Philippine challenges in renewable energy implementation

Challenges in renewable energy development cited

By Claire-Ann Marie C. Feliciano, Reporter

BusinessWorld Online

June 25, 2013

ONE hundred thirty-eight countries, including the Philippines, have set renewable energy (RE) targets, but challenges in developing the resources remain, according to a new study by environmentalist groups.

In the report, "Meeting Renewable Energy Targets: Global Lessons from the road to implementation", the World Wide Fund for Nature (WWF) and the World Resources Institute (WRI) noted that challenges to upscale the implementation of RE projects must be immediately addressed to reach the global goal of 100% power from RE by 2050.

 The study showed that power harnessed from RE technologies -- specifically sun, water, wind, thermal vents and biomass -- currently supplies only 16.7% of the world’s power.

 The study highlighted the challenges in a bid to explain the factors critical to reach the national RE targets of seven specific countries: the Philippines, China, India, Germany, Morocco, South Africa and Spain.

 Samantha Smith, WWF Global Climate and Energy Initiative leader, said that setting targets is not enough, even though it represents a clear commitment to RE.

 "The real job is to create an enabling environment, including financing, assured access for the poor, infrastructure and capacity-building. This is what will ensure these targets are achieved," she said in a statement yesterday.

PHILIPPINES

 The report recognized that the Philippines’ energy mix already includes a high RE capacity, with data from the Energy department showing that RE already contributes about 40.6% of the country’s primary energy mix, as of 2011.

 In order to push forward the development of RE, the country has laid down a long-term energy plan which aims to increase the RE capacity to 15,304 megawatts (MW) by 2030.

 Hydropower is expected to account for 8,724 MW; geothermal, 3,461 MW; and wind, 2,378 MW. This would signify a total increase in renewable energy capacity by 9, 865.3 MW.

 However, despite significant support from government officials in meeting the targets, external opposition has set back the development of RE.

 "Opposition to feed-in tariff (FIT) rates came from various stakeholder groups, including project developers who wanted higher prices and consumer organizations that represent the interest of lifeline consumers," the report read.

 It also cited weak capacity in the Energy Regulatory Commission (ERC), leading to delayed RE mechanisms processing, which in turn "has caused investor uncertainty." This, according to the report, led to the loss of $2.5 billion in potential RE investments.

 The government has been pushing for various non-fiscal mechanisms to fast track the development of RE resources, including net metering, FIT, renewable portfolio standards, green energy option and renewable energy market.

 However, only the FIT has been finalized.

 The ERC approved in July 2012 FIT for run-of-river hydro (P5.90/kWh), biomass (P6.63/kWh), wind (P8.53), and solar (P9.68/kWh) RE projects.

 The FIT, which will be divided among consumers as a FIT allowance, will be paid to the RE developers over a period of 20 years.

 "The delay has caused frustration among industry stakeholders, who saw the anticipated development of renewable energy projects stalled due to lack of clarity in policies or slow action on these crucial rules," the report read.

 These delays in policy decisions, the report noted, was caused by disagreements between the government and various influential groups.

 "Opposition is mostly based on the argument that a feed-in tariff, to be called the FIT allowance, will result in additional charges, which will be collected from all electricity consumers..."

 The joint study by WWF and WRI said that the country’s experience with RE development serves as a good example of the importance of political will and overall mobilization of stakeholders.

 It said that despite the presence of the Renewable Energy Act of 2008 -- which sets the policy framework for the development of the RE sector -- many rules pertaining to the policy mechanisms have been delayed due to resistance from many stakeholders.

 The report called on the mobilization of the stakeholders -- government, private and public sectors -- through engagement and public participation.

 "Furthermore, coordinating decision-making and project planning processes, and ensuring the technical and human capacity exists by involving beneficiaries in the development stages, operation and maintenance of projects, will help strengthen the sector," it added.

 At a briefing held at Oakwood Premier in Pasig City, WWF Global Energy Policy Director Stephan Singer said, "If addressed appropriately and consistently, these barriers can become opportunities for creating fundamental and solid conditions for successful RE implementation."

 Meanwhile, WRI International Financial Flows and Environment Project Manager Athena Ballesteros emphasized the need for good governance to meet RE targets.

 "This report’s case studies show how successful RE implementation needs far more than financing and technology; it needs good governance," she said.

 "With RE investments expected to spike in the coming decades, it makes sense to maximize our natural assets," added Rafael Senga, WWF International Asia Pacific Energy policy manager.

 "In the 1970s, the Philippines had the foresight to invest in indigenous geothermal power. We must again retrace that path and invest in one of the country’s few competitive advantageous -- our vast renewable energy resources. And we need to do it now," Mr. Senga said.

***

Note by EastGreenfields Enterprises blog admin.

Net Metering at the time of this posting has been approved by ERC.