MINI-HYDROPOWER projects must have priority in terms of investment support to meet the country’s need for clean power, according to Repower Energy Development Corp. (REDC).
“We believe that there is a need to give greater importance and priority to small-scale hydropower projects. Energy producers share a common commitment to the potential and the need for rapid growth in the development of clean, efficient, and low-risk energy solutions,” Victor Lee, chief financial officer of REDC said.
The statement comes on the heels of plans by the Department of Energy (DOE) plan to legislate a fuel mix-policy and set aside current incentives in favor of the development of renewable energy source under Republic Act (RA) 9513 or the Renewable Energy Act of 2008.
Because the Philippines is blessed with water resources, Lee said Filipinos should maximize and invest in renewables since there is a sustainable and long-term development potential in mini-hydropower projects.
“With today’s improvements in technology, we can easily foresee turbines lasting for 100 years,” said Lee, noting the long-term asset life of hydropower technology.
Financing mini-hydropower projects normally entails 70 to 80 percent debt and 20-30 percent equity. There is also project financing available through government-owned and -controlled banks, with a grace period on principal repayments during the construction stage.
REDC, a subsidiary of Pure Energy Holdings Corporation, has broken ground for three mini-hydropower projects, one of which is the oldest operating facility of the Philippine Power & Development Company (Philpodeco) that started in 1927.
“Our run-of-river mini-hydro development projects… have service contracts with the DOE for 25 years, which may be extended for another 25 years. This could potentially last for 50 years which is . . . attractive for investment,” Lee noted.
The incentive scheme for the sector involves single-window clearances for sites, clearing, survey, and due diligence.
However, Lee noted the development of small hydropower infrastructure has been less than satisfactory. There’s a need to hasten the development of untapped potential for the power infrastructure to meet the demand and to create a balance between clean energy and fossil fuel power plants.
“Our small-scale infrastructure investment in the country is not enough. REDC has strong project management, engineering, and construction capabilities and we can deploy capital rapidly to deliver high-quality mini-hydro assets to support the sustainable development of the country. We’re ready to provide this technology to the public,” said Lee.
Some sectors are getting interested in investment in small hydropower due to the feed-in tariff (FIT) system and the government’s desire to cultivate its renewable sector and achieve its commitment in the 2015 United Nations Climate Change Conference or COP21, Lee added.