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AGHAM Notes on Renewable Energy in the Philippines
I. Introduction
The Philippines is rich in a variety of traditional and renewable energy sources that can be maximized to
achieve a well-balanced energy system that would answer to the needs of the people and aid the
country's genuine development.
Despite this potential, the Philippines is currently experiencing a power crisis with high power rates,
inefficient power plants and lines, shortage in power supply, and high-reliance on dirty imported energy
sources and technologies.
In this paper, Agham explores the issue of the use of renewable energy in the country and its place in
achieving a pro-people, pro-environment national power industry. The paper would go through the basics
of renewable energy (RE), the country's renewable energy resources and potentials vis-à-vis the current
energy pattern. The overarching policy and program of the government will then be discussed, its impacts
on the current energy landscape and Agham's critique on the current framework.
Agham concludes that the issue of renewable energy in the country is not simply a discourse on which
type of fuel should be used or maximized to answer to the needs of the country. The issue is who controls
these resources and to what ends does it serve. For as long as renewable energy is controlled and
utilized by big businesses and foreign interests, the benefits that RE is supposed to bring will not be felt in
the country. The country will not be able to break away from the pattern of energy insecurity, energy
inadequacy and unavailability for as long as RE utilization is not within the framework of national
industrialization and genuine development.
II. Basics renewable energy
Renewable Energy (RE) refers to energy sources that can be obtained from continuously recurring
energy processes and cycles in the natural environment, including energy sources from waste materials
and the technologies that utilize these energy sources. Example of renewable energy resources are:
energy that comes from flowing water (hydropower), the energy from the heat of the sun (solar energy),
energy from waste materials (biomass energy), geothermal energy and energy coming from the wind
(wind energy) and ocean energy.
These are contrasted with conventional energy such as nuclear and fossil-fuels such as coal, oil and
natural gas. These forms of energy draw on finite resources that will eventually dwindle, become
expensive or cause high environmental costs from mining to utilization.
These primary sources can be used directly such as for heating and motor fuel but are mostly
transformed into secondary sources such as for electricity generation. (Fig 1)
1
The major advantages of renewable energy is that it will never run out; results to little or no greenhouse
emissions and net carbon emissions; cheaper and more economically sound and facilities require less
amount of maintenance once put up. Compared with fossil fuel technologies, renewable energy industry
is more labor intensive, compared with fossil fuel technologies which are capital intensive and typically
mechanized, which would support more jobs and employment. Renewable energy can help stabilize
energy prices as the cost of these technologies are projected to drop. RE such as wind and solar are
more reliable and resilient energy systems or less prone to large-scale failure since they are distributed
and modular.
2
The disadvantages of RE is that they rely heavily upon the weather for sources of supply: such as rain,
wind and sunshine. They might not be able to provide enough capacity under certain climate conditions.
This is the advantages of conventional sources of energy such as coal, they are able to provide base load
power in support of large industries and can be generated in large quantities. Large tracks of land are
required also for solar panels and wind farms to be set up to meet up with large quantities of electricity
produced by fossil fuels.
3
In terms of other environmental and social impacts of RE, there is a need to distinguish between large-
scale and small-scale RE projects. Hydroelectric mega dams for example are renewable energy facilities
large dams also alter aquatic ecology and river hydrology upstream and downstream. This affects water
quality, can cause flooding on affected communities and negative socio-economic impacts.
4
Mega dam
construction have already displaced at least 40 million people worldwide, which include indigenous
peoples and fishing communities, according to the World Commission on dams 2000.
Within the RE sources, “New renewable sources” are differentiated. This include modern biomass, World
Commission on Dams (WCD) compliant small (up to 10 MW) hydro (mechanical as well as electric),
geothermal, wind, all solar, tidal, wave and other marine energy as defined by Citizens United for
Renewable Energy and Sustainability (CURES), an international NGO network founded after the World
Summit on Sustainable Development in 2002.
Among the technologies, each has its own advantages and limitations. In choosing the source of energy,
the factors to consider are the availability of supply to meet the forecasted demand, as well as the
environmental, social and economic costs and impacts of a particular source. The siting or location as
well as the existing infrastructure and applicable technology also needs to be considered to provide for
the most affordable, efficient, reliable and clean option to answer to the needs of the community, region or
country.
Overall, the reasons being cited at the international level for promoting renewable energy, is enumerated
in the 2011 report of United States Agency for International Development (USAID)
5
: a. security of supply,
b. sustainable economic growth, c. environmental sustainability, d. health care, e. energy access for
vulnerable, minority, rural and disadvantaged populations, f. maximizing the value of indigenous natural
resources, g. responding to the public interest.
III. Philippine renewable energy situation
a. Philippine RE potential
Even before the renewed interest of international community on renewable energy, the country has been
developing local energy resources to answer to the local needs of communities.
6
As proven by the
success stories of communities who have put up small scale RE systems and current research
7
, the
country is rich in renewable energy sources which can be tapped to provide affordable, clean and
accessible electricity to all and can be used to aid the development of the country. Theoretically, the RE
potential of the country, on top of the coal, natural gas and oil reserves, could propel the Philippines to
energy security and industrialization.
In terms of geothermal energy, the country has proven reserves of 2027 MW with potential reserves of
2380 MW. The total untapped hydropower resource potential of the country is estimated at 13,097 MW,
85.7 % or 11,233 MW are for large hydro in 18 sites and 1847 MW and 1847 MW are for 888 sites are
suitable for mini hydro capacities.
The Philippines is also well endowed with biomass resources generated by extensive agriculture,
livestock and forestry industries. Contributors to this biomass potential are fuelwood, bagasse, coconut
residues, ricehull, animal waste and municipal solid waste.
In terms of wind power, studies have identified 10,000 sites which can support 76,600 MW of installed
capacity. In terms of solar power, being located just above the equator, the Philippines likewise has a vast
potential for various solar energy applications.
A study by the Mindanao State University reveals a 170,000 MW theoretical potential for ocean energy,
with 16 possible areas for ocean thermal energy conversion and 18 potential sites for wave power. There
are 73710 hectares divided into 910 blocks open for ocean energy development.
b. Philippine Energy Use
In 2011, the total primary energy supply is 39.4 Million Tons of Oil Equivalent (MTOE), 60% from
indigenous or local sources, while 29.30% came from imported oil and 10.40% from imported coal. Of the
indigenous sources, 19.60% came from non-renewable sources, with coal having the highest share at
9.2%, then natural gas at 8.30%, and oil at 2.1%. Among the indigenous sources, at 40.7% share,
geothermal has the highest share at 21.70% followed by biomass at 12.40%, both renewable sources of
energy.
8
(Figure 2)
Of the total primary energy supply, the share of total fuel input used for power generation is 52.4% at 20.6
MTOE. The highest fuel input is geothermal at 41.4%, followed by coal at 28.0%, natural gas 15%, hydro
at 11.4%, 3.9% both from fuel and diesel oil. Among these 68.1% came from indigenous sources
according to DOE.
The total electricity generated in 2011 is 69,050 Gwh, 37% from coal, 29.8% from natural gas, 4.8% from
oil-based power plants. This means that 71.6% of the total electricity generated came from non-
renewable energy sources while 14.4% came from geothermal, 13.7% came from hydro, and .3% from
wind, solar, biomass. (Fig 3)
The DOE boasts of having a 60% self-sufficiency level in the country's primary energy mix with 40.7%
coming from renewable energy in 2011. But according to the presentation of Mr. Serafica of REAP, the
self-sufficiency percentage of the country is decreasing from 2009 to 2012. If this trend continues, based
on the 57.4% energy self sufficiency levels in 2012, this would be down to 14.5% by 2035. Imported oil is
65.7% and imported coal is 59.3% of the country's primary energy mix.
The country's dependence on fossil fuels and imported fuel for the primary energy mix makes the
country's energy security vulnerable as it is threatened by global political and economic events,
dependent on investments of multi-national oil companies and affected by global supply oil declines
making price volatile and susceptible to price hikes. That is why it is imperative for power distributors to
maintain a diverse portfolio of power supply contract with different sources and increase the use of
indigenous and renewable sources of energy.
9
Of the total primary energy mix, 52.4% is used as fuel for power generation with 68.1% self-sufficiency
level. However, of the total electricity generated in 2011, 71.6% came from non-renewable sources,
28.10% came from conventional and large-scale renewable energy projects which are geothermal and
large hydro-electric power plants with only .3% coming from wind and solar sources.
The trend of the installed capacity in the Philippines is that coal-fired power plants are increasing as well
as large hydro-electric dams (Fig 4). The country's increasing use of coal and hydro has environmental
implications. In the case of coal-fired plants, this means increase in greenhouse gas emissions which is
the major cause of climate change and air pollution. The prominence of large-scale power plants such as
hydro electric dams, on top of the large-scale environmental destruction that they cause, result to
massive physical, economic and social impacts to communities.
Geothermal power plants and natural gas have remained stagnant while new renewable technologies
show a very slow increase. The neglect of the development of indigenous and new renewable energy
technologies is tantamount to neglect in the electrification of far-flung communities. Small scale
renewable energy projects could electrify those not connected to the grid or the 16 M or 17% of the
country's population which has no access to electricity in 2012.
This trend in RE use is reflective of the global trend. According to the 2013 Global Status Report on
Renewables, total renewable power capacity worldwide exceeded 1,470 gigawatts (GW) in 2012, up
about 8.5% from 2011. Hydropower rose to an estimated 990 GW, while other renewables grew 21.5% to
exceed 480 GW. Wind power accounted for about 39% of renewable power capacity added in 2012,
followed by hydropower and solar PV, each accounting for approximately 26%.17. Solar PV capacity
become the third largest renewable technology in terms of capacity (but not generation), after hydro and
wind. However, fossil fuels and nuclear remain the largest source of electricity in the world. (Fig 4)
10
USAID, in its report asked why is RE not the only form of energy used in the world today, light of the
various benefits offered by RE? They stated that the three basic reasons why renewable energy generally
has a hard time competing in the market place: a. RE projects tend to have high initial capital costs,
making RE unattractive in the short term; b. The market place is often saturated with incumbents that
benefit from direct and indirect subsidies, and so is not an “open” market per se; c. The societal costs or
externalities that make renewables attractive compared to conventional resources are difficult to quantify
and not attempted in most business analyses. When these costs are accounted for (e.g., long-term
reduction in costs associated with damage from emissions), RE projects can prove attractive when
compared to conventional resources.
Of course, the assumption in the USAID report above is that RE could only be pushed and developed
using the neo-liberal framework of liberalization, privatization and deregulation and free market to remove
the barriers in investments and entry of foreign and private companies in the RE industry as in the case in
the Philippines.
IV. Philippine policy and program on renewable energy
The Department of Energy, under President Aquino, has set high targets to increase the RE-based
capacity of the country to an estimated 15,304 MW by the year 2030, almost triple its 2010 level in its
National Renewable Energy Program (NREP).
11
As per technology basis, the NREP intends to achieve the following targets:
1. For geothermal, increase capacity by 75.5 % by installing an additional capacity of 1,495.0 MW
by 2027 on top of the installed capacity 1,495.0MW of 2010 baseline year, making the total
installed capacity 3,461.0 MW by 2030.
2. For hydropower, increase capacity by 160% by installing an additional capacity of 5,394.1MW by
2023 on top of the installed capacity 3,400 MW of 2010 baseline year making the total installed
capacity 3,400.0 MW by 2030
3. For wind, attain grid parity with the commissioning of 2345 MW additional capacity by 2015 on top
of the installed capacity of 33MW making the total installed capacity 2,378.0MW by 2030.
4. For biomass, deliver additional 277 MW additional capacities by 2022 on top of the installed
capacity of 9.0MW making the total installed capacity 315.7MW by 2030
5. For solar, mainstream an additional 284 MW solar power capacities on top of the installed
capacity of 1 MW making the total installed capacity 285 MW and pursue the achievement of the
1528 MW aspirational target by 2030.
6. For ocean, develop the 1st ocean energy facility for the country with 70.5MW capacity by 2025.
The targeted capacity addition of 9865 MW requires a total investment Php1.2 trillion or USD 26 Million.
Php17.2 Billion is already committed by private sector for the development of 124.6 MW and Php 1.15
trillion is still needed for the development of the 9740.7 MW indicative projects. The summary of targets
and needed investments are summarized in the table below. (Table 1)
Table 1. Summary of NREP goals and estimated investment requirements
Sector NREP intends to Installed
Capacity
(MW)
2010
Total
Capacity
Addition
(MW)
2011-2030
Total
Installed
Capacity
(MW)
by 2030
Committed
Projects
(MW)
Estimated
Investment
Require-
ment
(MIllion
USD)
Indicative
Projects
Estimated
Investment
Require-
ment
(MIllion
USD)
Geothermal Increase geothermal
capacity by 75.5 % by
2027
1,966.0 1,495.0 3,461.0 70.0 210.0 1,425.0 4,275.0
Hydro Increase hydropower
capacity by 160 % by
2023
3,400.0 5,394.1 8,724.1 27.8 69.5 5,366.3 15,112.8
Wind Attain wind power grid
parity with the
commissioning of
2345 MW by 2015
33 2,345.0 2,378.0 26.8 102.1 2,345.0 4,690.0
Biomass Deliver additional 277
MW additional
capacities by 2022
9.0 276.7 315.7 249.9 622.4
Solar Mainstream and
additional 284 MW
solar power capacities
and pursue the
achievement of the
1528 MW aspirational
target by 2030
1.0 284.01 285.0 284.0 710.1
Ocean Develop the 1st ocean
energy facility for the
country by 2025
0 70.5 70.5 70.5 246.8
TOTAL RE 5439 9,865.3 15,304.3 124.6 381.6 9,740.7 25,622.1
TOTAL 16,359
The NREP was formulated in 2010 as prescribed by The Renewable Energy Act of 2008 or R.A. 9513
(RE Act), which was signed into law on December 16, 2008, and gained effectivity on January 2009. The
Implementing Rules and Regulation became effective the same year, which is said to accelerate the
exploration and development of renewable energy (RE) resources.
The law provides for fiscal incentives and policy mechanisms to lure investors into putting up RE projects
in the country. The law also mandates the development of a “strategic program” to increase RE usage in
the country. Much like the country's overarching energy and power framework, the RE Act provides a
framework for private sector to invest in the country, commercialize RE technologies and create markets
for RE.
Among the incentives for RE participants and developers are seven-year income tax holidays for RE
developers, exemption from VAT and duty-free importation of equipment and machinery, reduction of
corporate income tax after the expiry of the income tax holiday to 10% of net income as well as a zero
percent VAT rate for the sale of power from RE, tax rebate for renewable energy components of
equipment, tax credit on domestic capital equipment and services, among other provisions.
The policy mechanisms to energy RE development in the country include, renewable portfolio standards,
net metering for end users, priority dispatch, and feed-in-tariffs on emerging technologies. Below is the
summary of the RE Policy Mechanisms that should have been put into place 1 year after the signing of
the law.
a. The Renewable Portfolio Standards or RPS, is a market-based policy that requires
electricity suppliers to source a certain portion of their supply from RE. While creating a
demand for RE, the RPS generates competition among RE developers, thereby, allowing the
mandated parties to meet their targets in a least- cost manner.
b. Feed-in-tariff system sets a fixed price for electricity sourced from renewable energy for 12
years. This is applied for generation utilized in complying with RPS and for electricity
produced from emerging RE resources (wind, solar, ocean, run-of-river hydro and biomass).
This mechanism ensures generators priority connection to the grid, priority purchase and
transmission of and payment for by grid system operators.
c. Renewable Energy Market or REM, where RE power can be traded, purchased or sold, as
part of the infrastructure support to facilitate compliance with the RPS mandate. It is
envisioned to be a module of, linked to and be a function of the Wholesale Electricity Spot
Market (WESM).
d. The Green Energy Option, gives consumers the choice to use RE. In essence, the Green
Energy Option accelerates the open access concept under the Electric Power Industry
Reform Act of 2001 (EPIRA).
e. Net Metering arrangement, allows distribution grid users who may produce RE power be
appropriately credited with its contribution to the grid.
These policy mechanisms and incentives are placed to encourage businesses in RE development and
expansion, which is exactly the bottom line of the RE Act. The law and mechanisms were not placed to
encourage local development and government support in RE technologies. The law is to serve the most
significant concern for investors and businesses, which is whether they will make profit by engaging in the
Philippine market.
The Philippine government seemed to have failed in promoting investments in RE. In 2012, the
Gesellschaft für Internationale Zusammenarbeit (GIZ), assessed the legal framework of 15 developing
and emerging countries, including the Philippines, to see if the policies, mechanisms, and strategies have
helped in the achievement of the self-set targets of the countries. Among the countries studied, nine out
of the 10 common policy mechanisms are included in the Philippine's strategy in achieving RE targets.
Based the GIZ's assessment, since major strategic policies have been introduced in 2008, much of the
RE targets have not been reached because the government has not implemented the concrete regulatory
policies yet. The study also mentioned that even previous targets have not been met such as the period
covering 2001 to 2011, within which the government targeted an installed RE capacity of 8.96 GW by
2012 in its ‘New and Renewable Energy Program’.
Even with the government's generous incentives for RE promotion, RE policy in the country came in later
than the much established overarching law in energy and power. It is within this policy and existing power
industry that RE development can be understood.
IV. Government's overarching policy on energy and existing power industry
a. The Electric Power Industry Reform Act
The policy framework on the country's energy resources and power infrastructure has been geared
towards privatization even under the administration of President Corazon Aquino. Executive Order
215 in 1987 abolished the monopoly of National Power Corporation (NPC) and gave incentives for
private investment in generation – paving the way for liberalization. RA 6957 or the Build-Operate-
Transfer (BOT) law, the first in Asia, was passed in 1990 (and subsequently amended and expanded
in 1994) which lifted restrictions on the entry of private firms in infrastructure including in power.
In 1992, under the Ramos Administration, Republic Act (RA) 7638 or Department of Energy Act of
1992 was passed. The law created the DOE, and declares state policy and objectives for the energy
sector. The department "shall prepare, integrate, coordinate, supervise, and control all plans,
programs, projects, and activities of the Government relative to energy exploration, development,
utilization, distribution, and conservation."
Among the powers and functions of the DOE is to "develop and update the existing Philippine energy
program which shall provide for an integrated and comprehensive exploration, development, utilization,
distribution and conservation of energy resources, with preferential bias for environment-friendly,
indigenous, and low-cost sources of energy. The program shall include a policy direction towards the
privatization of government agencies related to energy, deregulation of the power and energy industry
and reduction of dependency on oil-fired plants."
In 2001, the Philippines enacted the Electric Power Industry Reform Act (EPIRA), as a conditionality
imposed by the major international creditors which include the Japan Export-Import Bank, Asian
Development Bank (ADB), and World Bank (WB) before the release the power reform program loans to
finance the country’s power development program.
EPIRA provided a framework for the restructuring of the electric power industry, including the complete
privatization of the assets of NPC, the transition to competitive structure, the responsibilities of the various
government agencies and private entities. In line with the definition of the powers of the government
agencies, the EPIRA amended the functions of the DOE and added to its mandate the supervision of the
restructuring of the electricity industry.
On top of the major scope of EPIRA already mentioned, the President of the Philippines shall reduce the
royalties, returns and taxes collected for the exploitation of all indigenous sources of energy, including but
not limited to, natural gas and geothermal steam, so as to effect parity of tax treatment with the existing
rates for imported coal, crude oil, bunker fuel and other imported fuels. This provides for the equalization
of taxes and royalties on the exploitation of natural energy sources which just means their removal. This
would make the country's resources free for plunder and profit to all takers which are mostly foreign-
owned transnational companies.
As to RE developers, project proponents shall have an open access to the industry and could operate on
its own pace without having much problems with regards to stringent process of project approval the
industry is currently practicing. The burden of obtaining a Power Purchase Agreement will then be
relieved from the RE proponents. Those who can deliver the best offer shall have all the advantage of
getting into business without being bothered by some regulatory policies and procedures being
implemented by government dealing with power negotiations.
The EPIRA essentially paved the way for complete privatization, liberalization and deregulation of the
country's power industry from the generation, transmission to distribution. The government, through the
DOE has been reduced to supervising function and gave up responsibility of providing power to the
Filipino to private investors. This kind of power industry structure, as dictated by EPIRA, has resulted to
the increase in the ownership of IPPs of the total electricity generation in the country.
b. Philippine power industry
The country's energy structure, that is dominated by IPPs which are owned by large power players, both
local and foreign present an uneven playing field to small RE developers or even new power industry
participants. These IPPs own the country's large traditional and RE power plants.
In 2008, the year RE Act was enacted, 68% was still generated by NPC-IPPs, NPC-SPUG and NPC, with
only 32% generated by IPPs. In 2012, four years after, 79% of the total electricity generated is owned by
IPPs, while only 21% was generated with NPC remaining and unprivatized assets.
In the Energy Forum Presentation of the DOE in 2012, San Miguel Energy Corporation (SMEC)
controlled 20% of the country's installed generating capacity, the Aboitiz Power corporation and First Gas
of the Lopezes each controlled 17% of the Philippine Market Share. Other IPPs control 22%. The PSALM
or unprivatized assets of the NPC and NPC still controlled the 24% of the total installed capacity.
12
This pattern of ownership, where big businesses and foreign partners dominate, is reflected in the
country's renewable energy sector.
As of 2010, there are 7 geothermal producing fields and power plants in the country, all are owned and
operated by the private sector. The Energy Development Corporation (EDC) of the Lopezes is
responsible for the development of 1219 MW production fields while Chevron Geothermal Holdings is the
steam field developer of 747MW.
For the powerplants, the Tiwi and Makban geothermal plants, 693 MW combined installed capacity are
owned by the Aboitiz. The Lopezes own the Bacman geothermal plant in Sorsogon as well as all the
geothermal power plants in Visayas.
Majority of the 40 hydroelectric power plants are also controlled by the top 3 biggest company. The
Aboitiz Group control Ambuklao, Binga and Magat hydroelectric power plants, with aggregate capacity of
603MW. First Gen Corporation (First Gen) own the 132 MW Pantabangan-Masiway hydropower plant
complex in the province of Nueva Ecija. San Miguel Energy Corporation (SMEC) 45MW San Roque
hydropower plant controlled by Strategic Power Development Corporation in Luzon.
The prevailing policy and regulatory environment, as dictated by the EPIRA which was enacted 8 years
before the RE law prioritized the development of private large-scale conventional and/or RE based
electricity generation capacity and energy production facilities. Prevailing policy and regulatory
environment inadvertently reduces available opportunities and market potential for small RE systems,
particularly for community initiated and managed energy projects.
The almost unchanged installed capacity of small renewable energy projects in the country, with coal
power plants even gaining an increased share from 21% in 2008 to 32% in 2013 of the country's total
installed capacity show that even with the passage of the supposedly ambitious RE Law in 2008, the
country's energy pattern remain the same.
c. Partnerships with foreign interests
The big power players, in partnerships with foreign entities. RE investors in developing countries include
governments, banks, equity firms, insurance companies, pension funds, industry bodies, clean energy
companies, and start-up project developers.
The RE investment functions performed by banks include corporate lending, project finance, mezzanine
finance, and refinancing. Debt finance is usually provided by banks, whereas equity finance is often
provided by equity, infrastructure and pension funds, either into companies or directly into projects or
portfolios of as- sets. Different types of investors will engage depending on the type of business, the
stage of technology development, and the degree of associated risk.
Since the Philippine governments lack programs to encourage the development of local manufacturing of
RE technology components, foreign manufacturers will penetrate the market. The level of involvement
among foreign manufacturers is illustrated by the experience of the ATN 30 MW Solar PV Project in the
Philippines. So far some 50 foreign PV panel manufacturers have engaged with the project developers,
five of whom indicated interest even to provide project financing tied to the PV panel supply. The
schematic diagram portrays the current liaison of ATN Solar with foreign suppliers and contractors (Fig
9)
13
V. Conclusion
The Power Industry plays a central role in national development. Accordingly, it is the responsibility of the
State to provide for an accessible, efficient, reliable, and environmentally sustainable power industry
through the maximization of indigenous and renewable sources with the aim of propelling the country
towards national industrialization.
Much of the problems that we are experiencing are tied to the current energy and power industry
framework, policies, programs and projects of the government, as the government has delegated its
responsibility to direct a strategic public utility to the private sector and has lost its capacity to direct the
nation’s long-term growth.
The issue on renewable and indigenous sources of energy in the Philippines is not simply a discourse on
which is a better form of energy, traditional or renewable. It is ultimately an issue of who controls these
resources and to what end do they serve.
Much like the privatization of the country's power generating plants, transmission lines and power
infrastructure through the Electric Power Industry Reform Act of 2001 (EPIRA), the country's energy
potentials are also up for sale, as the government fully opens the opportunity to explore, exploit and
plunder our energy resources to foreign and private investors.
The privatization and liberalization of renewable energy resources and development has long term and
strategic implications on our national development and will burden the Filipino people with high utility
rates and long term energy insecurity.
1
Major primary and secondary energy sources. http://chethoughts.com/?p=637
2
Union of Concerned Scientists. http://www.ucsusa.org/clean_energy/our-energy-choices/renewable-
energy/public-benefits-of-renewable.html
3
http://www.conserve-energy-future.com/advantages-and-disadvantages-of-renewable-energy.php
4
http://www.fao.org/docrep/005/y3994e/y3994e0i.htm
5
United States Agency for International Development (USAID). Encouraging Renewable Energy
Development: A handbook for international regulators. January 2011. www.naruc.org/international
6
As stated by Vicky Lopez of SIBAT at the RTD hosted by Agham on RE, 2014.
7
NREB,
8
Philippine Energy Plan 2012-2030. Department of Energy.
https://www.doe.gov.ph/doe_files/pdf/Researchers_Downloable_Files/EnergyPresentation/PEP_2012-
2030_Presentation_(Sec_Petilla).pdf
9
NSCB. Jose Ramon G. Albert,What Drives Electricity Rates to Go Up, Up and Away? 27 September
2013. http://www.nscb.gov.ph/sexystats/2013/SS20130927_electricity.asp#tab4
10
REN21. 2013. Renewables 2013 Global Status Report
11
https://www.doe.gov.ph/microsites/nrep/index.php?opt=nrepbook
12
http://www.kpmg.com/global/en/issuesandinsights/articlespublications/documents/energy-report-
philippines.pdf
13
International Renewable Energy Agency (IRENA). Financial Mechanisms and Investment Frameworks
for Renewables in Developing Countries. December 2012

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AGHAM Notes on Renewable Energy in the Philippines

  • 1. AGHAM Notes on Renewable Energy in the Philippines I. Introduction The Philippines is rich in a variety of traditional and renewable energy sources that can be maximized to achieve a well-balanced energy system that would answer to the needs of the people and aid the country's genuine development. Despite this potential, the Philippines is currently experiencing a power crisis with high power rates, inefficient power plants and lines, shortage in power supply, and high-reliance on dirty imported energy sources and technologies. In this paper, Agham explores the issue of the use of renewable energy in the country and its place in achieving a pro-people, pro-environment national power industry. The paper would go through the basics of renewable energy (RE), the country's renewable energy resources and potentials vis-à-vis the current energy pattern. The overarching policy and program of the government will then be discussed, its impacts on the current energy landscape and Agham's critique on the current framework. Agham concludes that the issue of renewable energy in the country is not simply a discourse on which type of fuel should be used or maximized to answer to the needs of the country. The issue is who controls these resources and to what ends does it serve. For as long as renewable energy is controlled and utilized by big businesses and foreign interests, the benefits that RE is supposed to bring will not be felt in the country. The country will not be able to break away from the pattern of energy insecurity, energy inadequacy and unavailability for as long as RE utilization is not within the framework of national industrialization and genuine development. II. Basics renewable energy Renewable Energy (RE) refers to energy sources that can be obtained from continuously recurring energy processes and cycles in the natural environment, including energy sources from waste materials and the technologies that utilize these energy sources. Example of renewable energy resources are: energy that comes from flowing water (hydropower), the energy from the heat of the sun (solar energy), energy from waste materials (biomass energy), geothermal energy and energy coming from the wind (wind energy) and ocean energy. These are contrasted with conventional energy such as nuclear and fossil-fuels such as coal, oil and natural gas. These forms of energy draw on finite resources that will eventually dwindle, become expensive or cause high environmental costs from mining to utilization. These primary sources can be used directly such as for heating and motor fuel but are mostly transformed into secondary sources such as for electricity generation. (Fig 1) 1 The major advantages of renewable energy is that it will never run out; results to little or no greenhouse emissions and net carbon emissions; cheaper and more economically sound and facilities require less amount of maintenance once put up. Compared with fossil fuel technologies, renewable energy industry is more labor intensive, compared with fossil fuel technologies which are capital intensive and typically
  • 2. mechanized, which would support more jobs and employment. Renewable energy can help stabilize energy prices as the cost of these technologies are projected to drop. RE such as wind and solar are more reliable and resilient energy systems or less prone to large-scale failure since they are distributed and modular. 2 The disadvantages of RE is that they rely heavily upon the weather for sources of supply: such as rain, wind and sunshine. They might not be able to provide enough capacity under certain climate conditions. This is the advantages of conventional sources of energy such as coal, they are able to provide base load power in support of large industries and can be generated in large quantities. Large tracks of land are required also for solar panels and wind farms to be set up to meet up with large quantities of electricity produced by fossil fuels. 3 In terms of other environmental and social impacts of RE, there is a need to distinguish between large- scale and small-scale RE projects. Hydroelectric mega dams for example are renewable energy facilities large dams also alter aquatic ecology and river hydrology upstream and downstream. This affects water quality, can cause flooding on affected communities and negative socio-economic impacts. 4 Mega dam construction have already displaced at least 40 million people worldwide, which include indigenous peoples and fishing communities, according to the World Commission on dams 2000. Within the RE sources, “New renewable sources” are differentiated. This include modern biomass, World Commission on Dams (WCD) compliant small (up to 10 MW) hydro (mechanical as well as electric), geothermal, wind, all solar, tidal, wave and other marine energy as defined by Citizens United for Renewable Energy and Sustainability (CURES), an international NGO network founded after the World Summit on Sustainable Development in 2002. Among the technologies, each has its own advantages and limitations. In choosing the source of energy, the factors to consider are the availability of supply to meet the forecasted demand, as well as the environmental, social and economic costs and impacts of a particular source. The siting or location as well as the existing infrastructure and applicable technology also needs to be considered to provide for the most affordable, efficient, reliable and clean option to answer to the needs of the community, region or country. Overall, the reasons being cited at the international level for promoting renewable energy, is enumerated in the 2011 report of United States Agency for International Development (USAID) 5 : a. security of supply, b. sustainable economic growth, c. environmental sustainability, d. health care, e. energy access for vulnerable, minority, rural and disadvantaged populations, f. maximizing the value of indigenous natural resources, g. responding to the public interest. III. Philippine renewable energy situation a. Philippine RE potential Even before the renewed interest of international community on renewable energy, the country has been developing local energy resources to answer to the local needs of communities. 6 As proven by the success stories of communities who have put up small scale RE systems and current research 7 , the country is rich in renewable energy sources which can be tapped to provide affordable, clean and accessible electricity to all and can be used to aid the development of the country. Theoretically, the RE potential of the country, on top of the coal, natural gas and oil reserves, could propel the Philippines to energy security and industrialization. In terms of geothermal energy, the country has proven reserves of 2027 MW with potential reserves of 2380 MW. The total untapped hydropower resource potential of the country is estimated at 13,097 MW, 85.7 % or 11,233 MW are for large hydro in 18 sites and 1847 MW and 1847 MW are for 888 sites are suitable for mini hydro capacities.
  • 3. The Philippines is also well endowed with biomass resources generated by extensive agriculture, livestock and forestry industries. Contributors to this biomass potential are fuelwood, bagasse, coconut residues, ricehull, animal waste and municipal solid waste. In terms of wind power, studies have identified 10,000 sites which can support 76,600 MW of installed capacity. In terms of solar power, being located just above the equator, the Philippines likewise has a vast potential for various solar energy applications. A study by the Mindanao State University reveals a 170,000 MW theoretical potential for ocean energy, with 16 possible areas for ocean thermal energy conversion and 18 potential sites for wave power. There are 73710 hectares divided into 910 blocks open for ocean energy development. b. Philippine Energy Use In 2011, the total primary energy supply is 39.4 Million Tons of Oil Equivalent (MTOE), 60% from indigenous or local sources, while 29.30% came from imported oil and 10.40% from imported coal. Of the indigenous sources, 19.60% came from non-renewable sources, with coal having the highest share at 9.2%, then natural gas at 8.30%, and oil at 2.1%. Among the indigenous sources, at 40.7% share, geothermal has the highest share at 21.70% followed by biomass at 12.40%, both renewable sources of energy. 8 (Figure 2) Of the total primary energy supply, the share of total fuel input used for power generation is 52.4% at 20.6 MTOE. The highest fuel input is geothermal at 41.4%, followed by coal at 28.0%, natural gas 15%, hydro at 11.4%, 3.9% both from fuel and diesel oil. Among these 68.1% came from indigenous sources according to DOE. The total electricity generated in 2011 is 69,050 Gwh, 37% from coal, 29.8% from natural gas, 4.8% from oil-based power plants. This means that 71.6% of the total electricity generated came from non- renewable energy sources while 14.4% came from geothermal, 13.7% came from hydro, and .3% from wind, solar, biomass. (Fig 3) The DOE boasts of having a 60% self-sufficiency level in the country's primary energy mix with 40.7% coming from renewable energy in 2011. But according to the presentation of Mr. Serafica of REAP, the self-sufficiency percentage of the country is decreasing from 2009 to 2012. If this trend continues, based on the 57.4% energy self sufficiency levels in 2012, this would be down to 14.5% by 2035. Imported oil is 65.7% and imported coal is 59.3% of the country's primary energy mix. The country's dependence on fossil fuels and imported fuel for the primary energy mix makes the country's energy security vulnerable as it is threatened by global political and economic events, dependent on investments of multi-national oil companies and affected by global supply oil declines making price volatile and susceptible to price hikes. That is why it is imperative for power distributors to maintain a diverse portfolio of power supply contract with different sources and increase the use of indigenous and renewable sources of energy. 9 Of the total primary energy mix, 52.4% is used as fuel for power generation with 68.1% self-sufficiency level. However, of the total electricity generated in 2011, 71.6% came from non-renewable sources, 28.10% came from conventional and large-scale renewable energy projects which are geothermal and large hydro-electric power plants with only .3% coming from wind and solar sources. The trend of the installed capacity in the Philippines is that coal-fired power plants are increasing as well as large hydro-electric dams (Fig 4). The country's increasing use of coal and hydro has environmental implications. In the case of coal-fired plants, this means increase in greenhouse gas emissions which is the major cause of climate change and air pollution. The prominence of large-scale power plants such as hydro electric dams, on top of the large-scale environmental destruction that they cause, result to massive physical, economic and social impacts to communities.
  • 4. Geothermal power plants and natural gas have remained stagnant while new renewable technologies show a very slow increase. The neglect of the development of indigenous and new renewable energy technologies is tantamount to neglect in the electrification of far-flung communities. Small scale renewable energy projects could electrify those not connected to the grid or the 16 M or 17% of the country's population which has no access to electricity in 2012. This trend in RE use is reflective of the global trend. According to the 2013 Global Status Report on Renewables, total renewable power capacity worldwide exceeded 1,470 gigawatts (GW) in 2012, up about 8.5% from 2011. Hydropower rose to an estimated 990 GW, while other renewables grew 21.5% to exceed 480 GW. Wind power accounted for about 39% of renewable power capacity added in 2012, followed by hydropower and solar PV, each accounting for approximately 26%.17. Solar PV capacity become the third largest renewable technology in terms of capacity (but not generation), after hydro and wind. However, fossil fuels and nuclear remain the largest source of electricity in the world. (Fig 4) 10 USAID, in its report asked why is RE not the only form of energy used in the world today, light of the various benefits offered by RE? They stated that the three basic reasons why renewable energy generally has a hard time competing in the market place: a. RE projects tend to have high initial capital costs, making RE unattractive in the short term; b. The market place is often saturated with incumbents that benefit from direct and indirect subsidies, and so is not an “open” market per se; c. The societal costs or externalities that make renewables attractive compared to conventional resources are difficult to quantify and not attempted in most business analyses. When these costs are accounted for (e.g., long-term reduction in costs associated with damage from emissions), RE projects can prove attractive when compared to conventional resources. Of course, the assumption in the USAID report above is that RE could only be pushed and developed using the neo-liberal framework of liberalization, privatization and deregulation and free market to remove the barriers in investments and entry of foreign and private companies in the RE industry as in the case in the Philippines. IV. Philippine policy and program on renewable energy The Department of Energy, under President Aquino, has set high targets to increase the RE-based capacity of the country to an estimated 15,304 MW by the year 2030, almost triple its 2010 level in its National Renewable Energy Program (NREP). 11 As per technology basis, the NREP intends to achieve the following targets: 1. For geothermal, increase capacity by 75.5 % by installing an additional capacity of 1,495.0 MW by 2027 on top of the installed capacity 1,495.0MW of 2010 baseline year, making the total installed capacity 3,461.0 MW by 2030. 2. For hydropower, increase capacity by 160% by installing an additional capacity of 5,394.1MW by 2023 on top of the installed capacity 3,400 MW of 2010 baseline year making the total installed capacity 3,400.0 MW by 2030 3. For wind, attain grid parity with the commissioning of 2345 MW additional capacity by 2015 on top of the installed capacity of 33MW making the total installed capacity 2,378.0MW by 2030. 4. For biomass, deliver additional 277 MW additional capacities by 2022 on top of the installed capacity of 9.0MW making the total installed capacity 315.7MW by 2030 5. For solar, mainstream an additional 284 MW solar power capacities on top of the installed capacity of 1 MW making the total installed capacity 285 MW and pursue the achievement of the 1528 MW aspirational target by 2030. 6. For ocean, develop the 1st ocean energy facility for the country with 70.5MW capacity by 2025. The targeted capacity addition of 9865 MW requires a total investment Php1.2 trillion or USD 26 Million. Php17.2 Billion is already committed by private sector for the development of 124.6 MW and Php 1.15 trillion is still needed for the development of the 9740.7 MW indicative projects. The summary of targets and needed investments are summarized in the table below. (Table 1)
  • 5. Table 1. Summary of NREP goals and estimated investment requirements Sector NREP intends to Installed Capacity (MW) 2010 Total Capacity Addition (MW) 2011-2030 Total Installed Capacity (MW) by 2030 Committed Projects (MW) Estimated Investment Require- ment (MIllion USD) Indicative Projects Estimated Investment Require- ment (MIllion USD) Geothermal Increase geothermal capacity by 75.5 % by 2027 1,966.0 1,495.0 3,461.0 70.0 210.0 1,425.0 4,275.0 Hydro Increase hydropower capacity by 160 % by 2023 3,400.0 5,394.1 8,724.1 27.8 69.5 5,366.3 15,112.8 Wind Attain wind power grid parity with the commissioning of 2345 MW by 2015 33 2,345.0 2,378.0 26.8 102.1 2,345.0 4,690.0 Biomass Deliver additional 277 MW additional capacities by 2022 9.0 276.7 315.7 249.9 622.4 Solar Mainstream and additional 284 MW solar power capacities and pursue the achievement of the 1528 MW aspirational target by 2030 1.0 284.01 285.0 284.0 710.1 Ocean Develop the 1st ocean energy facility for the country by 2025 0 70.5 70.5 70.5 246.8 TOTAL RE 5439 9,865.3 15,304.3 124.6 381.6 9,740.7 25,622.1 TOTAL 16,359 The NREP was formulated in 2010 as prescribed by The Renewable Energy Act of 2008 or R.A. 9513 (RE Act), which was signed into law on December 16, 2008, and gained effectivity on January 2009. The Implementing Rules and Regulation became effective the same year, which is said to accelerate the exploration and development of renewable energy (RE) resources. The law provides for fiscal incentives and policy mechanisms to lure investors into putting up RE projects in the country. The law also mandates the development of a “strategic program” to increase RE usage in the country. Much like the country's overarching energy and power framework, the RE Act provides a framework for private sector to invest in the country, commercialize RE technologies and create markets for RE. Among the incentives for RE participants and developers are seven-year income tax holidays for RE developers, exemption from VAT and duty-free importation of equipment and machinery, reduction of corporate income tax after the expiry of the income tax holiday to 10% of net income as well as a zero percent VAT rate for the sale of power from RE, tax rebate for renewable energy components of equipment, tax credit on domestic capital equipment and services, among other provisions. The policy mechanisms to energy RE development in the country include, renewable portfolio standards, net metering for end users, priority dispatch, and feed-in-tariffs on emerging technologies. Below is the summary of the RE Policy Mechanisms that should have been put into place 1 year after the signing of the law. a. The Renewable Portfolio Standards or RPS, is a market-based policy that requires electricity suppliers to source a certain portion of their supply from RE. While creating a demand for RE, the RPS generates competition among RE developers, thereby, allowing the mandated parties to meet their targets in a least- cost manner. b. Feed-in-tariff system sets a fixed price for electricity sourced from renewable energy for 12 years. This is applied for generation utilized in complying with RPS and for electricity produced from emerging RE resources (wind, solar, ocean, run-of-river hydro and biomass).
  • 6. This mechanism ensures generators priority connection to the grid, priority purchase and transmission of and payment for by grid system operators. c. Renewable Energy Market or REM, where RE power can be traded, purchased or sold, as part of the infrastructure support to facilitate compliance with the RPS mandate. It is envisioned to be a module of, linked to and be a function of the Wholesale Electricity Spot Market (WESM). d. The Green Energy Option, gives consumers the choice to use RE. In essence, the Green Energy Option accelerates the open access concept under the Electric Power Industry Reform Act of 2001 (EPIRA). e. Net Metering arrangement, allows distribution grid users who may produce RE power be appropriately credited with its contribution to the grid. These policy mechanisms and incentives are placed to encourage businesses in RE development and expansion, which is exactly the bottom line of the RE Act. The law and mechanisms were not placed to encourage local development and government support in RE technologies. The law is to serve the most significant concern for investors and businesses, which is whether they will make profit by engaging in the Philippine market. The Philippine government seemed to have failed in promoting investments in RE. In 2012, the Gesellschaft für Internationale Zusammenarbeit (GIZ), assessed the legal framework of 15 developing and emerging countries, including the Philippines, to see if the policies, mechanisms, and strategies have helped in the achievement of the self-set targets of the countries. Among the countries studied, nine out of the 10 common policy mechanisms are included in the Philippine's strategy in achieving RE targets. Based the GIZ's assessment, since major strategic policies have been introduced in 2008, much of the RE targets have not been reached because the government has not implemented the concrete regulatory policies yet. The study also mentioned that even previous targets have not been met such as the period covering 2001 to 2011, within which the government targeted an installed RE capacity of 8.96 GW by 2012 in its ‘New and Renewable Energy Program’. Even with the government's generous incentives for RE promotion, RE policy in the country came in later than the much established overarching law in energy and power. It is within this policy and existing power industry that RE development can be understood. IV. Government's overarching policy on energy and existing power industry a. The Electric Power Industry Reform Act The policy framework on the country's energy resources and power infrastructure has been geared towards privatization even under the administration of President Corazon Aquino. Executive Order 215 in 1987 abolished the monopoly of National Power Corporation (NPC) and gave incentives for private investment in generation – paving the way for liberalization. RA 6957 or the Build-Operate- Transfer (BOT) law, the first in Asia, was passed in 1990 (and subsequently amended and expanded in 1994) which lifted restrictions on the entry of private firms in infrastructure including in power. In 1992, under the Ramos Administration, Republic Act (RA) 7638 or Department of Energy Act of 1992 was passed. The law created the DOE, and declares state policy and objectives for the energy sector. The department "shall prepare, integrate, coordinate, supervise, and control all plans, programs, projects, and activities of the Government relative to energy exploration, development, utilization, distribution, and conservation."
  • 7. Among the powers and functions of the DOE is to "develop and update the existing Philippine energy program which shall provide for an integrated and comprehensive exploration, development, utilization, distribution and conservation of energy resources, with preferential bias for environment-friendly, indigenous, and low-cost sources of energy. The program shall include a policy direction towards the privatization of government agencies related to energy, deregulation of the power and energy industry and reduction of dependency on oil-fired plants." In 2001, the Philippines enacted the Electric Power Industry Reform Act (EPIRA), as a conditionality imposed by the major international creditors which include the Japan Export-Import Bank, Asian Development Bank (ADB), and World Bank (WB) before the release the power reform program loans to finance the country’s power development program. EPIRA provided a framework for the restructuring of the electric power industry, including the complete privatization of the assets of NPC, the transition to competitive structure, the responsibilities of the various government agencies and private entities. In line with the definition of the powers of the government agencies, the EPIRA amended the functions of the DOE and added to its mandate the supervision of the restructuring of the electricity industry. On top of the major scope of EPIRA already mentioned, the President of the Philippines shall reduce the royalties, returns and taxes collected for the exploitation of all indigenous sources of energy, including but not limited to, natural gas and geothermal steam, so as to effect parity of tax treatment with the existing rates for imported coal, crude oil, bunker fuel and other imported fuels. This provides for the equalization of taxes and royalties on the exploitation of natural energy sources which just means their removal. This would make the country's resources free for plunder and profit to all takers which are mostly foreign- owned transnational companies. As to RE developers, project proponents shall have an open access to the industry and could operate on its own pace without having much problems with regards to stringent process of project approval the industry is currently practicing. The burden of obtaining a Power Purchase Agreement will then be relieved from the RE proponents. Those who can deliver the best offer shall have all the advantage of getting into business without being bothered by some regulatory policies and procedures being implemented by government dealing with power negotiations. The EPIRA essentially paved the way for complete privatization, liberalization and deregulation of the country's power industry from the generation, transmission to distribution. The government, through the DOE has been reduced to supervising function and gave up responsibility of providing power to the Filipino to private investors. This kind of power industry structure, as dictated by EPIRA, has resulted to the increase in the ownership of IPPs of the total electricity generation in the country. b. Philippine power industry The country's energy structure, that is dominated by IPPs which are owned by large power players, both local and foreign present an uneven playing field to small RE developers or even new power industry participants. These IPPs own the country's large traditional and RE power plants. In 2008, the year RE Act was enacted, 68% was still generated by NPC-IPPs, NPC-SPUG and NPC, with only 32% generated by IPPs. In 2012, four years after, 79% of the total electricity generated is owned by IPPs, while only 21% was generated with NPC remaining and unprivatized assets. In the Energy Forum Presentation of the DOE in 2012, San Miguel Energy Corporation (SMEC) controlled 20% of the country's installed generating capacity, the Aboitiz Power corporation and First Gas of the Lopezes each controlled 17% of the Philippine Market Share. Other IPPs control 22%. The PSALM or unprivatized assets of the NPC and NPC still controlled the 24% of the total installed capacity. 12
  • 8. This pattern of ownership, where big businesses and foreign partners dominate, is reflected in the country's renewable energy sector. As of 2010, there are 7 geothermal producing fields and power plants in the country, all are owned and operated by the private sector. The Energy Development Corporation (EDC) of the Lopezes is responsible for the development of 1219 MW production fields while Chevron Geothermal Holdings is the steam field developer of 747MW. For the powerplants, the Tiwi and Makban geothermal plants, 693 MW combined installed capacity are owned by the Aboitiz. The Lopezes own the Bacman geothermal plant in Sorsogon as well as all the geothermal power plants in Visayas. Majority of the 40 hydroelectric power plants are also controlled by the top 3 biggest company. The Aboitiz Group control Ambuklao, Binga and Magat hydroelectric power plants, with aggregate capacity of 603MW. First Gen Corporation (First Gen) own the 132 MW Pantabangan-Masiway hydropower plant complex in the province of Nueva Ecija. San Miguel Energy Corporation (SMEC) 45MW San Roque hydropower plant controlled by Strategic Power Development Corporation in Luzon. The prevailing policy and regulatory environment, as dictated by the EPIRA which was enacted 8 years before the RE law prioritized the development of private large-scale conventional and/or RE based electricity generation capacity and energy production facilities. Prevailing policy and regulatory environment inadvertently reduces available opportunities and market potential for small RE systems, particularly for community initiated and managed energy projects. The almost unchanged installed capacity of small renewable energy projects in the country, with coal power plants even gaining an increased share from 21% in 2008 to 32% in 2013 of the country's total installed capacity show that even with the passage of the supposedly ambitious RE Law in 2008, the country's energy pattern remain the same. c. Partnerships with foreign interests The big power players, in partnerships with foreign entities. RE investors in developing countries include governments, banks, equity firms, insurance companies, pension funds, industry bodies, clean energy companies, and start-up project developers. The RE investment functions performed by banks include corporate lending, project finance, mezzanine finance, and refinancing. Debt finance is usually provided by banks, whereas equity finance is often provided by equity, infrastructure and pension funds, either into companies or directly into projects or portfolios of as- sets. Different types of investors will engage depending on the type of business, the stage of technology development, and the degree of associated risk. Since the Philippine governments lack programs to encourage the development of local manufacturing of RE technology components, foreign manufacturers will penetrate the market. The level of involvement among foreign manufacturers is illustrated by the experience of the ATN 30 MW Solar PV Project in the Philippines. So far some 50 foreign PV panel manufacturers have engaged with the project developers, five of whom indicated interest even to provide project financing tied to the PV panel supply. The schematic diagram portrays the current liaison of ATN Solar with foreign suppliers and contractors (Fig 9) 13 V. Conclusion The Power Industry plays a central role in national development. Accordingly, it is the responsibility of the State to provide for an accessible, efficient, reliable, and environmentally sustainable power industry through the maximization of indigenous and renewable sources with the aim of propelling the country towards national industrialization.
  • 9. Much of the problems that we are experiencing are tied to the current energy and power industry framework, policies, programs and projects of the government, as the government has delegated its responsibility to direct a strategic public utility to the private sector and has lost its capacity to direct the nation’s long-term growth. The issue on renewable and indigenous sources of energy in the Philippines is not simply a discourse on which is a better form of energy, traditional or renewable. It is ultimately an issue of who controls these resources and to what end do they serve. Much like the privatization of the country's power generating plants, transmission lines and power infrastructure through the Electric Power Industry Reform Act of 2001 (EPIRA), the country's energy potentials are also up for sale, as the government fully opens the opportunity to explore, exploit and plunder our energy resources to foreign and private investors. The privatization and liberalization of renewable energy resources and development has long term and strategic implications on our national development and will burden the Filipino people with high utility rates and long term energy insecurity. 1 Major primary and secondary energy sources. http://chethoughts.com/?p=637 2 Union of Concerned Scientists. http://www.ucsusa.org/clean_energy/our-energy-choices/renewable- energy/public-benefits-of-renewable.html 3 http://www.conserve-energy-future.com/advantages-and-disadvantages-of-renewable-energy.php 4 http://www.fao.org/docrep/005/y3994e/y3994e0i.htm 5 United States Agency for International Development (USAID). Encouraging Renewable Energy Development: A handbook for international regulators. January 2011. www.naruc.org/international 6 As stated by Vicky Lopez of SIBAT at the RTD hosted by Agham on RE, 2014. 7 NREB, 8 Philippine Energy Plan 2012-2030. Department of Energy. https://www.doe.gov.ph/doe_files/pdf/Researchers_Downloable_Files/EnergyPresentation/PEP_2012- 2030_Presentation_(Sec_Petilla).pdf 9 NSCB. Jose Ramon G. Albert,What Drives Electricity Rates to Go Up, Up and Away? 27 September 2013. http://www.nscb.gov.ph/sexystats/2013/SS20130927_electricity.asp#tab4 10 REN21. 2013. Renewables 2013 Global Status Report 11 https://www.doe.gov.ph/microsites/nrep/index.php?opt=nrepbook 12 http://www.kpmg.com/global/en/issuesandinsights/articlespublications/documents/energy-report- philippines.pdf 13 International Renewable Energy Agency (IRENA). Financial Mechanisms and Investment Frameworks for Renewables in Developing Countries. December 2012