financing re - doe

8/9/2019 Financing RE - DOE

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Financing Renewable EnergyBeyond Micro-Enterprise Financing:

Innovations in Microfinance

Apo View Hotel Davao City

30 July 2010

By: Ronnie N. SargentoDepartment of Energy


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ENERGY SECTOR AGENDA

I. Energy Security Increase indigenous oil and gas reserves development Strengthen and enhance energy efficiency and

conservation program Aggressively develop renewable energy potential

such as geothermal biomass, hydropower, solar, windand ocean energy resources

Increase use of alternative fuels Form strategic alliance with other countries

II.Power Sector Reforms Create a transparent privatization process Create an investment climate attractive to investors


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The 2009 RE Policy Framework Increase RE-based capacity by 100% within the next

10 years (2008-2020) Increase non-power contribution of RE to the energy

mix by 10 MMBFOE in the next ten years

Be the number one geothermal energy producer inthe world (additional 1,070 MW)

Be the number one wind energy producer inSoutheast Asia (additional 515 MW)

Double hydro capacity by 2018 (addl 3,400 MW) Expand contribution of:

biomass 200 MW

solar 30 MW

ocean energy 120 MW


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Moving Towards Accelerated Development

A Quick Look at RE : (2008 2030)

CurrentREactivities4.8%demandgrowth rate

Approval of RE Bill2008

52 3 4

Small capacity REprojects are added to

the grid; big REprojects are in thepipeline

2010

Policy is in place; salient

provision of the law willspur Interest; activities onRE development isexpected to accelerate

1

5-year continuing REproject packaging and

Intensive promotionalactivities

Emergence of ocean

energy projects, e.g.OTEC, wave, marineand tidal

Diversification of REresources; databasepreparation andProject packaging ofemerging technologies

Development

Of ocean energyprojects

2-year development of REdatabase and

enhancement of techlexpertise of REstakeholders

2015 2020 2030

Commercialization

of ocean energyproject options

Double RE capacity (4.8% growth rate)

- 8,072.3 MW capacity available in Luzon

- 2,442.6 MW capacity available in Visayas- 2,963.6 MW capacity available in Mindanao

Optimization ofRE Resources


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Summary of Resources

Geothermal Resource 1,200 MW

Hydropower - 10,500 MW

Wind resources 76,600 MW

Solar Energy untapped vast potential asa tropical country

Ocean energy - 170,000 MW

Biomass (bagasse) total potential of 235.7MW


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The 2009 RE Policy Framework

RESOURCEEXISTINGCAPACITY

08 (MW)

TARGETCapacity

(MW)

TOTAL

in 2030

Investment($Bn/MW)

Geothermal 2,027 1,070 3,097 2.14

Hydro 3,367 3,400 6,767 6.80

Wind 33 515 548 1.29

Solar 5 30 35 0.09

Biomass 57.2 200 268 0.40

Ocean 0 120 120 0.42

Total 5,489.2 5,355 10,835 10.88

USD 2.0 M/MW (Hydro, Geothermal & Biomass)

USD 2.5 M/MW (Wind);USD 3.5 M/MW (solar & ocean);

Source: DOE REPF


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The Impact of the RE LawAs of July 2010

RESOURCE

EXISTINGCAPACITY

2008 (MW)

TARGET

Capacity

2030 (MW)

AwardedContracts

to date

EstimatedCapacity ofthe Contract

Geothermal 2,027 1,070 20 2,388

Hydro 3,367 3,400 122 850

Wind 33 515 44 1,000

Solar 5 30 1 1

Biomass 57.2 200 11 131.9

Ocean 0 120 2 5

Total 5,489.2 5,355 218 4,375.9


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Why RE is key to Development?

Energy Security Power is a vital element for

development;

Reduce oil importation

Philippines is anarchipelagic country;

200,000 MW of

estimated RE potential RE can be develop through

grid and off-grid


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Challenges

Establishments of the following methodology underRA 9513;

Feed-in-Tariff Renewable Portfolio Standards

Financing RE Projects Perceived investment risks are still an issue

Technical Expertise Available to do technical studies Limited engineers and technical consultants to conduct

feasibility studies

Social Acceptability Price Environmental Effects Safety

Sustainability


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How Much is RE?

Type of Plant Investment(in USD per kW)

Generation Cost

(PhP per kWh)

Oil 991 7.8

Mini-hydro 2,000 4.8

Geothermal 2,000 6.4

Biomass 1,900 6.2

Wind 2,000 5.8

Source: CBRED Policy Study - 2003


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Report Card of the DOE

Programs and Accomplishments


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DOE-UNDP Project on Capacity BuildingTHE SIX (6)

COMPONENTS

1. Policy, Planning &InstitutionalCapacity Building

2. Market ServicesInstitutionalization

3. Information andPromotionProgram

4. Delivery &FinancingMechanisms

5. RE TrainingProgram

6. RE Technology

Support Program

BARRIERS TO BE ADDRESSED

Policy, Institutional, Financial, Technical, Market,

Information and TrainingEXPECTED OUTCOMES

Passage of enhanced RE Bill

Implementation of innovative RE programs andactivities

Establishment of sustainable Market Service Center

Accessible and updated RE-related information

Financing windows accessible to project developers

Enhanced capacity of RE sector in policy making,

planning, project implementation, and technologyextension.

Enhanced services to RE end-users.

PROJECT IMPACTS

Increased Utilization of RE from 2002 levels

29.6 MMT Equivalent GHG Emission Reduction


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RA 9513:Renewable Energy Act of 2008

Accelerate the development of the countrys renewable energyresources by providing fiscal and non-fiscal incentives to privatesector investors and equipment manufacturers / suppliers.


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One-Stop-Shop Framework


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Innovative Financing Mechanisms

Introduced fiscal and non-fiscal incentivesthrough RA 9513

Implement CBRED Project

Project Preparatory Fund USD 0.321 Million

Loan Guarantee fund

USD 2.6 MillionMicro-finance Fund

USD 0.536 Million


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The Role of Microfinancing for RE

Decentralized ApplicationCommunal Projects

Barangay, Sitio and Household

ElectrificationEquipment and supply Financing

Technical Services

Livelihood ComponentPrivate Sector initiatives

Own-use

ESCO


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