Developers asked to invest $25B in renewable energy

The government is calling green developers to invest about $25 billion (roughly more than P1 trillion) over the next 17 years to triple the country’s renewable energy capacity.

The Department of Energy (DOE) plans to ramp up renewable energy development in the country which has been hobbled by various oppositions and uncertain policy mechanisms in the past.

“We are 84 percent dependent on fossil fuels in terms of power generation and yet 10 percent of our population does not have access to power as of the moment,” said Marissa P. Cerezo, assistant director of the DOE’s renewable energy management bureau.

“Energy self-reliance is a goal of every country, and with the huge amount of energy resources in the country, I think these resources would play a major role in displacing fossil fuels and eventually attaining our goal of being self-sufficient,” she added.

The energy department is eyeing to triple the country’s 2011 renewable energy capacity of 5,400 megawatts (MW) to 15,400 MW by 2030.

According to Cerezo, the average investment needed for the construction of a renewable energy project in the country currently stands at $2.5 million per MW.

With the government’s target of adding some 10,000 MW of renewable energy generation over the next 17 years, the private sector would have to pour in about $25 billion in fresh investments to make the DOE’s plan achievable.

Cerezo said that by 2020, the country’s renewable energy capacity should have already reached the 10,000-MW mark more or less.

The energy official further said that the DOE is optimistic that the said target will be attained by 2030.

For one, she said that the feed-in-tariff (FIT) mechanism has already been put in place to encourage renewable energy development in the country.
The FIT promotes investment in renewable energy by the government offering long-term contracts to producers. The goal of feed-in tariffs is to offer cost-based compensation to renewable energy producers, providing the price certainty and long-term contracts that help finance renewable energy investment.

“We are confident because we have plenty of renewable energy resources and there are a lot of interested developers,” Cerezo stated.

However, a recent joint study conducted by the World Wide Fund for Nature (WWF) and the World Resources Institute (WRI) pointed out that the government would have to go beyond “targets and plans” if it wants to ramp up renewable energy development in the country.

The study revealed that the Philippines is lacking the push for its renewable energy plans, thus it remains lagging behind in terms of renewable energy implementation worldwide.

Cerezo, for her part, admitted that there are indeed numerous challenges which the DOE is facing in its move to boost renewable energy development in the country.

Among these hurdles, she said, include the perception of unrealistically high cost of renewable energy, complexities on obtaining permits, lack of trust from banks that would support renewable energy projects, and uncertainty of grid access.

“To address these challenges, we need to intensify information drive for renewable energy promotion and we need cooperation and assistance of the academe and our affiliated renewable energy centers all over the country. We have to continue enhancing our coordination with other government entities as well,” Cerezo said.

source:  Malaya