Renewable Energy Sector Booming in Philippines

Optimistic reports about the Philippines’ potential as a major centre for investment in the renewable energy sector are emerging. Renewable energy promises to be a driving force for the Philippines’ economic and social development. Organisations such as Winrock have been running community development programmes for years, many of which have centred on harnessing this renewable energy’s potential to benefit the community. Now, an increasing number of heavy weight investors are moving in with a view to reap the returns on renewable energy investments.

In 2005, the Australian Business Council for sustainable energy publish a report which indicated western nations’ interest in energy in the region. The report gives an overview of the Philippines Energy Plan (PEP) from 2004-2013, part of which is focused on renewable energy. The report went into some detail about the Philippines’ potential for the development of renewable energy, especially harnessing biomass, solar, wind and geothermal. The PEP also details other major sources of energy that are mentioned are a number of off shore oil fields in the region which are drilled by Nido Petroleum Limited- another Australian concern.

The Philippine government has shown it commitment to renewable energy by passing a series of significant laws concerning hydro-electric power and other renewable energy projects. Making grants available of up to P750 million in financing for independent energy producing projects using solar, wind, biomass and small hydro resources. At the same time however, it is reported that domestic banks have not shown support for such investments, so far.

The government’s 2005 target was to reach 300MW of capacity from renewable sources, with up to 50 MW installed annually from 2005-2011. More recently, in December 2008, these targets have been updated when the government made a landmark move by signing the Renewable Energy Act (RE Act). The Philippine president furthered demonstrated the country’s commitment to developing renewable energy (RE) in its objective to utilise sustainable energy practices. Following this move the Philippine government’s goal is to boost the country’s energy self-sufficiency from 56.6 percent in 2005 to the desired level of 60 percent by 2010.

Now two of the Philippines’ leading trading partners, British Ambassador Stephen Lillie and Dr. Walter Salzer, of the German Technical Cooperation (GTZ), have jointly expressed wishes that the country would be a major destination for renewable energy investments. Believing that the Philippines would become one of the leading consumers of alternative and renewable energy sources British and German investors . Considering the Philippines is blessed with rich renewable energy resources including robust wind energy sites, ideal solar conditions, and an abundance of hydro and biomass resource – most of which is left untapped. “The Philippines could be the ‘Saudi Arabia of Biomass.’ It has got the right conditions in place,” Stephen Lillie commented .

The UK is the top contributor to the Philippines’ foreign direct investments, placing $298.17 million in 2008 by acquiring long-term stakes in local companies. This accounts for about 40% of the foreign investment that the Philippines receives with major investments concentrated in power, energy, water, mining and financial services.

A multitude of successes have been seen by foreign-invested renewable energy companies in the Philippines. A British company is eyeing a methane power plant in the former landfill in Montalban, Rizal, Lillie said. While British investors are enthusiastic about the Philippines’ renewable energy prospects. Another British company Bronze Oak established San Carlos Bioenergy in 2007. It is expected to supply 100,000 liters of ethanol which is utilised to produce electricity. The facility generates nine megawatts (mW) plus another five mW for export to the grid.

Purely locally-owned companies are also making great gains, such as the controversial Hedcor Inc, which is a wholly owned subsidiary of aboitiz, a Filipino-owned management and investment company. Hedcor Inc is the country’s leading hydro-power developer. While the Energy Development Corporation (EDC), a company established in 1976 under the Philippine National Oil Company (PNOC), focuses on geothermal energy where it is a pioneer in the industry reporting an annual turnover of PHP2,267.7 million (roughly 48 million USD).

Originally posted by James Westwood on http://bambooleaf.org