The Philippine government highlights the importance of finding and investing in renewable energy to respond to the challenges of climate change, energy security and local air pollution—whether it be wind, solar, biomass, biofuels, geothermal or hydropower. An underlying question is, how much more will Filipinos be willing to pay to shift the Philippine energy mix to green and lean?

Renewable energy—power generated from the nearly infinite elements of nature such as sunshine, wind, the movement of water, the internal heat of the Earth, and the combustion of replenishable crops—is widely popular because it is thought to be an inexhaustible and environmentally benign source of power, particularly compared with the supposedly finite and environmentally problematic alternative of reliance on fossil fuels and nuclear power.

Renewable energy could play a much larger role in the Philippines’ energy security and insurance against price fluctuations—but it won’t come cheap, according to Department of Energy Assistant Secretary Mario Marasigan.

“In financing renewable-energy, perceived investment risks are still an issue. But the government is aggressively developing renewable-energy potential,” Marasigan earlier told journalists during the clean-energy media workshop coorganized by the US Agency for International Development (USAID) ECO-Asia and Internews Earth Journalism Network.

He acknowledged that the country is blessed with rich renewable-energy resources, including robust wind-energy sites, ideal solar conditions and an abundance of hydro and biomass resource.
The region is proclaimed as holding the largest market for geothermal power in Asia and the world’s second-largest market next to the United States, according to Marasigan.
“We cannot do away with clean coal yet. But the bottom line is that renewable-energy advantages are just too great for us to pass up,” he added.

A push for green sources of power

In December 2008, President Arroyo signed the Renewable Energy Act, demonstrating the country’s commitment to developing renewable energy in its objective to utilize sustainable energy practices. The Act seeks to make the country 60-percent energy-sufficient by 2010 and to mitigate problems caused by climate change.

The Act is said to be the most comprehensive renewable-energy legislation in Southeast Asia and would enable the Philippines to capture part of $71-billion investments in renewable-energy development worldwide.
Under the Department of Energy’s medium-term Renewable Energy Policy Framework, the government aims to develop more than 10,835 megawatts (MW) of renewable-energy capacity from geothermal, hydro, wind, solar, biomass and ocean sources by 2030.

Marasigan explained that the legislation aims to accelerate the development and use of the country’s vast renewable-energy resources through fiscal and nonfiscal incentives for investors.
It also assures investors in wind, solar, ocean, run-of-river hydropower and biomass a secure market in electricity generated from these clean sources through feed-in tariffs.

But according to the Philippine Energy Plan, which aims to reduce coal imports by 20 percent and encourage local production, projects coal demand to grow from 12.2 million metric tons (MT) in 2008 to around 15.28 million MT in 2014, of which 13.06 million MT are for power generation and 2.22 million MT are for industries.

“Coal is likely to remain the fuel of choice for the next 15 to 20 years for power generation in Asia, including the Philippines, due mainly to its abundance and relatively lower price as compared to other fuel types,” said Peter du Pont, chief of party of the ECO-Asia Clean Development and Climate Program.

Du Pont explained that in Asia, the share of primary energy from coal has risen from 43 percent in 1980, to 48 percent in 2005, and is projected to reach 51 percent in 2030.

Even with major expansion, current estimates project renewables to account for 5 to 10 percent of future energy needs by 2030, du Pont added.

He added that among the opportunities where renewable energy comes in is that huge investments are needed in energy- supply infrastructure in Asia’s developing economies with $6.3 trillion from 2005 to 2030, or an average investment of $25 billion per year.

Business sees big opportunities in renewable

Renewable-energy advantages will become more and more evident in years to come.
The UK-based renewable-energy company Global Green Power Plc. (GGPPC), for instance, is spending billions of dollars in setting up biomass power plants in the country.

Biomass is a renewable-energy source that uses agricultural waste to produce electricity.
According to David de Montaigne, GGPPC founder and president, the company’s decision to invest heavily in the Philippines is due to its support to the renewable-energy projects of the government, as well as helping the farming communities in the provinces where biomass plants are operating or being built.

“We don’t have any problem dealing with the Philippine government on investing biomass plants, so we are also aggressively promoting the use of renewables, especially in the remote villages,” de Montaigne said.

The projects are being undertaken by subsidiaries Green Power Panay Philippines (two units of 17.5 MW), Green Power Nueva Ecija (17.5 MW), Green Power Pangasinan Philippines (35MW) and Green Power Bukidnon (35 MW). Each 17.5- MW project is estimated to cost P2.3 billion.

In December last year, a $75- million biomass power plant was launched by ASEA One, the project developer. It launched the project with the mentoring and facilitation of the USAID-supported Private Financing Advisory Network. The plant aims to bring clean energy and improved livelihoods to the Western Visayas region.

Early this year, the Department of Energy also awarded 68 mini-hydroelectric, five geothermal and 17 wind-energy projects with total estimated investment of $1 billion with both local and foreign investors.

“Countries in Asia, not only the Philippines, have to switch to a more secure, lower-carbon energy system that does not undermine economic and social development. We also have to overcome barriers to harvest the full potential of renewable energies,” said Heherson Alvarez, vice chairman of the National Commission on Climate Change.

Alvarez explained that these barriers include low public awareness, ineffective political frameworks and governments continuing to subsidize conventional energy sources.