DESPITE government efforts to strengthen the Philippines’ renewable energy (RE) portfolio, clean energy sources still lag far behind fossil fuels in the capacity mix, indicating that there is still a lot of room for growth for investment in this sector.
The latest Department of Energy (DOE) data show that the Philippines is still heavily dependent on coal, oil, and gas for its electricity needs, with non-RE resources comprising 67.10 percent of the country’s capacity mix while RE accounts for only 32.9 percent.
RE resources include biomass, solar, wind, geothermal, hydro and ocean.
Among RE resources, hydro power remains attractive to investors, topping the list with 3,543 megawatts (MW) of installed capacity or 19.75 percent of the energy mix.
Geothermal comes second with 1,918 MW of installed capacity or 10.69 percent of the mix; followed by wind with 283 MW (1.58 percent); biomass with 131 MW (0.75 percent); and solar with 23 MW (0.13 percent).
For non-RE resources, coal-fired power plants are on top of the list with 5,708 MW of installed capacity or 31.81 percent of the mix. In fact, 70 percent of the committed power expected to come online until 2019 are coal-fired power plants.
Oil-based power plants came in second in with installed capacity of 3,476 MW or 19.37 percent of the mix, followed by natural gas with 2,862 MW or 15.95 percent.
The government has been pushing for the exploration, development, utilization and commercialization of renewable energy resources in the country with the enactment of Renewable Energy Act of 2008 (Republic Act No. 9513).
The law prioritizes connections to the grid for electricity generated from emerging renewable energy resources, and the purchase and transmission of and payment for such electricity by grid system operators.
To spur renewable energy resources, the government is also giving incentives, through the Feed-in Tariff (FIT) system, to investors who will develop RE power sources.
The FIT system, which is mandated for wind, solar, ocean, run-of-river hydropower, and biomass energy resources, is meant to accelerate the development of emerging RE resources through a fixed tariff mechanism.
The DOE is also preparing for the next round of FIT quota to encourage more companies to go into the development of RE projects.
To encourage the adoption of RE technologies, the Department of Finance is also mandated by law to provide rebates for all or part of the tax paid for the purchase of RE equipment for residential, industrial, or community use.
Various government financial institutions are also mandated to provide preferential financial packages for the development, utilization, and commercialization of RE projects that are duly recommended and endorsed by the DOE.
Alarmed by the slow growth of the country’s RE portfolio, the DOE wants to increase the RE share in the fuel mix to 30 percent from the current 23 percent.