Renewable Energy in the Philippines: A Developers Perspective

Transcription

1 Renewable Energy in the Philippines: A Developers Perspective Rosario B. Venturina Vice President, WEDAP ROK-PH Partnership: Exploring Cooperation in Renewable Energy June 27, 2013 Intercontinental Hotel, Makati City

2 Membership of WEDAP Alternergy Philippine Holdings Corp. Constellation Energy Corporation Energy Development Corporation Energy Logics Philippines, Inc. First Maxpower International Corp. Northwind Power Development Corporation PetroEnergy Resources Corporation PhilCarbon, Inc. Philippine Hybrid Energy Systems, Inc. Trans-Asia Renewable Energy Corporation Northern Luzon UPC Asia Corporation NREB Technical Working Group

3 Presentation Outline Some Background Information What Went Before? What Will Soon Come? Opportunities Continuing Challenges Moving Forward NREB Technical Working Group

4 Some Background Information Growth Rate of Economy GDP Growth Rate % % % %* 1st Quarter 7.8% %* *NEDA Projection

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7 The National Renewable Energy Plan (NREP) Consolidated Roadmap NREB Technical Working Group

8 The National Renewable Energy Plan (NREP) RE-Based Capacity Installation Targets NREB Technical Working Group

9 What Went Before?

10 RA 9513: Renewable Energy Act of 2008 Declaration of Policies: 1. Accelerate the exploration and development of renewable energy resources such as but not limited to, biomass, solar, wind, hydro, geothermal and ocean energy sources, including hybrid systems, to achieve energy self-reliance through the adoption of sustainable energy development strategies to reduce the country s dependence on fossil fuels and thereby minimize the country s exposure to price fluctuations in the international markets; 1. Increase the utilization of renewable energy by institutionalizing the development of national and local capabilities in the use of RE systems, and promoting its efficient and cost-effective commercial applications by providing fiscal and non-fiscal incentives;

11 RA 9513: Renewable Energy Act of 2008 Declaration of Policies (continued): 1. Encourage the development and utilization of RE resources as tools to effectively prevent or reduce harmful emissions and thereby balance the goals of economic growth and development with protection of health and the environment; and 1. Establish the necessary infrastructures and mechanisms to carryout the mandates specified in this Act and other existing laws.

12 What Went Before? Approved FIT and Installation Targets WHEREAS, on 27 July 2012, ERC issued Resolution No.10, Series of 2012 approving the FIT rates and equivalent degression rates for all RE technologies entitled to FITs except Ocean, which in relation to the approved installation targets, are as follows: RE Technology FIT Rate (Php/kWh) Degression Rate Installation Target (MW) Wind % after 2 years from effectivity of FIT 200 Biomass % after 2 years from effectivity of FIT 250 Solar % after 1 year from effectivity of FIT 50 Run-of-River Hydropower % after 2 years from effectivity of FIT 250

13 What Went Before? Confirmation of Commerciality Projects that have complied with the requirements for conversion from Pre- Development to Development Stage under the FIT System shall be issued a Certificate of Confirmation of Commerciality which shall serve as notice to proceed to the construction phase under the Development Stage.

14 List of Required Documents for COC Service Contract Declaration of Commerciality Detailed Feasibility Study Engineering Design LGU Endorsement Proof of exclusivity of land surface rights (for private land) Environmental Compliance Certificate NCIP-Certificate of Non-overlap BOI RE Certificate Final Grid Impact Study Final Facility Study O&M Contract Proof of negotiation for Connection Agreement with NGCP

15 List of Required Documents for COC Transmission Line Right of Way Final Area for development (Blocking Map) 5-year Work and Financial Plan Notarized proof/declaration that project is not bound under any bilateral EPC Contract Proof of ownership of equipment and materials Latest audited/unaudited Financial Statements Project Cash Flow Statement Letter of Undertakings (Equity Portion) Proof of negotiation for Financial Closure/appropriate bank certifications Proof of negotiation for Performance Bond (to be submitted to DOE within 60 days upon approval of conversion

16 Confirmation of Commerciality

17 Confirmed DOCs DOE Confirmed DOCs DOE Monitoring Board (as of June 21,2013) NREB Technical Working Group

18 DOE Monitoring Board (WIND) Company Name EDC Burgos Wind Power Corporation Alternergy Wind One Corporation PetroGreen Energy Corporation Trans-Asia Renewable Energy Corporation Project Name Burgos Wind Power Project Tanay-Pililla Wind Power Project Nabas Wind Power Project San Lorenzo Wind Power Project Region I IV-A VI VI Province Ilocos Norte Laguna Aklan Guimaras City/Municipality Saoit-Nagsurot-Burgos Tanay-Pililla, Mabitac-Rizal Nabas-Buruanga-Malay San Lorenzo Contract No. WESC No WESC No WESC No WESC No Declared Capacity (MW) Date of Conversion 05/16/13 05/16/13 05/31/13 05/16/13 Project Progress as Per Workplan in (%) Pre-construction % Pre-construction % Pre-construction % Pre-construction % Construction % Construction % Construction % Construction % Interconnection % Interconnection % Interconnection % Interconnection % Commissioning Date State of Commercial Operation Approved FIT Capacity (MW)

19 DOE Monitoring Board (SOLAR) Company Name Project Name Region Phil. Solar Farm-Leyte, Inc. Leyte Solar Power Project VII Province Leyte City/Municipality Ormoc Contract No. SESC No Declared Capacity (MW) 30 Date of Conversion 05/31/13 Project Progress as Per Workplan in (%) Commissioning Date State of Commercial Operation Pre-construction % Construction % Interconnection % Approved FIT Capacity (MW)

20 DOE Monitoring Board (HYDRO) Company Name Project Name Oriental Energy and Power Generation Corp. Timbaban Hydroelectric Power Project Oriental Energy and Power Generation Corp. Culaman Hydroelectric Power Project Region VI X Province Aklan Bukidnon City/Municipality Madalag Manolo Contract No. HSC No HSC No Declared Capacity (MW) Date of Conversion 05/28/13 06/03/13 Project Progress as Per Workplan in (%) Commissioning Date State of Commercial Operation Approved FIT Capacity (MW) Pre-construction % Construction % Interconnection % Pre-construction % Construction % Interconnection %

21 First Come First Served Policy DOE FIT PROCESS

22 First Come First Served Policy DOE FIT PROCESS DONE DONE DONE A

23 First Come First Served Policy DOE FIT PROCESS A

24 What Will Soon Come? Green Energy Option A program which provides end-users the option to choose RE resources as their sources of energy. Status of Green Energy Option Description Agency Target Date 1. IRR promulgation, public consultation DOE in consultation with NREB Guidelines are ready for public consultation 2. Regulatory Framework ERC 3. Mechanisms for physical connections and commercial arrangements Transco (SII), PEMC and other relevant parties 4. Effectivity To be synchronized with Open Access

25 What Will Soon Come? Net metering A consumer-based renewable energy incentive scheme wherein electric power generated by an end-user from an eligible on-site RE generating facility and delivered to the local distribution grid may be used to offset electric energy provided by the DU to the end-user during the applicable period.

26 What Will Soon Come? Status of Net Metering Description Agency Target Date 1. Interconnection standards ERC in consultation with NREB 2. Pricing methodology & other commercial arrangements 3. Mechanisms for physical connections and commercial arrangements ERC in consultation with NREB DOE, ERC, Transco (SII), DUs, PEMC and other relevant parties NREB submitted to ERC in May 2012; Public consultations conducted Done. Interim Pricing set at grid rates Done 4. Approval ERC June Effectivity 3rd Quarter, 2013

27 What Will Soon Come? Payment and Collection Guidelines These Guidelines implement the ERC s mandate under the RE Law to provide direction to and support for emerging renewable energy ( RE ) technologies and the ERC s role in crafting the necessary mechanisms to establish the FIT system Status of Payment and Collection Guidelines Description Agency Target Date 1. Finalization of the Guidelines NREB - ERC In progress 2. Approval ERC in consultation with NREB July Effectivity 3rd Quarter, 2013

28 Payment and Collection Guidelines/REPA

29 What Will Soon Come? Renewable Portfolio Standards All Stakeholders in the electric power industry shall contribute to the renewable energy industry of the country by having a minimum percentage of its generation from eligible renewable energy sources. Status of Renewable Portfolio Standards Description Agency Target Date 1. Rules promulgation, public consultation, submission to DOE Secretary DOE REMB, Planning Bureau, Power Bureau Completed in November Approval by Secretary of DOE Secretary 2nd Quarter 2013? 3. Determination on minimum % to be imposed on mandated sectors NREB 3rd Quarter, 2013? 4. Approval of RPS % NREB 3rd Quarter, 2013? 5. Effectivity 15 days after publication

30 Opportunities Vast RE Potential Geothermal > 4,000 MW Wind > 76,600 MW (revised estimate ~ 20,000MW?) Hydro > 10,000 MW Solar > 5 kwh/m 2 /day Ocean > 170,000 MW Biomass > 500 MW (Bagasse and rice hulls only; does not include CHP, co-firing, other agricultural and forestry waste, tree farms, etc.) Source: Renewable Energy Management Bureau, DOE

31 Opportunities A Significant RE Producer World s 2 nd largest producer of geothermal energy at 2,000 MW (USA 1 st ) Largest wind power producer in Southeast Asia at 33 MW Installed hydropower generation capacity over 3,300 MW Host to the following: First Solar wafer fabrication plant in Southeast Asia Sunpower First continuous biodiesel plant in Southeast Asia First sugarcane-based ethanol and cogeneration plant in Southeast Asia First solar farm 1 MW in Southeast Asia Source: Renewable Energy Management Bureau, DOE

32 Opportunities Fiscal and Non-fiscal Incentives Incentives RE Developers RE Commercialization 7-Year Income Tax Holiday Duty-free Importation VAT-free Importation No. Tax Credit Special Realty Tax Rate <= 1.5 % Net Operating Loss Carryover 10% Corporate Tax Rate after ITH Accelerated Depreciation Zero Percent VAT on RE Sales & Purchases Cash Incentive = 50% of UC for Missionary Electrification Tax Exemption on Carbon Credits Tax Credit on Domestic Capital Equipment & Services

33 Opportunities Fiscal and Non-fiscal Incentives Incentives Renewable Portfolio Standards Feed-In Tariff on Emerging Technologies Renewable Energy Market & Certificates Green Energy Options Net Metering RE Developers Electricity Suppliers End users Government waives share of proceeds on RE micro-scale Projects <= 100 kw Exemption from Universal Charge Payment of Transmission & Wheeling Charge = Average kwh rate Tax Rebate for RE Components Financial Assistance Program Incentives for Host Communities

34 Continuing Challenges Strong resistance to higher electricity prices Higher RE deployment wrongly perceived as increasing electricity rates Long, litigious and bureaucratic process to implement RE policies and mechanisms Pre-development activities and project studies take a long time due to lack of readily available and reliable information Higher capital costs versus other countries Higher interest rates compared to other countries

35 Continuing Challenges Longer construction period due to lack of facilities, equipment and skilled workers The final guidelines for the FIT payment and collection, RE Payment Agreement, GEOP and RPS still need to be finalized and approved Securing permits, licenses and clearances from the local to national level take a long time

36 Moving Forward Policies are not perfect but it is always best to know what you are up against Suppliers and investors are the vital players in the RE industry NREB to develop new FIT for next batch as well as coordinate with DOE to develop next installation targets for submission to the ERC Update the National Renewable Energy Plan (NREP) and Renewable Energy Roadmaps

37 Thank You Status of the Renewable Energy Industry in the Philippines Rosario B. Venturina Vice President, WEDAP ROK-PH Partnership: Exploring Cooperation in Renewable Energy June 27, 2013 Intercontinental Hotel, Makati City