Renewable energy development plays a vital role for the advancement of Philippines, as the country is one of the fastest growing in Asia with over 94 million residents. Philippines is the second-largest producer of geothermal energy in the world, with installed capacity of nearly 1,972 MW. Growth here has been fuelled by strong government support to meet the power needs of a growing population. According to the Philippine Department of Energy, electricity demands are expected to double by 2020. As per Ipsos Business Consulting, Philippines is still by far the most developed market with an existing capacity of 5,439 megawatts, or 56% of total installed Renewable Energy capacity across the six key ASEAN countries, which also include Thailand, Indonesia, Malaysia, Vietnam and Singapore.
Further, in order to reduce the dependence on oil there are serious efforts by the Philippine government to meet its energy needs. Based on the National Renewable Energy Program (NREP), the Philippine government is pushing for a three-fold increase in the use of RE resources to more than 15,000 megawatts within a 20-year period, with expected investments seen reaching roughly a Peso 1 trillion.
Renewable energy developers are reviewing the viability of their projects after the Energy Regulatory Commission (ERC) approved lower-than-expected feed-in tariff (FIT) rates. The Philippines ERC has approved feed-in tariff rates for hydroelectric, biomass, wind and solar energy sources. Run-of-river hydroelectric power sources will enjoy a 5.90 Pesos a kilowatt-hour tariff, biomass 6.63 Pesos, wind 8.53 Pesos and solar 9.68 Pesos. The lowered tariffs will cushion the impact of the incentive mechanism on electricity rates, while attracting investments in renewable energy, ERC Executive Director Francis Saturnino said in the statement.
The government is also set to award up to 80 permits to local and foreign firms to explore potential renewable energy sites as it aims to triple its clean-power capacity to account for half of its energy needs within 20 years. There is already a lot of interest being generated in terms of foreign investment.
Listed renewable energy firm Greenergy Holdings Inc. has completed its sale of Peso 25 million worth of shares to a Southern Field Ltd, foreign private equity fund. Greenergy is in a joint venture with China-based Tianjin Tianbao for the construction of US$1.3 billion worth of wind power projects with a total generating capacity of 1,000 megawatts (MW) in the Philippines in the next 10 years. Initial investment will cost US$200 million for a 49.5-MW wind energy project composed of 33 units of 1.5-MW wind mills.
Further, TeaM Energy Philippines Corp., a joint venture between Japanese firms Tokyo Electric Power Co. and Marubeni Corp., is looking at 10 renewable energy projects as part of its expansion plans.
Renewable energy is expected to play a significant role in the power sector in the coming years. Experts believe that, Philippines has a lot of untapped potential in this sector and the geographical advantage it enjoys in terms of wind and unlimited solar energy throughout the year makes it an ideal sector for investment in the future.
(Source: Insight Alpha)