renewable energy in the philippines - tu-freiberg.de · 2018-04-17 · philippine energy sector....
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Renewable Energy in the Philippines
Challenges in an Emerging Market
Alan Silayan, IMRE 2002
Philippine Energy Sector
Text
Power Sector Situationer
2009 Transmission
Interconnection Line Capacity
•! Leyte-Luzon (440 MW)
•! Leyte-Cebu (400 MW)
•! Cebu-Negros (200 MW)
•! Negros – Panay (100 MW)
•! Leyte-Bohol (100 MW)
*
Energy sector distribution - ! 32% Renewable
14%
17%
28%
0%
9%
32%
Hydro Geothermal Coal Wind/Solar Oil Nat Gas
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
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Industrial Power Costs in Asia
Philippine growth driven by non energy intensive service and commercial sector
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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
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
RE Policy
RA 9513 - 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
Market Barriers
High upfront cost and technologies
Non-viable markets
Inaccessible Financial Packages
Social Acceptability
High Upfront Cost and Technologies
Income Tax Holiday and Low Income Tax Rate
Duty-free Importation of Equipment and VAT-zero Rating
Reduced Government Share
Viable RE Markets
Harmonization of Market Rules, in accordance with other Laws
Oil Deregulation Law
Electric Power Industry Reform Act
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
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
Projects Issued RE Service Contracts by DOE
RE Project TypeRE Project
TypeMW
Max Allowable (MW)
Hydropower 107 840 250
Wind 44 921 200
Geothermal 17 2,388 -
Biomass (own-use) 16 145 100
Biomass 11 139 150
Ocean Thermal Energy Conversion
2 To be determined
-
Ocean 1 5
Solar 50
TOTAL 199 4,439.2
Proposed Feed-In Tariff
Wind
Solar
Ocean
Run-of-river Hydro
Biomass
Project Concept
Project Implementation
GAP
‣Financing for pre-project development
‣Project financing
‣Local technology not available
‣Lack of experience in RE projects
CDM - Global Context
Decreasing Demand for CERs
Uncertainty in Post-2012 agreement
Transition from Seller to Buyer’s market
Increasing trend of market fragmentation
CER as a credit enhancement tool
Incremental annual cash flow for the project
Incremental IRR for the project
PROJECT Incremental IRR
Wind 0.8 - 1.3 %
Biomass 1-2 %
Hydro 1 - 3 %
Waste to Energy 3 - 5 %
Type of ProjectNumber of Projects
RegisteredCERs issued
Biomass 5 0
Hyro 5 0
Geothermal 1 0
Wind 1 173.589
CDM and RE in the Philippines