17 AUGUST 2012
Power and Renewable Energy in the Philippines
The Philippines is the second largest geothermal power producer in the world, has the highest wind power potential in the region, large potential for solar power, and abundant hydropower and biomass resources.
The Philippines poses a great demand for power. To address this, the government is keen to seek and develop the country’s vast energy resources especially the potential of renewable energy.
According to the Philippines Department of Energy’s (DOE) 2009 – 2030 Power Development Plan, the demand for electricity is forecasted to grow at an annual average rate of 4% - 5% across the country’s major island groups. The country’s peak demand is projected to reach from 9,226 MW in 2008 to 14,311 MW by 2018, to about 24,534 MW by 2030.
For the 2009-2030, around 17 GW of new capacities are needed to meet the country’s demand and reserve requirements for electrical power. There are currently 1,338 MW worth of committed power projects in the pipeline until 2014.
Latest available data in 2010 show the country’s installed capacity totalled 15,896 MW. Coal-fired power plants remain the dominant source with a 28% share, closely followed by hydro, natural gas, oil and other fuels such as geothermal and new renewable energy. Among the new renewable energy sources include the 1 MW Methane Land Fill Gas in Luzon, the 21 MW First Farmers Biomass Cogeneration and the 8.3 MW San Carlos Bioenergy plants in Visayas.
The Philippine Department of Energy (DOE) is targeting the installation of an additional 1,200 MW of geothermal capacity by 2013, which will add 60% to the current level of 1,978 MW.
Wind power potential capacity is 7,404 MW in 1,038 wind sites throughout the country. To date, the existing wind capacity is 33 MW. One milestone in 2006 was the inauguration of the 25MW Northwind Power Project in Bangui Bay, Ilocos Norte, which is the largest wind energy facility in Southeast Asia.
The Philippines has an annual solar energy potential average of 5.0-5.1 kWh/m2/day. At present, over 500 solar systems have been installed, in the form of solar photovoltaic (PV) systems, solar water heaters, and solar dryer systems. Solar power is being tapped for various rural electrification projects and is ideal for centralised and off-grid applications.
The Philippines has an estimated untapped hydro potential of 13,097 MW. At present, the country’s cumulative installed hydropower capacity is 3,333 MW or 20% of total capacity. The DOE’s goal is to increase the overall available hydropower capacity to 5,468 MW through the development of large and mini-hydropower plants.
The country generates substantial volumes of agricultural residues, primarily from sugar and rice industries, which can be utilised as biomass fuel. Studies indicate that wastes from the sugar industry have a potential of generating 540 MW while those from the rice industry is estimated at 380 MW.
Transmission and Distribution System
The National Grid Corporation of the Philippines (NGCP) was incorporated in 2008 and was awarded the 50-year franchise to operate and maintain the Philippines’ transmission system. It manages 19,425 circuit kilometres (ckt-km) of transmission lines, and a total of 23,853 MVA (million volt-amperes) in substation capacity. Most is installed in Luzon, the Philippines’ main island group. These figures exclude the transmission lines and transformer assets, which have already been decommissioned.
The NGCP transmits power to 117 distribution utilities and over 100 industrial consumers.
The Renewable Energy Bill (Republic Act No 9513), signed into law last December 2008, is expected to facilitate the development and utilisation of renewable energy systems through the various market and fiscal incentives such as income tax holidays, tax exemptions on carbon credits, and exemption of power generation from value added tax.
It has a provision for a net metering scheme that will allow consumers the option to generate their own power and transfer excess power to the grid, as well as a feed-in-tariff that will provide a guaranteed fixed price for at least 12 years for electricity produced from emerging renewable resources (wind, solar, ocean, run-of-river hydro and biomass).
Opportunities for UK companies in the power and renewable energy sectors, amongst others, could be as follows:
Services for the refurbishment, rehabilitation and upgrade of old NPC owned coal, geothermal, hydro, diesel and bunker facilities being privatised;
Partnership with other local investors in the privatisation of the state-owned power generation facilities;
Investment in new power plants to be put up;
Services to new investors in planning for new power plants;
Supply of new equipment for the refurbishment and upgrade of privatised generating facilities;
Technology and services for the development of new & renewable energy projects;
Services for developing CDM projects;
Technology partners for energy service companies;
Supply of energy saving devices;
Technology and consulting services for the commercial operation of the Wholesale Electricity Spot Market and Retail Competition.
Getting into the market
Doing business in the Philippines is highly relational. Although it is generally modelled on the US business culture, a formal introduction by a trusted third party is almost always the best way to enter the market.
Appointments are required and should be made at least two weeks in advance.
English is the language of business.
The Philippine government encourages inbound foreign investment and a wide range of incentives are readily available
Read article source in UK Trade & Investment