wind62%

Others (i.e. biomass &

ocean)

17%

RE Resource Potential in SEA

Renewable Energy Potential in Southeast Asia (SEA)

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• RE Portfolio Standard – also for off-grid supply; all contribute to RE growth

• Feed-In Tariff – priority, valid for 12 years

• RE Market – modify WESM

• Green energy option, net metering

• Financial incentives – tax holiday (7 y), import duty (10 y), CERs exempted, etc.

• National RE Board (NREB)

• Limits on installed capacity

• No public investment for grid connected

Source:

Dec 2008, Republic Act 9513 – Renewable Energy Act of 2008

www.doe.gov.ph/Laws%20and%20Issuances/ra.asp

Salient features of the 2008 Philippines Law on Renewable Energy

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Public Debate

The Manila Bulletin• The Board of Investments (BoI) is adopting

a cautious approach on renewable energy projects with feed in tariffs (FITs) as this form of government subsidy could further exacerbate the country's cost of power, which is already the highest in Asia.

• The main contention now is that if the FIT is set at very high rate then consumers may not be able to afford it.

• "We want to be cautious with those projects that will entail a FIT contract with the Philippine government because we are already the second highest in the cost of power in Asia," said Panlilio. He explained that the high cost of power has been the number one complaint among foreign investments against the Philippines.

Malaya Business Insight

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Current Market Situation

• Major power sector reform - EPIRA Electric Power Reform Act passed in 2001.

• Bid out over 3,000 megawatts of capacity to the private sector.

• Philippine Energy Master Plan forecast an additional 16,550 MW capacity for 2009-2030.

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Rural Area Electrification

• Village level electrification 99.87%

• Household connection level 74%

• Connection of about 1.8 million households expected through renewable energy – public and private.

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Philippines Energy Program

Expand support for energy use efficiency improvement and enhancement of generation capacity in renewable energy.

Private sector lending

Strengthen electricity distribution

Promote renewable

Target poor areas, especially Mindanao

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Strategic Interventions:

• Knowledge management

• Solar project identification and development

• Innovative financing(+ long-term debt financing)

Components:

• Asia Solar Energy Forum

• 3,000 MW solar power capacity installed by 2013

• Asia Accelerated Solar Energy Development Fund (AASEDF)(+ ADB normal funds)

Asia Solar Energy Initiative- Components

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Asia Solar Energy Forum (ASEF)An international knowledge-sharing platform that will track solar development projects, discuss new solar power proposals and incentive mechanisms, and organize major conferences.

Updates: 1st Meeting, Manila, 5-6 Jul 2010:

over 200 participants from 34countries / territories

2nd Meeting, Tokyo, 1-3 Dec 2010:Over 300 participants from 38 countries / territories

3rd Meeting, Bangkok, 30-31 May 2011: 375 participants from 34countries / territories

4th Meeting, venue tbd, early 201213

Project Development : 3,000 MW Target

Ongoing projects: 567-kW capacity solar power PV project at ADB Headquarters rooftop

73 MW and 44.4 MW projects in Thailand

10 MW solar PV power plants and 10.7MW Building Integrated PV projects, and 1.5 MW pilot CSP plant in China

$150 million Credit Guarantee to scale up India Solar Power Sector 5MW grid-connected solar PV system and hybrid wind (1MW), solar (1MW) and diesel

(5.5MW) system, 1000km of solar PV street-lighting and light emitting diode-based technology in 6 cities in Bangladesh.

Technical Assistance to develop up to 200 kW 5 RE pilot systems using hydro, solar PV, wind to serve rural communities in Mindanao, Philippines

Technical Assistance for Uzbekistan to establish a regional solar center and collection of solar resource data at 6 potential power plant sites

Projects in the pipeline: Gujarat Solar Park including transmission lines for 500 MW solar power plants

Several PPP projects enabling implementation of grid-connected solar power in India

Several public and private sector projects in Thailand, Sri Lanka, Maldives, Tonga, Bangladesh and Lao PDR

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Asia Accelerated Solar Energy Development Fund (AASEDF) - Structure

Risk

Mitigation

and Incentive

Generation

Mechanisms

To be

introduced

by

AASEDF:

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Asia Accelerated Solar Energy Development Fund (AASEDF) - Utilization

Project/Program Preparation

RiskMitigation

GenerationIncentives

Aggregation of solar market

• Solar generation capacity build-up

• Constant price discovery

• Multi-year, multi-stage development program

• Support for insolation data collection

• R&D incentives

Exploration risk• Pay or reimburse costs

incurred by government for quality data collectinon

Specification risk• Guarantee against revenue

fluctuations due to specified vs. actual insolation levels

Off-take and payment risk• Provide (or reinsure)

partial risk guarantees

Tariff shaping

• Prevent conflict between techno-commercial nature of dispatch operations and desirability to buy “green electricity”

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ADB Contacts

ADB European Representative OfficeMs. Naomi Chakwin, Resident Director GeneralEmail: nchakwin@adb.org – Tel: +49 69 2193 64002 Rahmhofstrasse, 60313 Frankfurt am Main

Energy for All InitiativeMr. Jiwan Acharya, Climate Change Specialist (Energy)Email: jacharya@adb.org - Tel: +63 2 632 6207www.adb.org/Clean-Energy/energyforall-initiative.asp

Asia Solar Energy InitiativeMr. Pil-Bae Song, Senior Advisor and Practice Leader (Energy)Email: psong@adb.org - Tel: 63 2 632 4461http://beta.adb.org/publications/asia-solar-energy-initiative-affordable-solar-power-asia-and-pacifichttp://beta.adb.org/publications/asia-solar-energy-initiative-primer

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