$850-M projects waiting for RE bill

$850-M projects waiting for RE bill
By Katherine Adraneda , Philippine Star
Tuesday, July 29, 2008

Some $850-million investments in renewable energy (RE) projects in the country are waiting in the wings, as investors appear to be in a wait-and-see attitude towards the passage of the RE Bill, which is said to be languishing in Congress in the past 19 years.

Former Department of Energy (DOE) chief and current chairman of World Wide Fund for Nature-Philippines (WWF) Vincent Perez Jr. said that such amount of investments on RE projects in the country is foreseen to possibly even double if only lawmakers would approve the proposed measure and President Arroyo would sign it into law immediately.

In an interview at the sidelines of the seminar on RE held over the weekend at Tagaytay City, Perez said these pending investments on RE projects in the Philippines might push between now and 2011.

“These investments are in anticipation of the (passage) of the RE Bill. These projects could perhaps be made in the next five years,” Perez said.

The US Embassy in Manila sponsored the 2008 Tagaytay seminar dubbed “Renewables: Energy for the 21st Century” wherein Perez was the keynote speaker.

Perez told reporters that the $850-million pending investments on RE projects involved the tapping of the country’s geothermal and wind resources.

Perez said the proposed geothermal energy proj-ects consist of a 20 megawatt (MW)-project in Nasulo, Dumaguete; 50MW in South Cotabato; 50MW in the Bicol area; 20MW in Mabini, Batangas; 40MW in Compostela Valley; and 40MW-project in Biliran.

On wind energy projects, Perez said proposed plans include the 80MW and 40MW projects in Ilocos Norte.

Perez explained that estimates on the cost of these proposed RE projects were derived by multiplying the expected power output of the facility by $2.5 million, said to be the prevailing approximation of the price per MW.

Meanwhile, Perez said that a 10MW solar energy project in Mindanao, worth $50 million is also pending, in anticipation of the passage of the RE Bill.

During his speech at the seminar, Perez cited his study titled “A Business Case for Investing in Renewable Power in Emerging Countries,” which has noted that the Philippines is “well-suited to renewable energy.”

Perez said that his study was a result of his “one-year of doodling” at Yale University after leaving the Arroyo Cabinet years ago. His case study was made in May 2006.

“The key factors for RE growth in the country are, of course, first, is RE resources, then RE policy support, attractive tariffs, tight local supply, and isolated grids, which should push us to really become self-sufficient,” pointed out Perez, even stressing that government policy-support on RE is pivotal to the shift and promotion on the use of RE sources.

According to Perez, the “time is ripe” for RE in the Philippines.

This is because RE could insulate the country’s economy from fuel price fluctuation, as RE could also accelerate electrification in off-grid areas, promote sustainable growth, and improve the country’s energy security.

Quoting DOE data on the Philippines’ energy mix in 2007, Perez said that the country has already become 57.2 percent energy self-sufficient as of end 2007, with geothermal as the biggest indigenous energy source, accounting for 21.5 percent.

Perez credited the introduction of the Malampaya Natural Gas Project, located off Palawan, for the increased energy self-sufficiency of the country last year.

Natural Gas accounted for 4.5 percent in the 2007 Philippine Energy Mix.

However, Perez said that the country remains “largely dependent” on imported oil as well as imported coal, which accounted for the 31.8 percent and 11 percent, respectively, of the country’s energy mix last year.

Natural gas and coal are dominant fuel sources for power generation in the country, with 60 percent.

Perez added that renewables contribute 31 percent and oil nine percent to the power generation of the Philippines.

But Perez emphasized that the Philippines is the second largest producer of geothermal energy in the world, “very closely” next to the United States.

Perez also asserted that the Philippines has a great chance of even becoming the top geothermal energy producer in the world in a decade, if only appropriate technology and government support are achieved.

Perez said that the pending RE Bill in Congress is expected to accelerate growth in the RE field in the country, especially since an additional capacity requirement of 3, 620MW is being anticipated for the entire Philippines by 2014.

Specifically, the additional capacity required by 2014 consist of 1, 950MW for Luzon; 820MW for Visayas; and 850MW for Mindanao.