STATUS OF WIND DEVELOPMENT in the PHILIPPINES JOSE M. LAYUG, JR. Undersecretary.
Jose Layug - Update on Implementation of the Philippines Renewable Energy Law
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Update on Implementation of the
Philippine Renewable Energy Law:
Milestones and Targets
Asian Development BankManila, Philippines
June 7, 2012
JOSE M. LAYUG, JR.Undersecretary
Department of Energy
Republic of the Philippines
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DISCUSSION OUTLINE
Background
Available RE Resources
Power Supply Mix and Energy Production
Renewable Energy Act of 2008 Incentives and RE Mechanisms
DOE, NREB, ERC
2010-2012: What Have We Done?
2012-2013: What Are Next Steps?
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UPDATE ON RE IMPLEMENTATION
BACKGROUND
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RENEWABLE ENERGYRESOURCES
BIomass (bagasse) total potential of 235.7 MW
Geothermal Resource 1,200 MW
Solar Energy Average potential 5kWh/m2/day
Hydropower - 10,500 MW
Ocean energy - 170,000 MW
Wind resources 76,600 MW
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COMPARATIVE RE UTILIZATION
Share of RE and Non-RE
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PRIMARY ENERGY SUPPLY MIX
Imported Ethanol, 0.3
ImportedCoal, 8.6
Imported Oil, 33.6
Oil, 2.3
Coal, 8.6
Natural Gas, 7.4
Hydro, 4.8
Geothermal, 21
Biomass, 13.1
Wind/Dolar, 0.01
CME/Ethanol, 0.3
Indigenous Energy,57.51
2010
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POWER GENERATION MIX
Biomass,0.04%
Natural Gas,28.8%
Coal, 34.4%Solar, 0.002%
Wind, 0.09%
Oil, 8.0%
Hydro, 11.5%
Geothermal,14.7%
2010Biomass,
0.02%
NaturalGas,
32.1%
Coal,
26.6%Solar,0.002%
Wind,0.1%
Oil, 8.7%
Hydro,15.8%
Geothermal,
16.7%
2009
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CRUDE OIL IMPORTATION
Others, 8.2
Indonesia,0.7
Malaysia, 10.2
Saudi Arabia, 45.3
UAE, 27
Qatar, 6.4
Oman, 1
Iraq, 1.2
Middle East81%
2010
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COMPARATIVE ENERGY DATA
Country Oil Production Gas Production CoalProduction
RE Target
China (coal 70%) 3.99 mb/d (5th) 94 bcm (8th) 3,240 Mt (1st) 30% (2035)
Vietnam (coal) 300 kb/d (35th) 9.4 bcm (42nd) 44.1 Mt (17th) 5% (2020)
Thailand (natural
gas 66%)
380 kb/d (32nd) 30.8 bcm (25th) 17.9 Mt (25th) 25% (2021)*
(currently 2%)Indonesia (coaland oil)
1.09 mb/d (21st) 82.8 bcm (12th) 305.9 Mt (6th) 25% (2025)*(currently 4%)
Malaysia (naturalgas 60%)
693 kb/d (27th) 58.6 bcm (16th) 78 Mt 17% (2030)*(currently 5%)
Taiwan (nuclear, oiland natural gas)
276 kb/d (37th) 310 m3 (71st) N/A 15% (2025)*(currently 8%)
India (coal 53%) 878 kb/d (24th) 120 bcm (5th) 569.9 Mt (3rd) 15.9% (2022)(currently 11%)
South Korea (oil,coal and nuclear)
48 kb/d (65th) 532 m3 (66th) 3 MMst (shorttons)
10% (2022)
PHILIPPINES
(coal and gas)
9 kb/d (85th) 3.1 bcm (52nd) 7.2 Mt (31st) 50% (2030)
(currently 30%)
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Accelerate the development of the countrys renewable energyresources by providing fiscal and non-fiscal incentives to private
sector investors and equipment manufacturers / suppliers.
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INCENTIVES UNDER RE ACT
12
Renewable Energy Act(RA 9513)
Fiscal Incentives Non-Fiscal Incentives
RenewablePortfolio Std
FITScheme
Net-Metering
GreenEnergyOption
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FISCAL INCENTIVES
Incentives RE Developers Local RE Suppliers7-Year Income Tax Holiday
Yes Yes
Duty-free ImportationYes Yes
VAT-free ImportationNo Tax Credit Yes
Special Realty Tax Rate = 1.5 %
YesNet Operating Loss Carryover
Yes Yes
10% Corporate Tax Rate after ITHYes
Accelerated DepreciationYes Yes
Zero Percent VAT on RE Sales &
Purchases Yes Yes
Cash Incentive = 50% of UC for
Missionary ElectrificationYes
Tax Exemption on Carbon CreditsYes
Tax Credit on Domestic Capital
Equipment & Services
Yes Yes
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Incentives
RE
Developers
Electricity
Suppliers
End-users
Renewable Portfolio Standards Yes
Feed-In Tariff on Emerging
TechnologiesYes Yes
Renewable Energy Market &
CertificatesYes (for Non-FIT) Yes
Green Energy Options Yes
Net Metering Yes
Government waives share of proceeds
on RE micro-scale Projects
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INCENTIVES UNDER RE LAW
15
Renewable Energy Law(RA 9513)
Fiscal Incentives Non-Fiscal Incentives
RenewablePortfolio Std
FIT
SchemeNet-
Metering
GreenEnergyOption
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IMPLEMENTATION OF RE LAW
WHAT HAVE WE DONE IN 2010-2012?
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DOE SPECIFIC ACTIONS
National Renewable Energy Program (NREP)
Signals big leap from fragmented initiatives into a focused andsustained drive towards energy security and improved access toclean energy and sets indicative interim targets for delivery of REwithin timeframe of 2011-2030 a LivingDocument
Renewable Portfolio Standards (RPS)
The RPS is an important component of the implementation of the REAct. The NREB shall set the minimum percentage of generation from
eligible RE resources and determine to which sector RPS shall beimposed on a per grid basis. The electricity suppliers are required tosource this minimum percentage i.e. RPS from eligible REgeneration facilities.
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DOE SPECIFIC ACTIONS
Renewable Portfolio Standards (RPS)
Conducted seven Regional Public Consultation (Luzon, Visayas,Mindanao), Round Table discussion (RTD) at DOE and PlenaryPublic Consultation at PICC on Feb. 16-25, 2010, March 25, 2011and November 14, 2011 respectively. RPS Rules pending approval
by DOE Secretary.
Feed-in Tariff
A fair FIT would encourage investments without unduly burdening
the consumers. The FIT also guarantees payment of a fixed tariff forRE generation for a mandated number of years.
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RE AWARDED CONTRACTS
Resource Awarded Contracts(Own-Use)
Potential Capacity(MW)
Hydro 138 2,450.16
Ocean 3 5.00
Geothermal 35 806.00
Wind 53 (1) 1,708 (0.06)
Solar 17 (1) 271 (0.08)
Biomass 24 (19) 164.30 (40.0)
TOTAL 291 5,444.76
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RE PENDING APPLICATIONS
Resource Awarded Contracts(Own-Use)
Potential Capacity(MW)
Hydro 157 1,848.65
Ocean 2
Geothermal 1 60.00
Wind 19 286.00
Solar 24 (1) 117.83 (0.02)
Biomass 6 (3) 51.20 (1.36)TOTAL 213 2,365.06
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UPC Pagudpud (80 MW)EDC Burgos , Pagudpud (166 MW)TAREC Lorenzo (54 MW)ELPI Pasuguin (120 MW)PERC Sual (30 MW)
Nabas
(30 MW)
Legend:136 887
HEP
Geothermal
Biomass
Wind
Northpoint - Aparri (20 MW)Alternergy Pililia, Sta. Praxedes,Kalayaan, Ballesteros (120 MW)TAREC
Ballesteros, Sibunag,
Nueva Valencia (90 MW)
LUZON GRID
SUWECO Cagayan (6MW)Epower Ifugao (4.5 MW)
- Nueva Ecija (8MW)
HEDCOR Benguet , Mt.Province (17 MW)
Clean&Green Camsur (1.5 MW)
Green Power - Nueva Ecija (17.5 MW)- Pangasinan (17.5 MW)
Tanawon Geo (40 MW)=2013Rangas Geo (40 MW)=2015Manito-Kayabon Geo(40MW)=2016EDC BacMan (150 MW)Aboitiz Tiwi (289 MW)
Aboitiz Makban (458 MW)
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P A N A YP A N A Y
Dauin Geo (40 MW) - 2017Green Core Panlinpinon(192 MW)EDC Negros (49 MW)
Southern Leyte Geo (40 MW) - 2019Green Core Leyte (112 MW)EDC Tongonan, Leyte (722 MW)
EDC NasuloGeothermal (20 MW)
VISAYAS GRID
Legend:
HEP
Geothermal
Biomass
SUWECO
Panay etc. (31 MW)HEDCOR Aklan (18 MW)Century Peak Iloilo (5MW)
Green Power Panay (35 MW)
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HEDCOR Davao (25.1 MW)
AGUS 3 HEP (225 MW)=2011HEDCOR Bukidnon (38.2MW)
CEPALCO Cabulig HEP(8 MW)=June 2011
HEDCOR Sibulan Inc.(42.5 MW)
EDC - Mindanao Geothermal 3(50 MW)=2014- Mt. Apo (108 MW)
MINDANAO GRID
Legend:
HEP
Geothermal
Biomass
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NATIONAL RENEWABLE ENERGYPROGRAM
RE-based On-Grid Capacity Installation Targets
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NREB SPECIFIC ACTIONS
Feed-in Tariff
Filed a petition to initiate rule-making for the adoption of the FIT forelectricity generated from biomass, ocean, run-of-river hydropower,solar and wind energy resources last May 16, 2011.
Net -Metering Interconnection Standards
Approved the Rules Enabling the Net Metering Program for RE onApril 11, 2012 and subsequently endorsed to ERC on April 20, 2012.The Rules seek only to establish the net-metering interconnection
standards for RE while the pricing methodology will be addressed inanother set of rules and will be endorsed to the ERC in due course.
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NREB SPECIFIC ACTIONS
Renewable Portfolio Standards (RPS) for Missionary Areas
To contribute to the growth of the renewable energy industry bydiversify energy supply, spur socio-economic development, andhelp address environmental concerns in missionary areas.Technical Working Groups on Off-Grids is finalizing draft RPS for
presentation to NREB.
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ERC SPECIFIC ACTIONS
Feed-in Tariff
Approved FIT Rules on July 12, 2010 which took effect on August12, 2010. The NREB FIT petition was subjected to a series ofcontinuous public hearings and presentation of evidence. OnMarch 20, 2012 the ERC declared the hearing terminated. To
date, the DOE, NREB and all interested parties are awaiting forthe FIT rates to be determined by the ERC.
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IMPLEMENTATION OF RE LAW
WHAT ARE NEXT STEPS IN 2010-2012?
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2012-2013 NEXT STEPS
Feed-in Tariff Implementation RE Trust Fund RE Resource Inventory and Assessments RPS Issuance and Setting Eligibility Criteria Rules
Grid Impact Studies and InterconnectionAgreements
Green Energy Option Processing of RE Applications
Mainstreaming RE: Information and EducationCampaigns, Regional and Area-basedDevelopment
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RENEWABLE ENERGY PLANSAND PROGRAMS
RE-based On-Grid Capacity Installation Targets
[1]Based on existing RE Service/Operating Contracts awarded and being evaluated by the DOE. The aspirational target of 1,528 MW solar power capacity will still be pursued.
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THE ROAD STARTS HERE
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