Renewable Energy Development and Related Promotion and Pricing Mechanism in the Philippines

APEC WORKSHOPChinese Taipei, 26-27 September 2013

ELVIRA TORRES-GELINDONSenior Researcher, APERC

OUTLINE OF PRESENTATION• Background/Country Profile• Current Energy Situation• National Renewable Energy

Program (NREP)• Sub-Sectoral Programs and Targets

RENEWABLE ENERGY

DEVELOPMENT

• Renewable Energy Portfolio Standards (RPS)

• Feed-in-Tariff (FIT)• Feed-in-Tariff Allowance (FiT All)• Net Metering System

RE POLICY (PRICING)

MECHANISM

BACKGROUND/COUNTRY PROFILE

CURRENT ENERGY SITUATIONPrimary Energy Mix Fuel Input Mix for Power

Generation

RENEWABLE ENERGY DEVELOPMENT

Passage of Republic Act 9513 or Renewable Act of 2008

Renewable Energy Management Bureau (REMB)

National Renewable Energy Board (NREB)

National Renewable Energy Program (NREP)

-Accelerates the economy’s RE development

NATIONAL RENEWABLE ENERGY PROGRAM (NREP)Development FrameworkSectoral Sub-

ProgramsPolicy and Program Support

Institutionalize a comprehensive approach to accelerate the applications of renewable energy technologies in a sustainable manner

Setoral Targets

1. Increase geothermal capacity by 75.0 percent;2. Increase hydropower capacity by 160 percent;3. Deliver additional 277MW biomass power capacities;4. Attain wind power grid parity with the commissioning of 2,345 MW additional capacities;5. Mainstream an additional 284 MW solar power capacities and pursue the achievement of the 1,528 MW aspirational target; 6. Develop the first ocean energy facility for the country.

The 2010 RE Capacity level tripled by 2030

SUB-SECTORAL PROGRAMS

DEVELOP BEP

• B2 • E5

IMPLEMENT & UPDATE BEP PLANS, PROJECTS & ACTIVITIES

2012

• B5

2015

M I L E S T O N E S

M A J O R S T R A T E G Y

Mainstreaming of 913 MW (6.398 GWH) biomass capacities (US$2.3 B) Displaced 2,600 Million Liters of Fossil Fuel (US$1.37 Billion)

Generated jobs – 730 direct jobs

20202015 20302011 2025

• E10

• B10 & E20

2017

• B20 & E85

2021

• RA 9513 is in full swing • FIT for biomass is viable

Infrastructure support for blends increase

BIOMASS ENERGY ROADMAP

DEVELOP GEP

IMPLEMENT & UPDATE GEP PLANS, PROJECTS & ACTIVITIES

2012

• Geothermal Training Center

• 220 MW additional installed capacity2015 2020

• 1,100 MW additional installed capacity

M I L E S T O N E S

M A J O R S T R A T E G Y

Mainstreaming of 1,495 MW (81.06 TWH) capacities (US$3.153 B) Annual CO2 emission reduction - 60.795 Million Tons (US$303.975 M)

Generated jobs – 2,541 direct jobs

20202015 20302011 2025

• RA 9513 is in full swing

• GEP is in place

2025

• 95 MW additional installed capacity

• 80 MW additional installed capacity

GEOTHERMAL ENERGY ROADMAP

M I L E S T O N E S

DEVELOP SEP

IMPLEMENT & UPDATE SEP PLANS, PROJECTS & ACTIVITIES

2012 2015

• Additional 269 MW capacity

• CSP Demo Power Facility• PV Institute• Smart Grid Demo• Established Solar

Laboratory

2017 2020

• PV reached Grid Parity• Integration of CSP

M A J O R S T R A T E G Y

Mainstreaming of 1,528 MW (475 GWH) solar capacities (US$4.6 B) Annual CO2 Emission Reduction - 1.81 Million Tons (US$9.0 M)

Generated jobs – 1,200 direct jobs

20202015 20302011 2025

• RA 9513 in full swing

• FIT for solar is viable

• SEP in place

• PV Net Metering Demo

SOLAR ENERGY ROADMAP M I L E S T O N E S

M I L E S T O N E S

DEVELOP HOEP

IMPLEMENT & UPDATE HOEP PLANS, PROJECTS & ACTIVITIES

2012 2015

• 98 MW additional installed capacity (2.15% of the small-hydro target capacity)

• 1,575 MW additional installed capacity (35.4% of the hydro target capacity)

• At least two new OTEC facility is added to the grid 2025

M A J O R S T R A T E G Y

Mainstreaming of 4,580 MW ( 24.072 TWH) hydro capacities (US$11.449 B) Annual CO2 Emission Reduction - 18.054 Million Tons

(US$90.272 M) Generated jobs – 3,664 direct jobs

20202015 20302011 2025

• RA 9513 in full swing

• FIT for hydro is viable

• HOEP in place

2020

• 2,958 MW additional capacity (62.5% of the hydro target hydro capacity)

• First OTEC facility is added to the grid

HYDRO AND OCEAN ENERGY ROADMAP

M I L E S T O N E S

DEVELOP WEP

IMPLEMENT & UPDATE WEP PLANS, PROJECTS & ACTIVITIES

2012 2025

• Wind power reached Grid Parity

M A J O R S T R A T E G Y

Mainstreaming of 1,540 MW (3.372 TWH) wind capacities (US$3.85 B) Annual CO2 emission reduction - 2.529 Million Tons (US$12.7 M) Generated jobs – 1,280 direct

jobs

20202015 20302011 2025

• 1,172 MW additional capacity

• Smart Grid Demo2015

• RA 9513 is in full swing • FIT for wind is viable (on-grid & off-grid)

• Transmission Development Plan• Distribution Development Plan

2022

• Additional 442 MW capacity

2020

• Additional 855 MW capacity

WIND ENERGY ROADMAP

RE POLICY MECHANISM• the minimum percentage of generation from eligible RE resources

provided by the generators, distribution utilities and electric suppliers necessary in the application of FiT on a per technology basis;

Renewable Portfolio Standards (RPS)

• guaranteed payment in Philippine Peso per kilowatt-hour (“Php/kWh”) for electricity generated from emerging renewable energy technologies and actually delivered to the distribution and transmission network;

Feed-in-Tariff (FIT)

• a uniform charge determined and collected by FIT All Fund Administrator which would cover the differential above the prevailing cost recovery rate for eligible RE generation actually delivered;

Feed-in-Tariff Allowance (FIT All)

• 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 utility (DU) may be used to offset electric energy provided by the DU to the end-user during the applicable period.

Net Metering System

RENEWABLE ENERGY PORTFOLIO STANDARDS

SOLAR – 50 MW

WIND – 200 MW

BIOMASS – 200 MW

RUN-OFF RIVER HYDRO – 250 MW

OCEAN – 10 MW

Initial installation targets for RPS until 2015

FEED-IN-TARIFF (FIT)

SOLAR – P9.68/kWh (USD 0.242/kWh)

WIND – P8.53/kWh (USD 0.213/kWh)

BIOMASS – P6.63/kWh (USD0.165/kWh)

RUN-OFF RIVER HYDRO – P5.90/kWh (USD0.145/kWh)

Still under study

FEED-IN-TARIFF ALLOWANCE (FIT All)

Source : Energy Regulatory Commission (ERC)

FD- Total FIT Differential ; CRR – Cost Recovery Revenue; WCA – Working Capital Allowance; AA- Administration Allowance; DA – Disbursement Allowance

NET METERING SYSTEM

Proposed by the National Renewable Energy Board (NREB) to ERCa 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 utility (DU) may be used to offset electric energy provided by the DU to the end-user during the applicable period.

CURRENT STATUS

Further guidelines on the payment and collection of FIT Allowance has been submitted by DOE to ERC for review and approval;

The ERC posted invitation to stakeholders for comments on the FIT All guidelines;

FIT and FIT All System implementation pending resolution of some administrative issues

Thank You for your attention!