Green Energy Technologies Philippines Market Study
AUGUST 2017
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EU Business Avenues in South East Asia
Central Management Unit
Philippines Market Study
August 2017
Submitted to the European Commission on 11 August 2017
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Table of Contents
LIST OF FIGURES & TABLES ...... 6
TABLE OF ABBREVIATIONS ...... 8
1. EXECUTIVE SUMMARY ...... 12
2. WHAT ARE THE CHARACTERISTICS OF THE PHILIPPINES? ...... 18 2.1. POLITICAL OVERVIEW ...... 19 2.2. ECONOMIC OVERVIEW ...... 20 2.3. TRADE OVERVIEW ...... 21 2.4. MARKET ACCESS ...... 23 2.5. BUSINESS AND COMPETITIVE ENVIRONMENT ...... 24
3. MARKET OVERVIEW & EU ENTRY OPPORTUNITIES IN THE PHILIPPINES ...... 25 3.1 THE GREEN ENERGY TECHNOLOGIES SECTOR IN THE PHILIPPINES ...... 25 3.1.1 Overview of the Energy Sector ...... 25 3.1.2 Key Agencies & Associations ...... 36 3.1.3 Entry Strategies ...... 39 3.1.4 Challenges & Entry Barriers ...... 41 3.2 WIND ...... 44 3.2.1 Market Overview ...... 44 3.2.2 EU Entry Opportunities ...... 48 3.3 SOLAR ...... 51 3.3.1 Market Overview ...... 51 3.2.2 EU Entry Opportunities ...... 56 3.4 AEROTHERMAL ...... 60 3.4.1 Market Overview ...... 60 3.4.2 EU Entry Opportunities ...... 60 3.5 GEOTHERMAL ...... 61 3.5.1 Market Overview ...... 61 3.5.2 EU Entry Opportunities ...... 65 3.6 HYDROTHERMAL & OCEAN ENERGY ...... 69 3.6.1 Market Overview ...... 69 3.6.2 EU Entry Opportunities ...... 71 3.7 HYDROPOWER ...... 74 3.7.1 Market Overview ...... 74 3.7.2 EU Entry Opportunities ...... 77
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3.8 BIOMASS ...... 80 3.8.1 Market Overview ...... 80 3.8.2 EU Entry Opportunities ...... 84 3.9 LANDFILL GAS/ SEWAGE TREATMENT GAS/ BIOGAS ...... 87 3.9.1 Market Overview ...... 87 3.9.2 EU Entry Opportunities ...... 91 3.10 POWER GENERATION ...... 95 3.10.1 Market Overview ...... 95 3.10.2 EU Market Opportunities ...... 98 3.11 ENERGY EFFICIENCY & CARBON SERVICES ...... 101 3.11.1 Market Overview ...... 101 3.11.2 EU Entry Opportunities ...... 104 3.12 BIOFUEL ...... 107 3.12.1 Market Overview ...... 107 3.12.2 EU Entry Opportunities ...... 111 3.13 COGENERATION TECHNOLOGY ...... 113 3.13.1 Market Overview ...... 113 3.13.2 EU Entry Opportunities ...... 116 3.14 CARBON CAPTURE AND STORAGE ...... 119 3.14.1 Market Overview ...... 119 3.14.2 EU Entry Opportunities ...... 120 3.15 ELECTRIC VEHICLES ...... 122 3.15.1 Market Overview ...... 122 3.15.2 EU Entry Opportunities ...... 128
4.0 REGULATIONS ...... 131 4.1 GENERAL IMPORT PROCEDURES ...... 131 4.2 KEY ACTS ...... 132 4.3 KEY AGENCIES ...... 134 4.4 GOVERNMENT TENDERS ...... 136
5. ANNEX ...... 138 5.1 LIST OF USEFUL CONTACTS ...... 138 5.2 STARTING A BUSINESS IN THE PHILIPPINES ...... 141 5.3 USEFUL STATISTICS ...... 144 5.4 BIBLIOGRAPHY ...... 173
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List of Figures & Tables
Figure 1: Map of the Philippines ...... 18 Figure 2: Electricity Supply, 2016 ...... 25 Figure 3: Industry Structure prior to the Electric Power Industry Reform Act (EPIRA) ...... 26 Figure 4: Industry structure under Electric Power Industry Reform Act (EPIRA) ...... 27 Figure 5: Industry Structure under RCOA ...... 28 Figure 6: The Bangui Wind Farm ...... 45 Figure 7: Solar Irradiation across the Philippines ...... 51 Figure 8: The Raslag Solar Power Project ...... 53 Figure 9: Palinpinon Geothermal Plant ...... 61 Figure 10: Geothermal Roadmap, 2013-2030 ...... 63 Figure 11: Potential Ocean Energy Sites in the Philippines ...... 69 Figure 12: Bakun AC Hydroelectric Plant ...... 74 Figure 13: Key Power Players in the Philippines ...... 96 Figure 14: Map of CCS Projects in the Asia Pacific Region ...... 120 Figure 15: Jeepney, Transportation in the Philippines ...... 123 Figure 16: E-Tricycles in the Philippines ...... 125 Figure 17: Etro Agila Motorcycle with Sidecar...... 128
Table 1: Ease of Doing Business in Singapore ...... 24 Table 2: Key Players ...... 29 Table 3: Global Infrastructure Competitiveness Ranking 2016/2017 ...... 42 Table 4:Philippines – Wind Electric Potential ...... 44 Table 5: Wind Energy Targets, 2011 – 2030 ...... 48 Table 6: Government Collaboration Projects in the Philippines ...... 54 Table 7: Key Geothermal Fields ...... 62 Table 8: Target geothermal sites, 2012-2030 ...... 66 Table 9: Distribution of hydro power plants according to type ...... 75 Table 10: Potential Power of Agro-Residential Residues ...... 81 Table 11: Biomass Cogeneration Plants in the Philippines ...... 82 Table 12: Energy Efficiency Targets 2030 ...... 102 Table 13: Bioethanol facilities in the Philippines ...... 109 Table 14: Cogeneration facilities in the Philippines ...... 114 Table 15: Philippines National Standards (PNS) for Electric Vehicles ...... 125 Table 16: Power Consumption by Sector ...... 144 Table 17: Power Generation by Grid ...... 145 Table 18: Installed Generating Capacity ...... 147 Table 19: Dependable Generating Capacity ...... 148 Table 20: Installed Generating Capacity in Luzon ...... 149 Table 21: Installed Generating Capacity in Visayas ...... 150 Table 22: Installed Generating Capacity in Mindanao ...... 151 Table 23: Dependable Generating Capacity in Luzon ...... 152 Table 24: Dependable Generating Capacity in Visayas ...... 153 Table 25: Dependable Generating Capacity in Mindanao ...... 154 Table 26: Gross Power Generation by Plant Type in Luzon...... 155
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Table 27: Gross Power Generation by Plant Type in Visayas ...... 156 Table 28: Gross Power Generation by Plant Type in Mindanao ...... 157 Table 29: Gross Power Generation by Grid ...... 158 Table 30: Gross Power Generation by Plant Type ...... 159 Table 31: Electricity Consumption (Sales, Utility Use, System Loss) in Luzon ...... 160 Table 32: Electricity Consumption (Sales, Utility Use, System Loss) in Visayas ...... 161 Table 33: Electricity Consumption (Sales, Utility Use, System Loss) in Mindanao ...... 162 Table 34: Electricity Consumption (Sales, Utility Use, System Loss) in the Philippines ...... 163 Table 35: Annual System Peak Demand per Grid ...... 164 Table 36: Imports of Photosensitive semiconductor devices, incl. photovoltaic cells ...... 165 Table 37: Exports of Photosensitive semiconductor devices, incl. photovoltaic cells ...... 166 Table 38: Imports of Parts of non-electrical engines and motors ...... 166 Table 39: Exports of Parts of non-electrical engines and motors ...... 167 Table 40: Imports of Generating sets, wind-powered ...... 167 Table 41: Exports of Generating sets, wind-powered...... 168 Table 42: Imports of Generating sets ...... 168 Table 43: Exports of Generating sets ...... 169 Table 44: Imports of Heat-exchange units ...... 169 Table 45: Exports of Heat-exchange units ...... 170 Table 46: Imports of Hydraulic turbines, water wheels, and regulators therefor ...... 170 Table 47: Exports of Hydraulic turbines, water wheels, and regulators therefor ...... 171 Table 48: Imports of Furnace burners for pulverised solid fuel or gas ...... 171 Table 49: Exports of Furnace burners for pulverised solid fuel or gas ...... 172
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Table of Abbreviations
ADB Asian Development Bank AFTA ASEAN Free Trade Area AMORE Alliance for Mindanao Off-Grid Renewable Energy ASEAN Association of Southeast Asian Nations BAU Business As Usual BOI Board of Investment of Philippines BOT Build-Operate-Transfer CCS Carbon Capture and Storage CDM Clean Development Mechanism CEnergy Philippines Climate Change and Clean Energy Project CER Certified Emission Reduction CIF Cost, Insurance and Freight CME Coco Methyl Ester COP Conference of Parties CPF Carbon Partnership Facility CSP Competitive Selection Process CTI-PFAN Climate Technology Initiative - Private Financing Advisory Network DENR Department of Environment and Natural Resources of Philippines DOE Department of Energy of Philippines DOST Department of Science and Technology of Philippines DTI Department of Trade and Investment of Philippines EC Electric Cooperative EC-LEDS Enhancing Capacity for Low Emission Development Strategies EDC Energy Development Corporation EPC Engineering, Procurement and Construction EPIRA Electric Power Industry Reform Act ERA Energy Reform Agenda ERB Energy Regulatory Board ERC Energy Regulatory Commission ESCOS Energy Service Companies EU European Union EUR Euro (European Currency) EV Electric Vehicle FIT Feed In Tariff FLAG Forest Land Use Agreement FTA Free Trade Agreement GB Green Building GDP Gross Domestic Product
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GenCo Generation Company GNI Gross National Income GSP General Scheme of Preferences GW Gigawatt GwH Gigawatt per Hour HDPE High Density Polyethylene HDPED High Density Polyethylene Digesters HEPP Hydroelectric Power Plant HVAC Heating, Ventilation and Air-Conditioning IFC International Finance Corporation IPO Intellectual Property Office IPP Independent Power Producer IRENA International Renewable Energy Agency JAO Joint Administrative Order JV Joint Venture km2 Square kilometre KTOE Kilo Tonne of Oil Equivalent kV Kilovolt kWh Kilowatt per Hour LED Light-Emitting Diode LFG Landfill Gas LGU Local Government Unit LNG Liquefied Natural Gas MERALCO Manila Electric Company mmscf Million Standard Cubic per Square Feet MO Market Operator MoU Memorandum of Understanding MVA Mega Volt Amp MW Megawatt NAWRMP National Animal Waste Resource Management Programme NBB National Biofuels Board of Philippines NCIP National Commission on Indigenous Peoples of Philippines NEA National Electrification Administration NEDA National Economic and Development Authority NGCP National Grid Corporation of The Philippines NGO Non-Governmental Organisation NPC National Power Corporation NREB National Renewable Energy Board of Philippines NREL National Renewable Energy Laboratory NREP National Renewable Energy Programme NSCB National Statistical Coordination Board of Philippines
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NSWMC National Solid Waste Management Commission of Philippines OTEC Ocean Thermal Energy Conversion PCA Partnership and Cooperation Agreement PDP Philippines Development Plan PEMC Philippine Electricity Market Corporation PESLP Philippines Energy Standards and Labelling Programme PEZA Philippine Economic Zone Authority PhilGEPS Philippine Government Electronic Procurement System PhiLiDAR Philippine Light Detection and Ranging PHP Philippine Peso (Philippines Currency) PNOC Philippine National Oil Company PNS Philippines National Standard PPR Particular Product Requirements PRIS MC Pampanga River Irrigation System Main Canal PSALM Power Sector Assets and Liabilities Management Corporation PSC Public Service Commission PV Photovoltaic QTP Qualified Third Party R&D Research and Development RA Republic Act RCOA Retail Competition and Open Access RE Renewable Energy REMB Renewable Energy Management Bureau of Philippines RPS Renewable Portfolio Standards SEC Securities and Exchange Commission of Philippines SESC Solar Energy Service Contract SLUP Special Land Use Agreement SO System Operator SPEDD Scalable Poluethylene Drum Digesters SPUG Small Power Utilities Group SRA Sugar Regulatory Administration TDP Transmission Development Plan TISEC Tidal In-Stream Energy Conversion tpd Tonne per Day TPED Tubular Polyethylene Digesters TPP Trans-Pacific Partnership TRANSCO National Transmission Corporation US United States of America USAID United States Agency for International Development VAT Value Added Tax WADE World Alliance for Decentralised Energy
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WEF World Economic Forum WESM Wholesale Electricity Spot Market WTE Waste-To-Energy WWEA World Wind Resource Energy Assessment
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1. Executive Summary
The Philippines is currently one of the most dynamic economies in the South East Asia region, with sound economic fundamentals and a globally recognised competitive workforce. Growth has been robust in the past years, registering an average of 6.2% from 2010-2015, significantly higher than the average 4.5% annual growth in 2000-2009. The Philippines has the 12th largest population in the world and is the fourth largest English-speaking country. It also has one of the youngest populations in the world, with more than two-thirds under the age of 35.
The Philippines is rich with renewable energy resources, including robust wind energy sites, ideal solar conditions, and an abundance of hydro and biomass resources. The passage of the Renewable Energy Act of 2008, establishes a policy environment that offers fiscal and non-fiscal incentives to equipment manufacturers. The Philippines has been developing large-scale, economically viable green energy projects. While earlier power plants have consisted almost exclusively of hydro and geothermal power, the country’s new National Renewable Energy Programme (NREP) contributes to the energy mix.
Wind
The Philippines is exposed to strong winds, resulting in good-to-excellent wind availability throughout much of the country, with the best resources in the north and northeast of the archipelago. The World Wind Resource Energy Assessment (WWEA) estimates that the Philippines has a wind power of 173.6 GW at 30 m height, which is suitable for most utility scale wind turbine applications.
Solar
The Philippines enjoys abundant sunlight, and the potential power generating capacity of the country is estimated to be at 4.5-5.5 kWh per square meter per day. Investment in the domestic sector is surging, and the country has developed an industrial base with capability to produce semiconductors and other components for solar farms.
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Geothermal
The first developments of geothermal resources in the Philippines date back to the late 1970s. The country is in an ideal location for geothermal energy, as it lies on a tectonically active area in the eastern Pacific Ring of Fire, ranking second worldwide in terms of its cumulative installed capacity for geothermal power. The Philippines plans to reach an additional 1,455 MW geothermal capacity by 2030.
Aerothermal
The industry is yet to be developed in the Philippines, with no concrete initiatives in this area.
Hydrothermal & Ocean Energy
Even though the country is endowed with vast ocean resource potential, high investment costs have so far deterred deep exploitation the Philippines’ hydrothermal and ocean energy sector. Recently, the government has set a target for ocean energy to generate 35.5 MW in the 2016- 2020 period.
Hydropower
Hydropower is responsible for 19.7% of the Philippines’ total energy consumption, making it one of the leading sources of clean energy in the country. The Philippines has abundant rainfall, and the private sector has been supported by the state in developing power projects. At the end of 2016, total installed capacity for hydropower in the Philippines amounted to over 3,600 MW.
Biomass
Even though biomass energy accounts for just over 3% of the total renewable energy resources generated in the Philippines, the local industry is growing rapidly. Foreign companies have limited presence in the local industry, but the interest is growing, with a number of foreign players having initiated partnerships or ventured directly into the market.
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Landfill Gas/ Sewage Treatment Gas/ Biogas
Agriculture plays an important role in the Philippines’ economy, creating an interesting environment for the exploitation of landfill gas, sewage treatment, and biogas, which is widely harnessed in the country for both on and off-grid supplies. The Philippines’ Department of Energy estimates that biogas resources have the potential to generate a capacity of 4,450 MW.
Power Generation
Fossil fuels are the major source of the Philippine’s power generation, with coal power plants accounting for over 34% of total power generation in the country. However, green energy plants such as geothermal, hydro, biomass, solar and wind energy sources make up the second largest share in the total installed capacity, with over 32% of power generated to end users in 2016, and the share is predicted to grow further.
Energy Efficiency & Carbon Services
The Philippines has committed to reduce emissions by 70% below projected levels by 2030, and the country plans to improve the efficiency of its consumption of energy across all sectors, with industry-specific targets for the short, medium and long-term. These directions are part of the Energy Efficiency Roadmap 2014-2030, which has been developed with the assistance of the European Union.
Biofuel
The government plans to develop the use of biofuels in order to reduce the Philippines’ dependence on imported fossil fuels. Biodiesel from coconut and bioethanol from sugarcane and molasses are the leading biofuels produced domestically. The Philippines was the first country in South East Asia to have biofuel legislation in place.
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Cogeneration Technology
The use of cogeneration technologies is growing in the Philippines, in particular for machines that employ sugarcane bagasse and other surplus organic materials as feedstock. As of December 2016, the Philippine Department of Energy counts 12 cogeneration projects implemented in the country.
Carbon Capture and Storage
The country does not have any carbon capture and storage projects. Other countries in the region, such as Indonesia, are taking initial steps exploring large-scale applications.
Electric Vehicles
The Philippines’ government and private actors are cooperating in order to develop the domestic industry, and the country is set to become the region's electric car hub. The Philippines is one of the few countries in South East Asia to have created its own national standard dedicated to electric vehicles, and the nation counts 28 companies manufacturing various types of such vehicles.
Opportunities
Government Support
The Philippines’ government is actively encouraging the development of the Green Energy Technology sector, and has set targets for each renewable energy source under its new National Renewable Energy Programme (NREP), which aims to increase installed capacity from renewable energy at over 15,200 MW by 2030. Other renewable energy milestones include the creation of the Renewable Energy Management Bureau and the National Biofuels Board, and the implementation of the Net Metering scheme. Policy mechanisms such as the Renewable Energy Portfolio Standards are under final review.
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Investment Priority Plan
Under the Investment Priority Plan (IPP), both fiscal (e.g. income tax holiday for 4-6 years) and non-fiscal incentives (e.g. simplification of custom procedures) are provided to companies which invest in green energy. EU business partners may be more motivated to invest under this scheme as they are allowed to own up to 40% of equity.
Supply of Technology
As the Philippine’s industry is rapidly advancing, EU companies with experience in more mature markets have the opportunity to supply equipment, technology solutions, and related services in developing green energy infrastructure projects. For example, the wind systems in the Burgos wind project (0.150 GW in capacity) are supplied by Danish company Vestas.
International Commitments
International agreements are also creating significant opportunities in the Philippines’ sector. For instance, the country is a signatory to the international climate agreement signed in Paris in December 2015. This agreement deals with the threat of climate change in part through the deployment of clean energy technologies, and the Philippines has committed to reduce carbon emissions, conditionally, by 70% from business-as-usual by 2030.
Energy Diversification
The Philippines has one of the highest electricity rates in Asia, and the country is heavily dependent on imports of energy and volatile fossil fuels. The Philippines is increasingly focussing on the development of domestic energies, and in particular renewables that can address the country’s energy security challenges and to assure a steady and continuous power supply for its citizens.
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Trade Shows
Apart from being one of the most dynamic markets in the world for green energies, the Philippines is also an excellent location for showcasing innovative products and solutions. For instance, the country hosts the Power & Electricity World Philippines, an international event gathering more than 8,000 stakeholders, including policymakers, regulators, local industry heavyweights, international energy experts and many other players.
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2. What are the characteristics of the Philippines?
The Republic of the Philippines is a sovereign island nation in South East Asia situated in the western Pacific Ocean. It has 7,107 islands spanning more than 300,000 km2 of territory. It is divided into three island groups: Luzon, Visayas, and Mindanao. The climate of the Philippines is tropical and maritime, characterised by relatively high temperature, high humidity and abundant rainfall.
The country has an estimated population of over 100 million and a recorded GDP of US$ 310 billion in 2016. The major industries in the Philippines include manufacturing, business process outsourcing, construction and infrastructure.
The Philippines is among the fastest-growing economies in South East Asia, with upgrades to sovereign investment ratings confirming improvements in the country’s macroeconomic fundamentals. The country has a mixed economic system which includes a variety of private freedom combined with centralised economic planning and government regulation.
The country is composed of a unique blend of Malay, Chinese, Spanish, American and Arab ethnic groups. Figure 1: Map of the Philippines Source: CIA
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More than 100 cultural minority groups are scattered throughout the country. The Philippines lists Filipino and English as its official languages while Spanish, Chinese, Malay, Japanese, Tamil and Arabic languages are also used in the country.
2.1. Political Overview
The Philippines is a republic with a presidential form of government wherein power is equally divided among its three branches: executive, legislative, and judicial. The executive branch is headed by the President, who serves as the Chief of State and Head of Government. The legislative branch is the bicameral congress composed of members of the Senate and the House of Representatives while the judicial branch is headed by the Chief Justice.
The Constitution of the Philippines is the highest law of the land. The Constitution currently in effect was proclaimed on 2nd February, 1987 and popularly known as the 1987 Constitution.
There are a number of political parties in the country’s political system with different ideologies. With this multi-party system, no one party often has a chance of gaining power alone. Thus, elected officers work with each other to form coalition of governments. Currently there are two types of parties in the Philippines, the Major Parties, traditional political parties, and Minor Parties or Party-list Organisations, who bank on the party-list system to win Congressional Seats.
In May 2016, a national election for the executive and legislative positions took place in the country where a total of 18,083 positions were at stake. It was Rodrigo Duterte from the Partido Demokratiko Pilipino-Lakas ng Bayan (PDP-Laban) Party who won the Presidency and became the 16th President of the Philippines, succeeding Benigno S. Aquino III from the Liberal Party.
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2.2. Economic Overview
The Philippines’ emergence as a growth leader has been building gradually since the 1990s, following a long period of low growth and political upheaval. The country’s GDP growth for 2017 is projected at 6.2%. The Philippines is classified as a low middle-income nation with a GNI per capita of US$ 3,540.
The country’s service sector represents 58.8% of
The Philippines Government has pursued its GDP and employs more than half of its legislative reforms to enhance the workforce. The major sections of this sector include entrepreneurial environment and develop a trade and repair (motor vehicles), real estate, more vibrant private sector. transportation and communication. Its industrial sector contributes to 30.9% of its GDP and employs about 15% of the country’s workforce. Industrial food processing is among the Philippines’ main manufacturing activities along with the production of cement, glass, chemical products and fertilisers, iron, steel and refined oil products.
The agricultural sector in the country employs about 32% of the labour force but only contributes 10.3% to its GDP. The Philippines is a mineral-rich country with an unexploited mineral wealth of US$ 1.4 trillion.1
The Philippines Government has pursued legislative reforms to enhance the entrepreneurial environment and develop a more vibrant private sector to generate broader-based job growth. Poor infrastructure remains a serious impediment to the country but its economic growth reflects its efforts in addressing this challenge by developing the infrastructure of the nation with more than 50 infrastructure projects in the pipeline.2
1 Trillion-Dollar Philippine Economic Goldmine Emerging From Murky Pit, 2015 Forbes Asia 2 Philippines readying 'hundreds' of infrastructure projects, 2016 Nikkei Asian Review
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2.3. Trade Overview
The Philippines has been rather cautious in its Free-trade agreement (FTA) policies compared to some of its ASEAN neighbours, having only 7 signed and in-effect FTAs. The Philippines is a member of the ASEAN Free Trade Area (AFTA), which plays a key role in the nation’s intra- Asian trade. ASEAN has FTAs with China, India, Japan, South Korea, Australia and New Zealand. The Philippines has expressed interest in joining the US-led EU foreign direct investment stock in the Philippines Trans Pacific Partnership (TPP) amounted to €6.1 billion in 2013, making the EU the largest to lower or eliminate trade investor in the Philippines restrictions. However, the country has not been invited to join at the present due, among other things, to protectionist economic policies in its Constitution restricting foreign ownership of property.
The EU and the Philippines signed a Partnership and Cooperation Agreement (PCA)3 in 2012. Among areas covered in PCA are, the commitment to promote economic and social progress between two parties and also promote sustainable development, including environmental protection and effective cooperation to combat climate change with emphasis on green technology adoption within the countries. In 2014, the Philippines was a beneficiary of trade preferences granted by the EU under the standard Generalised Scheme of Preferences (GSP). A zero-rate tariff is offered under this scheme for over 6200 tariff lines as a part of a special incentive arrangement between EU and Philippines.4
Negotiations for an EU-Philippines Free Trade Agreement were launched on 22 December 2015. The FTA will develop a key aspect of Europe’s overall relationship with the Philippines that is based on the Partnership and Cooperation Agreement signed in 2012. Terms being discussed and negotiated include topics such as rules of origin, trade remedies, sanitary and phyto-sanitary
3 Framework Agreement on partnership and cooperation between the European Union and its member states, of the one part, and the Republic of the Philippines, of the other part, Brussels, 2011 4 http://www.businessmirror.com.ph/doing-ftas-with-the-european-union/
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measures, customs and trade facilitation, public procurement, intellectual property, competition, among others.5
With bilateral trade in goods amounting to EUR 12.5 billion in 2014, the EU ranked as the Philippines' fourth largest trading partner, while the Philippines was EU's sixth largest trading partner.
EU exports to the Philippines are dominated by transport equipment (30.9%), machinery (14.9%), food products (13.2%), chemicals (11.5%), and electronic components (11.3%). The Philippines’ main exports to the EU are office and telecommunication equipment (44.9%), machinery (15.1%), food products (12.5%), and optical and photographic instruments (11.1%).6
Bilateral trade in services between the EU and the Philippines reached EUR 4.2 billion in 2015, while EU foreign direct investment stock in the Philippines amounted to EUR 6.1 billion for the same year, making the EU the largest investor in the Philippines.
The Philippines’s major trading partners contributed a total trade worth US$ 101.2 billion or 78.5% of the total external trade in 2015. The Philippines’ major trade partners are Japan, China, US, Singapore and Hong Kong. Among the EU countries, Germany was the country’s top trading partner. In 2015, Japan was the largest trading partner of the Philippines.
The country’s top export products are electronics, other manufactured goods, machinery and transport equipment, woodcrafts and furniture, and ignition wiring sets plus other wiring sets used in vehicles, aircrafts and ships. The main products imported by the Philippines include electronics, mineral fuels and lubricants, transport equipment, industrial machinery and equipment, and other food and live animals.
5 http://business.mb.com.ph/2017/04/18/eu-not-prioritizing-second-round-of-fta-talks-with-ph/ 6 European Commission, Trade, The Philippines, ec.europa.eu
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2.4. Market Access
The Philippines has emerged as an attractive market for foreign companies due to its strong economic, democratic and demographic fundamentals. The country offers advantages in the form of manageable inflation, improving public finances, and a strong demographic dividend in a region of high growth.
An agent or distributor arrangement is the most common method in entering the Philippine market. Partnering with a local business is also recommended, as entering the Philippine market presents some challenges to foreign companies. This is due in part to the limited number of family-owned conglomerates that dominate key sectors and, in some cases, create high barriers to entry.
An open economy, like the Philippines, allows 100% foreign equity in all areas of investment except those reserved for Filipinos under the Philippine Constitution and existing laws, such as private lands, mass media, and small-scale mining. The country also supports Build-Operate- Transfer (BOT) investment schemes that other Asian countries emulate.
Foreign investments are encouraged by the Philippine government to fuel economic growth. According to the National Statistical Coordination Board, the total approved foreign investments in the Philippines for the year 2015 amounted to PHP 245.2 billion (EUR 4.6 billion), an increase of 31.2% from the previous year.
The Philippines is located right in the heart of Asia – today the region with the fastest economic growth. It is located within four hours’ flying time from major capitals of the region such as Singapore, Beijing, and Bangkok. Sited at the crossroads of the eastern and western business, it is a critical entry point to over 500 million people in the Association of Southeast Asian Nations (ASEAN) market and a gateway of international shipping and air lanes suited for European and American businesses.
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2.5. Business and Competitive Environment
The Philippines gained 4 positions from 103rd to 99th in the latest Doing Business Rank report of the World Bank for 2017. According to the World Bank, the country remains a good place as far as doing business is concerned but it needs to further accelerate its reforms to address tougher competition.
The Philippine government has created a task force composed of various government agencies to streamline processes that will improve the country’s rank in terms of ease of doing business. This includes processes for starting a business, paying taxes as well as social payments.
Ease of Doing Business in the Philippines 2016 Rank 2017 Rank Change in Rank Starting a business 164 171 - 7 Dealing with construction permits 103 85 + 18 Getting electricity 30 22 + 8 Registering property 109 112 - 3 Getting credit 109 118 - 9 Protecting minority investors 136 137 - 1 Paying taxes 120 115 + 5 Trading across borders 93 95 -2 Enforcing contracts 136 136 / Resolving insolvency 54 56 - 2 Table 1: Ease of Doing Business in Singapore Source: World Bank
In terms of global competitiveness, the Philippines ranked as the 57th most competitive country in the world (out of around 140 economies) based on the Global Competitiveness Report of the World Economic Forum (WEF) for 2016.
The country also has the Board of Investments (BOI), an attached agency of Department of Trade and Industry, which assists investors to venture into desirable areas of economic activities in the country.
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3. Market Overview & EU Entry Opportunities in the Philippines
3.1 The Green Energy Technologies Sector in the Philippines
3.1.1 Overview of the Energy Sector
Demand for energy is soaring in the Philippines, driven by strong, sustained economic growth, along with a rise in consumption and increasing industrial activity. The country has a total installed capacity of 21,423 MW as of 2016, and is heavily reliant on coal-fed and diesel-fired power plants, which accounts for approximately half of its total energy supply.
Figure 2: Electricity Supply, 2016 Source: Department of Energy, Philippines
Over the past decade, the Philippines has transformed into a regional powerhouse for renewable energy. In 2016, the country ranked 23rd in Ernst & Young’s Renewable Energy Country Attractiveness Index. With abundant sunlight, land and water resources, and its strategic location in the Pacific Ring of Fire, the Philippines has leveraged on its geological assets to become a pioneer in South East Asia to harness renewable energy for its domestic use. Today,
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renewable energy accounts for 32.5% of the country’s total energy mix, which translates to 6,969 MW, with hydropower and geothermal energy as the major renewable energy sources.7 Sustainable resources, however, such as wind, biofuel and tidal energy remain largely unutilised, as there is insufficient regulatory support of investments into these segments of the energy sector.
According to the World Bank, over 80% of the total population and more than 95% of all communities have access to modern electricity services in the Philippines. The government is currently seeking to improve the efficiency of these services through private sector involvement.
The Electric Power Industry Reform Act (EPIRA) was approved by Congress in 2001 to ensure quality, reliability, security, and affordability of the supply of electric power. It resulted in a complete restructuring of the energy sector in the Philippines.
Figure 3: Industry Structure prior to the Electric Power Industry Reform Act (EPIRA) Source: Department of Energy, Philippines
7https://www.doe.gov.ph/sites/default/files/pdf/energy_statistics/summary_2016_power_statistics_final_march_27_2017.pdf
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Figure 4: Industry structure under Electric Power Industry Reform Act (EPIRA) Source: Department of Energy, Philippines
Further restructuring of the industry is expected, as the Philippines’ Energy Regulatory Commission is pushing for Retail Competition and Open Access (RCOA), which will cover the transition of end users and restrictions on distribution utilities migrating to an open electricity market. Currently, only contestable customers with at least one megawatt (MW) demand are allowed to choose their own suppliers of electricity, on a voluntary basis. Starting 26 June 2017, the threshold for contestable customers is expected to be lowered to 750 kilowatts, and further lowered to 500 kilowatts by 26 June 2018, subject to the review of the performance of the retail market by the Energy Regulatory Commission (ERC). 8 There is some uncertainty if the new rules will be implemented in June 2017, as regulations issued by the ERC and the Department of Energy covering RCOA have been on hold after several entities sought and secured a temporary restraining order from the Supreme Court earlier this year.
8 http://www.philstar.com/business/2016/05/20/1584907/erc-clears-final-rules-retail-competition-open-access
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Figure 5: Industry Structure under RCOA Source: Department of Energy, Philippines
The energy sector in the Philippines is largely driven by the private sector, with the green energy sector dominated by large companies such as EDC, First Gen, and Aboitiz Power in large infrastructure projects.
Revenue Generating Company (€ million) Capacity First Gen 1,701.7 2,950 MW Largest Philippine power generation company Aboitiz Power 1,587.5 2,530 GW Heavy presence in hydroelectric power generation Energy Development Corp (EDC) 640.4 1,170 GW World’s second largest geothermal plant National Power Corporation 177.9 1,740 GW Government owned corporation; generates and distributes electricity
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Revenue Generating Company (€ million) Capacity Ayala Corporation Energy (AC) 52.8 1,000 GW Owns 3 major wind and solar farms Global Green Power PLC Corporation 15.3 420 MW Largest biomass power generator locally PetroEnergy Resources Corporation (PERC) 2.1 151 MW New department for geothermal, wind, and solar power Helis Solar Energy Corp 1.9 132 MW Largest solar energy facility in South East Asia Table 2: Key Players Source: BMI, Department of Energy, Company Annual Reports 2015
The power supply system in the Philippines is divided into 3 grids: Luzon, Visayas and Mindanao, each with a distinct power supply to support regional demand. The National Grid Corporation of the Philippines (NGCP), a privately-owned corporation, is in charge of operating, maintaining, and developing the country's state-owned power grids. Only the Luzon and Visayas grids are interconnected, while the Mindanao grid stands alone. The Luzon grid supplies electricity to Metro Manila, the largest power-consuming area, and regularly suffers power outage incidents, as well as yellow and red alerts. A yellow alert status means that contingency reserves are below the minimum level set by the regulator but does not necessarily lead to power outages while a red alert means there is severe power deficiency.
The majority of urban areas are receiving electricity distributed by private owned utilities companies such as the Visayan Electric Company and Manila Electric Company (MERALCO) whereas electric cooperatives such as Ilocos Norte Electric Cooperative, Inc and Aurora Electric Cooperative, Inc. supply to the rural areas that are connected to the grid.
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Independent power producers and electric cooperatives provide electricity to areas not connected to the NGCP. It is not an economically viable alternative to expand the grid to the more remote islands, which are inaccessible to larger electric-grid infrastructure. The load characteristics of most of these islands do not economically justify establishing connections to main grids via submarine or overhead cables. Instead, these islands are often served by mini-grids powered by generators fuelled by imported diesel and bunker oil. Many small island grids served by diesel generators suffer from rolling blackouts and unplanned power outages as a result of grid instability, inadequate generation capacity and lack of subsidised fuel.
In the 2012-2030 Philippine Energy Plan, the government outlined the major pillars in its Energy Reform Agenda (ERA). These include:
Ensuring energy security through the development of indigenous energy such as renewable energy and hydrocarbon fuels (oil, gas, and coal);
Achieving an optimal energy pricing in electricity and oil; and
Developing a sustainable energy system through the formulation and updating of national plans and programmes on energy development, which are consistent with the country’s economic development plans.9
The Philippines hopes to attain energy savings that is equivalent to 15% of annual final demand relative to business-as-usual (BAU) by year 2020. In the national energy roadmap, the government aspires to add at least 20,000 MW of renewable energy capacity by 2040 by promoting investment into the sector as well as by promoting technological innovation through Research and Development (R&D), demonstration and deployment.
A boost was given to the energy sector in February 2017, when President Duterte signed the 2017 Investment Priorities Plan, which lists energy as one of the 10 approved sectors under the plan.10 The government is now finalising the general policies and guidelines that will help to propel the growth of investment into the sector. As part of an ambitious economic plan termed
9 https://www.doe.gov.ph/pep/philippine-energy-plan-2012-2030 10 http://www.bworldonline.com/content.php?section=Economy&title=duterte-signs-2017-investment-priorities-plan&id=141769
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“Dutertenomics”, the government envisages massive spending to build new infrastructure over the next few years, which will include the building of Liquefied Natural Gas (LNG) terminals, pipelines and gas-fired power plants. The Duterte administration is also pushing for the establishment of more than 20 coal-fired power plants as a short-term solution to maintain the national baseload energy supply.
As the demand for energy is growing significantly in the Philippines, the use of conventional energy fuels such as coal, oil and gas remains intensive, despite the country’s rich sources of renewable energy sources. Driven by its need for energy security and to manage costs, it has adopted a two-pronged approach towards its energy needs: the first is to continue and even intensify its use of fossil fuels, both locally sourced and imported, and the second is to continue developing the renewable energy sector.
On average, nearly half the country’s primary energy supply is imported.11 The Philippines is a net importer of oil for transport; its net oil import bill amounted to US$ 6.78 billion in 2016.12 The country has to import coal from neighbouring Indonesia for power generation, as it consumes more coal than it can produce.
The Philippines has one offshore gas field, the Malampaya field, which produces around 13 mmscf13 of natural gas daily, but is projected to be depleted by 2024. There are two major offshore areas that potentially hold the key to substantial gas reserves which could meet the Philippines’ domestic and industrial power needs. The first is located off Luzon Island’s eastern seaboard known as the Benham Rise, and the second area is the disputed Spratly Islands chain situated in the West Philippine Sea. To sustain the gas-fired power plants that are currently running on Malampaya gas, the country is planning to build a US$ 2 billion receiving and distribution facility for imported LNG.
Due to the volatility of fossil fuel prices and the high cost of generating electricity in the Philippines, the government is attempting to increase the exploitation of its renewable energy sources. It is
11 http://www.irena.org/menu/index.aspx?mnu=Subcat&PriMenuID=36&CatID=141&SubcatID=3829 12 https://www.doe.gov.ph/downstream-oil 13 Note: mmscf refers to million standard cubic feet, a unit to measure gas production
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also keen to address its energy security challenges and to have a steady and continuous power supply for its citizens. Over the years, various laws have been passed and initiatives launched to support the use of renewable energy in the country:
The Electric Power Industry Reform Act (2001), which promotes the use of local and sustainable energy sources to replace imported fossil fuel sources
The Biofuels Act (2006), which encourages the use of biomass fuels
The Renewable Energy Act (2008), which accelerates the exploration, development and utilisation of renewable energy resources in order to enhance the country’s energy security, thereby lessening its heavy dependence on fossil fuels and reducing electricity rates. Its generous incentives included an income tax holiday for power companies in the first seven- years of commercial operations; low corporate tax of 10% for the subsequent 25 years; duty- free import of machinery and zero value added tax (VAT); a special real estate tax rate of less than 1.5%; accelerated depreciation of assets; tax exemption on carbon credits; and tax credits on domestic capital equipment and services14. It should be noted that this Act introduced various schemes, such as the Feed-in-Tariff (FIT) system, Renewable Portfolio Standards (RPS), Green Energy Option and Net Metering scheme. Of these, only FIT and net metering have been implemented.
The Climate Change Act (2009), which provides a legal basis for the tackling of climate change through sustainable development
The National Renewable Energy Programme (2011), which aims to steer the country in achieving the goals laid down under the Renewable Energy Act of 2008. It sets targets for each renewable energy source including solar, wind, geothermal, hydro and ocean technologies within the timeframe 2011 to 2030. It targets to more than triple the country’s renewable energy-based installed capacity to 15,234.30 MW by 2030.
In 2012, the Philippines engaged with the United States Agency for International Development (USAID) to further support the nation in the development of renewable energy
14 https://www.oxfordbusinessgroup.com/overview/hungry-more-growing-demand-leading-new-power-solutions
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under various programmes such as the Philippines Climate Change and Clean Energy Project (CEnergy) and the Enhancing Capacity for Low Emission Development Strategies (EC-LEDS) programme.
Interestingly, the Philippines has one of the highest electricity rates in Asia, a fact that has encouraged investment, particularly in the lowest cost power supply option, which are fossil fuel plants. Developers consider fossil power plants to be secure investments as they have strong government backing, and the fuel costs are adjusted based on the Newcastle Price Index and automatically passed on to the consumers.
The Philippines’ Feed-in-Tariff (FIT) system, which is presently under review, grants preferential rates for electricity sales for qualified renewable energy producers, and has been crucial in attracting private investment into the sector. All developers applying for FIT eligibility are vetted, and approved or declined on a first-come-first-served basis regardless of the size of their project. It should be noted that the power plants have to be built first before the developers can apply for incentives. The system aims to accelerate renewable energy development in the country, and incentivise renewable energy developers by providing them with a guaranteed power rate for the electricity they produced, a long-term contract and priority connection to the grid. To fund the incentive, every electricity consumer pays a uniform FIT rate which is factored into the computation of his monthly power bill.
When the FIT system was first introduced, power developers rushed to qualify for FIT to get the first round of certifications. Initially, it guaranteed a rate of P8.53 and P9.68 for every kWh produced by a qualified wind and solar project, respectively. The FIT was later revised downwards for the second round to P7.40 per kWh for wind and P8.69 per kWh for solar to reflect technology improvements and cost reductions. After two rounds, the Department of Energy had already exceeded the target allocations for both solar and wind, and as an effect of the increased number of renewable energy providers that were owed incentives, consumers have seen very fast adjustments in the FIT rates charged to them. This has, to some extent, led to the perception among consumers that renewable energy is expensive and not competitive.
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Unlike solar and wind, the FIT allocation for biomass and run-of-river technologies remain undersubscribed three years after the programme’s implementation. Originally, run-of-river hydro was approved at a rate of PHP 5.90 per kwh (EUR 0.10267 per kwh) and biomass with a rate of PHP 6.63 per kwh (EUR 0.11537 per kwh). Each technology was allotted an installation target of 250 MW each. The FIT rates have already been lowered to PHP 5.8705 per kwh (EUR 0.10216 per kwh) for run-of-river hydro and to PHP 6.5969 per kwh (EUR 0.11480 per kwh) for biomass effective this year. As of end-December 2016, a total 28.6976 MW has been taken up by existing run-of-river hydro projects while 144.80 MW has been consumed by completed biomass plants. The FIT allocation for biomass and run-of-river technologies are set to expire by end 2017, and there is some uncertainty if they will be extended.15
The Duterte administration has made the reduction of electricity rates its main focus. The Department of Energy has initiated a study of all the components of the electricity consumer's bill to seek ways to reduce costs. As a result, electric utility line losses, distribution and transmission charges, universal charge and the FIT are all under review. There is a possibility that the FIT system will not be expanded into another round since this adds burden to consumers and runs against the agency’s goal of bringing down the power rates.
Instead of a FIT system, the government is now supporting the implementation of a new scheme that was part of the Renewables Energy Act 2008, which was never implemented. This is the Renewable Portfolio Standards (RPS), which aims to drive renewable energy development and the fulfilment of binding low-carbon and renewable energy targets. Until a decision is made, development of renewable energy, particularly wind and solar, is nearly at a standstill in the near-term due to the current policy vacuum. There are also concerns that full implementation of RPS and a new procurement policy will take around two years, giving way for other developers to put up more thermal power generation to meet growing power demand, while solar and wind developers are left behind.
15 http://www.philstar.com/business/2017/05/26/1703529/renewable-energy-developers-seek-fit-extension
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Apart from reviewing the whole power sector, the Department of Energy has laid down a new energy mix that will not put a limit on any technology to foster competition so that the country will have adequate and reliable electricity supply moving forward. The energy mix is in the form of 70% baseload, 20% mid-merit and 10% peaking.16 Baseload power plants can provide the minimum level of demand in a power grid over 24 hours while mid-merit plants are those that can fill the gap between baseload and peaking plants which run during peak hours.
2017 has seen further developments and initiatives to boost the renewable energy sector. The government, through the National Economic and Development Authority (NEDA) Board, officially approved the Philippines Development Plan 2017-2022 (PDP) in February 2017. Through the PDP, the Department of Energy has started a self-assessment process to reach its goal of adding at least 20,000 MW of renewable energy capacities by 2040. It is also moving towards developing regional energy plans for more responsive strategies that are tailored to the specific needs of and available resources in individual regions of the country.
In March 2017, after months of threatening not to honour the agreement, President Duterte finally signed the Paris Agreement on Climate Change, which was ratified in the same month by the Philippine senate. While not a major emitter, the Philippines has committed to reduce carbon emissions, conditionally, by 70% from business-as-usual under COP21 by 2030.
In May 2017, the Philippine Department of Energy rolled out the Energy Efficiency & Conservation Roadmap 2017-2040. In this framework, it explains the government’s direction to accelerate the usage of renewable energy in the country.17 The framework is classified into three terms – Short Term (2017-2018), Medium Term (2019-2022) and Long Term (2023-2040). Its short-term targets with respect to accelerating renewable energy positioning in the Philippines include the following:
1. Review and update 2011-2030 National Renewable Energy Programme (NREP);
16 http://www.bworldonline.com/content.php?section=Economy&title=doe-dumping-fuel-mix-policy-boosts-baseload-competition-&id=137292 17 https://www.doe.gov.ph/pep/renewable-energy-roadmap-2017-2040
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2. Monitor and assess Renewable Energy Service/Operating Contracts awarded for the conversion of indicative renewable energy projects to committed projects; 3. Finalise rules and implement the Renewable Portfolio Standards, which mandates power industry players to produce and source a certain percentage of electricity from renewable energy sources; 4. Finalise rules and implement the Green Energy Option, a programme which provides end-users the option to choose renewable energy resources as their sources of energy; 5. Conduct detailed renewable energy technology and resource assessment; and 6. Review other renewable energy policy mechanisms.
The targets are vital for new investors and industry players as under this framework, the Philippines is targeting to increase its renewable energy installed capacity to 15,304 MW of installed capacity by 2030, and at least 20,000 MW by 2040. Once targets 3 and 4 are met, there will be a more compelling environment for new investors to develop renewable energy together with the government.
3.1.2 Key Agencies & Associations
Energy Regulatory Commission (ERC)
Created under the Electric Power Industry Reform Act (EPIRA) of 2001, the ERC is an independent and quasi-judicial five-man regulatory body which ensures that the objectives of power reform such as greater competition, improved services, customer choice and lower power rates are achieved.
Department of Energy
The Philippines' Department of Energy is the executive department of the Philippine Government, and is responsible for preparing, integrating, coordinating, supervising and controlling all plans, programmes, projects and activities of the Government relative to energy exploration, development, utilisation, distribution and conservation.
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National Power Corporation
The National Power Corporation (Napocor) provides power for the nation of the Philippines. The state-owned utility builds and operates nuclear, hydroelectric, thermal, and alternative power-generating facilities and works with independent producers under a build-operate-transfer programme. Its transmission network has a line length of nearly 13,000 circuit miles. With energy sales of more than 39,350 GWh per year, Napocor distributes electricity to power distributors and industrial companies. To comply with a sweeping privatisation bill, the company has begun selling off its generation assets. It has also separated its transmission segment into an operating subsidiary.
PNOC Renewables Corporation
PNOC Renewables Corporation is a fully-owned subsidiary of the Philippine National Oil Company (PNOC), and is the primary agency of the government in the development and implementation of Renewable Energy and Energy Efficiency programmes in the Philippines. It develops and implements projects such as solar, wind, hydro, biomass and geothermal in the country. Some of the newer projects it manages include the 1,000 kW Rizal PRIS MC Hydropower Project, the 500 kW Munoz Hydro Power Project, the Pacuan-Guinobaan Hydropower Project, amongst others.
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Philippine Rural Electric Cooperative Association (PHILRECA)
The Philippine Rural Electric Cooperatives Associations, Inc. (PHILRECA) is the national organisation of 121 electric cooperatives (ECs) operating in the Philippines. It was established in 1979 as the representative voice of the country’s electric cooperatives (ECs). PHILRECA is working closely with the National Electrification Administration (NEA) to provide developmental assistance to its member-electric cooperatives, especially on EC’s external funding to achieve institutional viability and optimum service.
Philippine Solar Power Alliance (PSPA)
The Philippine Solar Power Alliance (PSPA) is a non-profit organisation founded in 2010. As an Alliance that was formed during the formulation and development of Philippines’ Renewable Energy Policy, PSPA is very active in providing policy consultations on the implementation of Rules and Regulations of Renewable Energy Law. Among its objectives are to reduce the risk associated in PV solar development so as to fast track its growth in the country. The Alliance members comprise cell manufacturers, project developers, producers, installers and off-takers, while individual members include those in the academic community interested in harnessing the power of solar energy.
Private Electric Power Operators Association (PEPOA)
The Philippine Electric Power Operators Association (PEPOA) was incorporated in 1955 as a non-profit organisation. It consists of 15 private electric utilities all over the country. Its objectives include maintaining a high standard of electricity services; promote contact and close relations among the electric utility owners; foster cooperation between them and the Energy Regulatory Board and other related government agencies, among others.
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Renewable Energy Association of the Philippines (REAP)
The Renewable Energy Association of the Philippines (REAP) is a non-profit organisation of companies and private individuals committed to the development, promotion, utilisation and commercialisation of renewable energy technologies and systems nationwide. The association provides a platform for key players in the private energy sector to discuss issues and pursue matters of common interest.
The Philippine Independent Power Producers Association, Inc. (PIPPA)
The Philippine Independent Power Producers Association, Inc. (PIPPA) is a professional organisation of independent power producers (IPPs) formed in 1995 to provide adequate, reliable and affordable supply of electricity to Filipino homes and industries. PIPPA provides a platform for its members to exchange information on policies affecting the electric power industry. It also serves as the industry’s voice in advancing public policy that will be beneficial not only for its members but, more importantly, for the Filipino consumers. Collectively, PIPPA’s members have 82.8% (13,549.40 MW) of grid installed capacity and serve millions of Filipinos in Luzon, Visayas and Mindanao.
3.1.3 Entry Strategies
The Philippines has the most comprehensive renewable energy legislation in South East Asia. It is estimated to own 47% of total primary energy supply market share across ASEAN.18 Blessed with an abundance of renewable energy resources, the Philippines offers excellent opportunities for European companies operating in the renewable energy sector. European companies may enter the Philippines market through:
Partnerships and joint ventures
Tendering opportunities
18 http://re-guidelines.info/
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Collaboration with local research institutes
Tradeshow participation
Partnerships and Joint Ventures
The Philippines Government is keen to attract foreign investment into the green energy sector. Foreign companies looking to invest in the Philippines may wish to consider forming joint ventures (JV) with local players. For a JV company to be established in the country, at least 60% of ownership must be by a Filipino. A JV is advantageous as it enables foreign companies to expand their distribution capacity and local service providers may assist in providing maintenance and after-sales services. This is useful for European companies seeking to gauge their product’s potential in the wider South East Asian market.
Tendering Opportunities
Moving towards good governance and transparency in procurement, the Philippines Government has developed an online platform known as Philippine Government Electronic Procurement System (PhilGEPS), which can be accessed at www.philgeps.gov.ph
In PhilGEPS, all government tenders are announced and companies may submit their bids accordingly. Foreign companies are usually allowed to bid for tenders, if this is not the case it will be clearly stated. In some cases, foreign companies may participate in a tender through a joint venture company with at least 60% ownership by a Filipino company.
Collaboration with Local Research Institutes / Universities
The Philippines has more than 30 universities that are directly involved in renewable energy research. Some of the universities are working with the Philippines Government through various agencies including the Department of Energy and the Department of Science and Technology or with corporates such as Alternergy Philippine Holding Corporation.19 European companies may
19 http://www.ateneo.edu/ls/sose/ateneo-innovation-center/wind-and-energy-projection-philippines-0
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consider collaboration opportunities with local research institutes or universities to develop and further enhance their technologies to match the local geography and requirements.
Tradeshows
Power & Electricity World Philippines is the Philippines’ largest energy event organised annually. It gathers more than 8,000 stakeholders, including policymakers, regulators, local industry heavyweights, international energy experts and many others. This event is a congress focusing on investment, development and partnership for the power, energy and utility industries in the country. The upcoming event will be held on 23 – 24 May 2018 at SMX Convention Centre, Manila, Philippines. The Solar Show Philippines 2018 will be co-located with the event.
Other power and energy tradeshows are:
Philippines Power & Electricity Week (18-21 July 2017)
ASEAN Solar + Energy Storage Congress & Expo (14-15 November 2017)
3.1.4 Challenges & Entry Barriers
In line with its objective to have a sustainable energy supply, the Philippines also continues to develop its renewable energy sector to add to its energy mix. However, there remain several challenges for foreign companies and investors to participate in the Green Energy Technologies sector in the country. Some of these include:
Geographical spread & Poor infrastructure
First-come-first-serve basis for renewable energy incentives
Difficulty in accessing financing
Strong Competition
Uncertain Regulatory Climate
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Geographical Spread & Poor Infrastructure
Ensuring sustainable energy supply in the Philippines is challenging due to its vastly spread islands. The three main geographical divisions – Luzon, Visayas and Mindanao – have their own main power grids. Nevertheless, only the grids of Luzon and Visayas are connected to each other to ensure a reliable back up to Metro Manila located in Luzon. Plans are made to connect the grids of Visayas and Mindanao by 2020, but the majority of independent power producers and electric cooperatives are unable to achieve this due to the geographical spread challenge.
As a mountainous archipelago, the Philippines struggles to provide total electrification to its rural areas. Developing certain renewable energy resources can be challenging as they are located in inaccessible areas that need additional infrastructure development. The World Economic Forum ranks the Philippines as being in 112th place in its Global Infrastructure Competitiveness Ranking Competitiveness Ranking 2016/2017, making it among the country with the poorest quality of infrastructure.
No. Indicator Ranking (out of 138)
1. Quality of roads 106 2. Quality of railroad infrastructure 89 3. Quality of port infrastructure 113 4. Quality of air transport infrastructure 116 5. Quality of electricity supply 94 6. Fixed telephone connectivity 65 7. Mobile telephone connectivity 107 Overall 112
Table 3: Global Infrastructure Competitiveness Ranking 2016/2017 Source: World Economic Forum The fact that the Philippines is geographically located in an area prone to typhoons, volcanic activities and earthquakes also adds to the challenges.
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Strong Competition
The Electric Power Crisis Act of 1993 and the Expanded Build-Operate-Transfer (BOT) Financing Law of 1994 allow independent power producers to deal directly with distribution utilities and bypass the National Power Corporation grid. Thus, power generation has now become a competitive segment of the industry.
Large local companies that are in the coal-fired power generation sector, such as Aboitiz Power, are now diversifying into renewable energy, and competing for the limited pool of FIT capacity. With their substantial financial resources, they are shutting out smaller firms that have historically been significant drivers pushing the development of renewable energy in new markets.20
Difficulty in accessing financing
In a developing country like the Philippines, local banks do not have a strong capital base; hence do not have the muscle to give out big loans on big-ticket financing such as the power sector. As such, it is difficult for foreign companies to raise financing in Pesos from local banks and have to opt for more expensive financing denominated in foreign currencies. Most financing in the sector comes from the private sector: banks through debt, and investors through equities.
Uncertain Regulatory Climate
Under President Rodrigo Duterte, longer-term prospects for renewable energy look unclear, as the government contemplates how to reduce electricity costs for the consumer. The Department of Energy has not yet announced feed-in-tariff (FIT) rates for certain renewable energy sectors. Some developers have put projects on hold, until there is more certainty on the FIT.
20 https://www.oxfordbusinessgroup.com/overview/hungry-more-growing-demand-leading-new-power-solutions
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3.2 Wind
3.2.1 Market Overview
The Philippines sits on the western rim of the Pacific Ocean, a vast expanse of deep, warm ocean water. As it is comprised of more than 7,000 islands, many of them mountainous which drop sharply to coastal areas, it is often exposed to strong winds. Wind mapping results indicate that many areas have good-to-excellent wind availability throughout much of the Philippines. While wind resource in Philippines is strongly dependent on latitude, elevation, and proximity to the coastline, in general, the best wind resource is in the north and northeast of the archipelago. More than 10,000 km2 of windy land areas are estimated to exist with good-to-excellent wind resource potential.21 According to the World Wind Resource Energy Assessment (WWEA) Report by the WWEA Technical Committee22, the wind power potential in the Philippines is 173.6 GW at 30 m height23, which is higher than a Class 3 wind resource and suitable for most utility scale wind turbine applications.
Total Wind Wind Power Wind Speed Total Area Capacity Total Power Resource (W/m2) (m/s) (km2) Installed (GWh/Year) Utility-Scale (MW)
Good 300 – 400 6.4 – 7.0 5,541 38,400 85,400 Excellent 400 – 500 7.0 – 8.0 2,841 19,700 52,200
Excellent 500 – 700 8.0 – 8.8 2,258 15,600 47,900
Excellent 700 – 1,250 8.8 – 10.1 415 2,900 9,700 TOTAL 11,055 76,600 196,200
Table 4: Philippines – Wind Electric Potential Source : National Renewable Energy Laboratory (NREL) 2014
21 Wind Energy Resource Atlas of the Philippines, D. Elliott, M. Schwartz, R. George, S. Haymes, D. Heimiller, G. Scott, 2001, NREL/TP-500- 26129 22 http://www.wwindea.org/wp-content/uploads/filebase/technology/WWEA_WWRAR_Dec2014_2.pdf 23 Note: Assumptions are based on 500 kW 40 m HH 38 m Rotor Diameter, turbines at 10D x 5D spacing at 6.9 MW/km2, and a turbine height of 30 m. For the Philippines, NREL chose the 30-m height above ground as a compromise hub height between large utility-scale wind turbines and small wind turbines for rural power applications.
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Given that the Philippines has good resources for wind energy, the country is interested to harness it for electricity generation. Wind energy was first commercialised to generate electricity in the Philippines in 2005, the very first farm being the Bangui Wind Farm in Bangui, Ilocos Norte in the northern region of Luzon. This project was spearheaded by NorthWind Power Development Corporation and today consists of 20 Vesta wind turbines that generate a total of 33 MW.24 Support facilities include a 5.7 km 69 kV transmission line from the plant to Laoag City and a 30 MVA 13.8/69 kV substation, according to official information.
Today, Windmills supply 40% of Ilocos Norte’s electricity through its connection to the Luzon Grid, delivering power via Transco Laoag and reaching households as far south as Badoc and Pinili via the Ilocos Norte Electric Cooperative.
Figure 6: The Bangui Wind Farm
Besides the Bangui Wind Farm, the country has a number of other large wind farms which include the Burgos Wind Farm, Caparispisan Wind Farm, Mindoro Wind Farm, among others.
24 https://www.doe.gov.ph/energist/index.php/about-ener-gist/97-categorised/energy/energy-resources/renewable-energy/wind-energy/11293- ilocos-norte-s-windmills-tourism-and-energy-giants
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As of 2016, wind energy has generated 975 GwH, which accounts for 1.1% of total power generated by renewable energy sources in the Philippines, far below the actual potential in the market.25 Nevertheless, with technology innovations and market building incentives helping to dramatically lower costs and significantly improving system performance, renewable energy could provide the Philippines with promising solutions if the enabling environment were further developed.
Previously, in the National Renewable Energy Programme (NREP), the Philippine Government had set a target to generate 2,345 MW via wind energy by 2022. This plan has been superseded by the Philippine Development Plan 2017 – 2040, which sets a new target for the total renewable energy power generation to reach at least 20,000 MW by 2040. The breakdown for wind energy resource contribution has not as yet been identified.
The Department of Science and Technology (DOST) is utilising its Light Detection and Ranging (LiDAR) technology to map out possible renewable energy resources through a project known as the PhiLiDAR project. The objective of the project is to determine the feasibility of establishing solar and wind farms in select areas of the country based on the data and information obtained through LiDAR technology.
Local Companies
Alternergy Sembrano Wind Corporation26
Alternergy is a power company focusing in renewable energy in Philippine. It was established in 2001 and it is one of the prominent wind energy plant producers in the country. Alternergy is listed as one of Board of Investment (BOI) registered enterprises and it is entitled for incentives stipulated in the Philippine’s Renewable Act 2008.
In 2009, Alternergy was awarded with three wind energy projects in the Pililia municipality of the Rizal Province, in Kalayaan Island of the Palawan Province and in Abra de Ilog of the Occidental
25 https://www.doe.gov.ph/sites/default/files/pdf/energy_statistics/summary_2016_power_statistics_final_march_27_2017.pdf 26 http://thestandard.com.ph/business/196150/3-wind-plants-seen-to-generate-165-mw-by-2017.html and http://www.alternergy.com/pp.php
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Mindoro Province. Wind farms in Pililia and Kalayaan have a combined installed capacity of 40 MW, and cover 4,515 hectares and 1,944 hectares respectively. The Abra de Ilog Wind Power project, which is the largest, covers 18,711 hectares and produces 30 MW of power. Alternergy’s most recent wind energy project is the Sembrano Wind Power Project, which is formerly known as Phase 2 Mabitac Wind Power Project. This project is expected to be commissioned in June 2018.
Energy Development Corporation (EDC)
Energy Development Corporation is a key player in the renewable energy sector in the Philippines. Apart from its interests in wind energy development, EDC is also the largest vertically- integrated geothermal developer and has interests in other renewable energy areas such as solar and hydropower. Through its wholly-owned subsidiaries, EDC Pagali Burgos Wind Power Corporation and EDC Pagudpud Wind Power Corporation, EDC has exploited wind energy power production in Burgos, Ilocos Norte, which has a generating capacity of 150 MW. EDC is also listed in the Board of Investment (BOI) registered enterprise to be eligible to receive incentives under the Renewable Energy Act 2008.
Energy Logics Philippines, Inc
Energy Logics Philippines, Inc. (ELPI), a renewable energy developer backed by Filipino, American, Korean and Japanese investors, is planning to invest US$ 2 billion in renewable energy projects over the next 10 years.
This year, ELPI is helping to boost power supply in the Luzon grid by constructing a 132 MW wind farm in Burgos, Ilocos Norte. The company has completed the Pasuquin Wind Farm project in the Ilocos Norte Province; which delivers 48 MW to the grid.
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AC Energy Holdings Inc.
AC Energy is a wholly-owned energy-focused holding The prospects for growth of the wind company of Ayala Corporation, with investments in energy sector in the Philippines are solar, wind, hydro and conventional energy sources. For strong, given that it has an estimated wind energy project development, it has formed a joint wind power potential of 76,000 MW, which has barely been exploited venture with UPC Philippines, Mitsubishi Corporation’s Diamond Generating Asia Ltd, called North Luzon Renewables. One of its projects include the 81 MW Wind Power Plant in Caparispisan, Pagudpud, Ilocos Norte, which has been in operation since 2014. Another subsidiary of AC Energy is Northwind Power, which owns and operates the Bangui Wind Farm.
3.2.2 EU Entry Opportunities
The Philippines is well able to take advantage of modern wind energy technology to generate more power, at a lower cost than ever before. This creates a real opportunity for the country to meet part of its growing electricity needs using competitive, independent, and clean wind energy.
The prospects for growth of the wind energy sector in the Philippines are strong, given that it has an estimated wind power potential of 76,000 MW, which has barely been exploited. As of mid- 2016, a total 55 Wind Energy Service Contracts have been awarded with a total potential capacity of 1,180.80 MW and installed capacity of 426.90 MW.
Wind energy is expected to become an important contributor to the Philippine energy market, with the government targeting to generate 2,345 MW by 2022 from wind energy alone.
Total Generating Capacity Term Target (MW) Short Term 2011 – 2015 200 Medium Term 2016 – 2020 700 Long Term 2021 - 2030 200
Table 5: Wind Energy Targets, 2011 – 2030 Source: Department of Energy, Philippines
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Currently, the Philippines imports technology required to generate wind energy. Imports of parts of non-electrical engines and motors (which includes wind turbine blades) in 2016 were valued at US$ 7.5 million. Belgium, Germany, France, the Netherlands and the UK rank among the top 10 suppliers of products that fall within this category to the Philippines, as can be seen in Table 38 under Section 5.3 Useful Statistics.
Imports of generating sets (wind power) into the Philippines amounted to US$ 253,000 in 2016, with China, Singapore and Finland being the top 3 source markets, as indicated in Table 40 in the same section.
There are opportunities to develop clean wind energy systems in the Philippines’ many islands that are not connected to the grid, given the rapidly declining costs and technological advances in wind energy and storage. Countless households in the country’s more remote islands still rely on mini-grids powered by generators fuelled by imported diesel and bunker oil.
European companies in the wind energy sector such as Gamesa, Vestas and Siemens are already present in the market. Having contributed substantially to developing the Philippines’ wind sector, they are able to lobby for a faster resolution of the current regulatory stalemate, to help unlock the wind energy pipeline of several hundreds of megawatts that can proceed once a clear policy is in place.
European Companies
Vestas / Vestas Wind Systems AS
Vestas is a Danish global energy company dedicated exclusively to wind energy. Its core business relates to the development, manufacturing, sale and maintenance of wind power plants – with competencies that encompass various aspect of the value chain.
One of the very first project that Vestas undertook in the Philippines was Bangui Wind Farm, which has a total capacity of 33 MW. It has been involved in various other wind energy projects. In 2013, Vestas received an order from the Energy Development Corporation Wind Power Corporation (an affiliate of the Energy Development Corporation) to deliver an 87 MW capacity wind power plant located at Burgos, in the Ilocos Norte province, and required installation of 29 units of the V90-3.0 MW turbine together with associated on-site civil and electrical works.
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The 150 MW Burgos wind farm in Ilocos Norte is the biggest wind farm in the Philippines and the first wind project nominated for the Philippine Government's feed-in-tariff (FIT) incentive scheme.
Jens Tommerup, President of Vestas Asia Pacific & China, had the following comment on the cooperation: “The Burgos order is the result of a very fruitful co-operation between EDC and Vestas. EDC’s technical experience from its local power project developments and its deep understanding of the requirements of the local electricity market, combined with Vestas’ vast knowledge of the design and delivery of successful wind energy projects globally and in the Philippines, has resulted in a well optimised project.”
Vestas is servicing 183 megawatts of wind projects in the country. Currently, the firm employs over 400 people in the Philippines, where Vestas Services Philippines and Vestas Shared Service are located. Its operations in the Philippines includes an IT hub, which supports its global team with IT operations including surveillance, service desk, operations, support and programming competencies.
Siemens Gamesa Renewable Energy
Siemens Gamesa Renewable Energy, formerly Grupo Auxiliar Metalúrgico, is a Spanish manufacturing company principally involved in the fabrication of wind turbines and the construction of wind farms. Gamesa develops, manages and sells wind farms, for which it also supplies wind turbines. It ranks among the largest wind turbine manufacturers in the world, having installed more than 10,000 MW of production capacity on four continents.
The company has an established presence in the Philippines, and collaborates with local partners for project installation. In 2014 Gamesa consolidated its presence with a turnkey contract for the construction of a 54 MW wind farm. Gamesa agreed to install 27 of its G90-2.0 MW turbines in the Pililla wind farm, located on the island of Luzon. The company also committed to provide operations and maintenance services at the facility for five years. Under the terms of the agreement, Gamesa also has to build the infrastructure needed to install and operate the facility, including a substation. The civil and electrical works are executed by Gamesa together with the local Philippine consortium CASA which is formed by Cendaur, Ati Consulting, Santa Clara and Airnergy.27
27 http://www.gamesacorp.com/en/communication/news/gamesa-consolidates-its-presence-in-the-philippines-with-a-turnkey-contract-for-the- construction-of-a-54-mw-facility.html?idCategoria=0&fechaDesde=&especifica=0&texto=&idSeccion=0&fechaHasta
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3.3 Solar
3.3.1 Market Overview
Solar energy is a key renewable energy source to the Philippines as the country has abundant sunlight. According to the National Renewable Energy Laboratory (NREL), the Philippines' average solar radiation ranges from 128-203 watts per square meter, or an average of 161.7 watts per square meter, based on sunlight duration. This translates to potential power generating capacity of 4.5-5.5 kWh per square meter per day.28 The country also has an industrial base which has the capability to produce semiconductors and other components needed to build solar farms.
Figure 7: Solar Irradiation across the Philippines Source: Solar Gis
28 https://www.giz.de/fachexpertise/downloads/giz2012-en-pv-in-the-philippines-policy-brief.pdf
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Since the introduction of the solar FIT scheme At the end of 2016, the Philippines has at the end of 2012, investment into the solar awarded a total of 150 grid-connected projects sector in the Philippines has been substantial. and 16 self-consumption projects, with a total By the end of 2013, more than 1,045 MW worth potential capacity of nearly 4,082 MW of Solar Energy Service Contract (SESC) applications submitted to the Department of Energy, of which an indicative total of 1,012.21 MW or 97% were awarded. This was despite the fact that the initial FIT Installation Targets were capped at 50 MW, which represented the solar target in 2012 (FIT Phase 1). To accommodate the overwhelming response from the private sector, and to address on-going concerns about energy security, the Department of Energy announced a second phase for solar FIT (FIT Phase 2) in April 2014, for an additional 450 MW, with the commissioning deadline of March 2016.
By the end of March 2016, a total of 818.24 MW from 29 projects across the Luzon, Visayas, and Mindanao island-groups have been completed and commissioned. Of these, only 526 MW of installed solar capacity have been granted FIT status. Those projects that have not been granted FIT status are selling to the Wholesale Electricity Spot Market (WESM), where rates have been reported to be in the range of PHP 3.50/kWh (EUR 0.06091/kWh) or 60% less than the FIT Phase 2 rate. Many power developers are hoping for a ‘FIT Phase 3’ for solar energy.
However, the Department of Energy recommends solar power developers to start working on their business models, which should be revolving around an auction system through a competitive selection process (CSP) and the enforcement of Renewable Portfolio Standards (RPS) in the renewable energy sector.
The Philippines had 903 MW of installed solar PV capacity under its Renewable Energy Law at the end of 2016, according to Department of Energy figures. Of this, 900 MW was grid-connected, with the remaining 3.2 MW in the self-consumption category. (The figures do not include 55 renewable energy-based projects installed under different laws.) Overall a total of 150 grid- connected projects and 16 self-consumption projects have been awarded, with a total potential capacity of nearly 4,082 MW.
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Figure 8: The Raslag Solar Power Project Source: Cogerny
The country continues to attract investment in the sector. Construction recently began on one of South East Asia’s biggest solar farms, a 150 MW solar PV project in Concepcion, Tarlac, in which 450,000 locally produced solar panels will be installed across 150 hectares. The Concepcion Solar Power Project will cost an estimated US$ 195 million, and produce enough power to fulfil the entire province’s needs. Most interestingly, this will be the first solar power project in Philippines which will be built at a cost lower than that of a coal-based power plant.
The boom in the solar sector has prompted investment into the solar panel sector. A solar panel factory, that has a production capacity of 600 MW per year, started operations in Santo Tomas, Batangas, in February 2017, marking the first time that solar panels will be produced by a Philippine-owned company, Solar Philippines.
Besides private sector involvement, the government also has, in collaboration with various development agencies, undertaken a number of rural power projects in the past two decades, focusing largely on solar PV systems. These are presented in Table 6.
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No. Project Name Partners Brief Description 1. USAID AMORE Project USAID, Barangay This project provided renewable energy Renewable Energy systems to remote off-grid communities in Community Development Mindanao affected by conflict and with no Associations electricity. It consulted with the relevant communities throughout project implementation, and organised and trained the barangay renewable energy community development associations. They were shown how to operate and maintain renewable energy systems and manage the community’s operation and maintenance funds, which it had raised itself. The profit earned from selling systems is reinvested in new systems. 2. Philippine Rural NPC - SPUG This project successfully provided electricity to Electrification Service 5,129 households in 108 barangays using PV Project systems and 12,183 households in 102 barangay using a diesel-fired mini-grid system. It was intended to be passed on to a Qualified Third Party upon completion in 2009. However, there was no interest in carrying the responsibility further. NPC-SPUG currently acts as an interim QTP for the Philippine Rural Electrification Service Project areas (Department of Energy, 2012) 3. Solar Power Technology Department of Agrarian This project is an integrated social fund and Support Project Reform, Government of agricultural support project. It used PV energy Spain systems as enabling technology for agricultural and rural enterprise development in agrarian reform communities. 4. Philippine National Oil Philippine National Oil This project aimed to distribute 15,000 solar Company Solar Home Company home systems. It bears 60% of the total cost of Distribution Project the system while the remaining 40% is paid by the end-users. The Philippine National Oil Company partnered with local microfinance institutions to help the beneficiaries pay for their solar home systems in instalments with minimal interest. Using this approach, the maintenance and upkeep of the solar systems were sustained.
Table 6: Government Collaboration Projects in the Philippines Source : IRENA
The Philippines Government is encouraging installation of solar panels on rooftops of residential and commercial buildings as this technology is becoming affordable with the declining price of solar panels. Rooftop solar energy generation is however, not taking off very rapidly in the Philippines as it is perceived to be expensive vis-à-vis grid electricity. Many homeowners are unfamiliar with the incentives in place to subsidise the cost of solar panels and the underlying policy support, especially solar net metering.
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Local Companies
Meralco Energy Inc
Meralco is the largest electric distribution company in the Philippines covering 36 cities and 75 municipalities, including Metro Manila. It has served Philippines for more than 100 years and has over 6 million customers across the country. The company’s market share is estimated to be 55% of the entire distribution market. Within Luzon, it is estimated that its share is approximately 74%.29
The natural-gas plants fueled by Malampaya provide around 40% of Meralco’s supply requirements. The rest are sourced from bilateral contracts with generation companies and the Wholesale Electricity Spot Market. In order to ensure continuous and reliable electricity for its customers, Meralco recently decided to source additional peaking capacity through bilateral power supply contracts with two solar power companies for a total of 100 MW.
Meralco launched a new subsidiary in January 2017, Spectrum, that will focus on renewables. The company unveiled its first solar rooftop project in partnership with Robinsons Mall as well as a solar gallery which showcases the end-to-end process of generating power via solar technology and highlighting the benefits of solar adoption in homes and businesses.
Solar Philippines Power Project Holdings
Solar Philippines (SP) is the largest developer of solar rooftop power plants in South East Asia. The company owns the Calatangan Solar Farm, the largest solar farm in Luzon with over 200,000 panels on a 160-hectare land, which is sufficient to power the entire Western Batangas in Luzon. SP also owns one of world’s largest solar factories located in Tanauan, Batangas, where it uses German technology to produce high-efficiency solar panels at the lowest possible costs. 30 SP has completed the initial 600-MW solar factory and will continue the development to reach its capacity of 2,000 MW.
29 http://www.philstar.com/business/2015/10/27/1515095/meralco-bond-issue-maintains-top-rating 30 In the Philippines, households pay on average between EUR 500 and EUR 900 for a solar panel system; the exact cost depends on the watt peak capacity.
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Solar Energy Philippines
Solar Energy Philippines (Solenergy) is among the first companies in the Philippines to show interest and desire in providing Filipinos with a more affordable and sustainable power alternative. It provides design, installation and maintenance for solar panels installed at its clients’ premises. Since its establishment, Solenergy has successfully installed solar panels at a number of premises, such as at the De La Salle University Rufino Campus, Robinsons Starmills, Century Pacific Food Inc., Gaisano Capital Mall, among others. It also provides off-grid hybrid power supply to its clients in the resorts sector.
PNOC Renewables Corporation
PNOC Renewables Corporation (PNOC RC) is a fully owned subsidiary of state-owned Philippine National Oil Company. PNOC RC has been mandated to promote and undertake research, development, utilisation, manufacture, sale, marketing, distribution and commercial application of new, renewable, non-conventional and environment-friendly energy sources and systems including solar, wind, water ocean, tidal, biomass, biogas, etc. PNOC RC builds projects in areas that private companies would not find financially lucrative. Its participation in development projects is as a joint venture partner or a participant in a public-private partnership. It also bids for projects posted in the government’s procurement system.
3.2.2 EU Entry Opportunities
The Philippines receives an average of insolation of around 4.5 to 5.5 kWh per m2 yearly. Although solar energy is currently the lowest contributor to the energy mix in the Philippines, the government anticipates it will play an increasingly larger role in the country’s mix of energy by 2030. The Philippine Government, in its NREP 2012-2030, is targeting a total of 350 MW of solar power generation, with 100 MW and 200 MW installed generation between 2016-2020 and 2021- 2030, respectively.
Solar energy has taken off in the Philippines relatively recently, since the introduction of FIT incentives in 2012. The relative lack of maturity of the industry in the Philippines provides opportunities in various areas, from panel manufacturing technology, to lucrative add-on
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areas such as project management, engineering, procurement, construction (EPC) and even finance.
The Philippines’ imports of photosensitive semiconductor devices (including photovoltaic cells) in 2016 were valued at US$ 212.8 million, with China accounting for 72.4% of total imports. Germany and Switzerland rank as the Philippines’ 10th and 11th largest source markets, with import values of US$ 1.125 million and US$ 411,000 from these markets respectively.
The Philippines has well-established capabilities in the manufacture of semiconductors. Its exports of photosensitive semiconductor devices (including photovoltaic cells) were valued at US$1.3 billion in 2016. Its largest export destinations in 2016 were Japan, the USA, and Mexico. Detailed statistics can be accessed in Tables 36 and 37 in Section 5.3 Useful Statistics.
While there is a strong competition when it comes to the building of plants, there is less when it comes to managing or monitoring solar installations for optimal performance. European companies with expertise in monitoring technology in power installations and that allows for efficient control of plant operations will find it easy to tap into the Philippines’ solar growth story.
As an archipelago of some 2,000 inhabited islands, conventional large-scale centralised power generation and distribution face the twin problems of distance and water separation. This has made power stations prohibitively expensive on all but the largest islands. By contrast, solar power generation can be scaled down to units as small as individual homes or businesses, removing the need for long distance power transmission infrastructure. With solar generation equipment prices falling and efficiencies rising, investing in solar is seen as increasingly attractive in the Philippines.
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European Companies
Conergy Group
Conergy is one of the world’s largest downstream solar companies, specialising in the design, finance, building and operation of solar systems for businesses and utility-scale power. Founded in 1998, the company pioneered the expansion of solar power internationally, and today combines innovative technology and industry-leading engineering with access to capital. The company is headquartered in Germany, and also has hubs in the USA and Singapore.
Conergy entered the Philippine market in 2013, and within just two years, Conergy, along with its local partners, completed a total of 274 MWp of solar capacity in the Philippines. Between September 2015 to March 2016 Conergy and its partners were building eight solar farms simultaneously across the country. Among these 8 projects was the 50 MWp Petrosolar plant in Tarlac which was built on a 55-hectare parcel of land in a record time of four and a half months.
Aside from the investor-friendly government incentives, Conergy attributes its success in the Philippines to the fact that the country is the fastest growing economy in South East Asia in terms of GDP growth, foreign direct investment and population growth.
Renewable Energy Corporation (REC)
Founded in Norway in 1996, Renewable Energy Corporation (REC) is a leading vertically integrated solar energy company. The company specialises in integrated manufacturing from polysilicon to wafers, cells, panels and turnkey solar solutions.
In 2015, REC Solar launched a certification scheme for installers of solar panels in the Philippines. The new scheme is aimed at promoting trust between local customers and local solar installers with only the best and most qualified being selected for REC Solar Professional status, setting them apart from other installers. Customers will benefit from the programme in the form of a consistently high standard among installers who use REC’s solar panels.
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In addition to training programmes and exclusive seminars aimed at building their technical and industry knowledge, installers certified as REC Solar Professionals benefit from an extended product warranty (an additional two years on top of the REC’s standard 10-year product warranty for installations up to 500 kWp, service fee for approved claims as well as access to sales and marketing tools that support their business success).31 The 5 companies that have been newly certified as REC Solar Professional Installers in May are Deco Sales, 3NERGY Corporation, SOWI Renewables Technologies, SOLAREADY and Green Asia Technologies.
Phoenix Solar AG
Phoenix Solar AG, that has its headquarters in Sulzemoos near Munich, is an international photovoltaic system integrator. The Group develops plans, builds and operates large-scale photovoltaic plants and on a smaller scale is a specialist wholesaler for turnkey power plants, solar modules and accessories. The company has subsidiaries on three continents, and has sold solar modules with an output of more than 1.3 GW since its founding. The stocks of Phoenix Solar AG are listed on the official market of the Frankfurt Stock Exchange.
In 2017, Phoenix Solar was awarded a contract to build four commercial PV rooftop systems on behalf of the Philippines real estate company Robinsons Land Corporation. The German company’s Manila based subsidiary, Phoenix Solar Philippines, is in charge of design, procurement, and construction of the four PV projects, totalling over 3 MW.
All four systems will be installed on RLC owned shopping malls and designed for an own use only. It is aimed that the PVs will be able to cover a significant part of the mall’s consumption during the daytime and also lower the country’s CO2 emissions. Completion and commissioning of the rooftop systems are scheduled for end of June 2017, as reported by the company. The order was signed after Phoenix Solar successfully completed two solar projects with a capacity of 2.5 MW atop shopping malls managed by RLC in 2016.32
31 http://www.recgroup.com/en/rec-rolls-out-industry-leading-certification-program-solar-installers-philippines 32 https://www.pv-magazine.com/2017/01/26/phoenix-solar-awarded-rooftop-pv-contract-in-the-philippines/
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3.4 Aerothermal
3.4.1 Market Overview
Aerothermal energy, which involves the harnessing the energy present in the air due to solar radiation to generate heat, has not as yet been exploited in the Philippines. There are no concrete initiatives in this area in the Philippines, nor in the South East Asian region. The opportunities in this sector are limited, given the country’s strong emphasis on other sources of renewable energy, such as geothermal and hydro power.
3.4.2 EU Entry Opportunities
Currently, there are limited opportunities in this sector. There are no known public initiatives in the industry, or research projects by local universities. There are no local or European companies operating in the sector in the Philippines.
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3.5 Geothermal
3.5.1 Market Overview
The Philippines has a long history in the development of geothermal resources, with the earliest installation being the Palinpinon Geothermal Plant in the island of Negros in 1977. The country has a geological advantage for geothermal energy as it lies on a tectonically active area in the eastern Pacific Ring of Fire, making it one of the world’s foremost geothermal resource countries. According to the International Geothermal Association, the Philippines ranks second to the United States in terms of its cumulative installed capacity for geothermal power.
Figure 9: Palinpinon Geothermal Plant Source : Thorndon Cook
The Philippine government’s National Renewable Energy Programme (2011-2030) outlines its aim to be the number one geothermal energy producer in the world. It sets a target to reach an
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additional 1,455 MW geothermal capacity to contribute to the goal of tripling the share of renewable energy for power generation by 2030.33
The Philippines has six key geothermal fields namely, BacMan, MakBan, Mindanao, Palinpinon, Tiwi and Tongonan.
Design Capacity Name State (MWe) Mindanao Geothermal Power Plant Cotabato 106.00
Philippines Makiling-Banahaw (Mak-Ban) Geothermal Laguna 442.80
Power Plant Philippines
Leyte Geothermal Power Plant Philippines Leyte 700.90 Northern Negros Geothermal Power Plant Negros Occidental 49.37
Philippines Negros (Palinpinon) Geothermal Power Plant Negros Oriental 192.50
Philippines
Bacon-Manito (BacMan) Geothermal Power Sorsogon 150.00
Plant Philippines
Table 7: Key Geothermal Fields Source : Department of Energy, Philippines
Key players that operate in the Philippines’ geothermal sector include Energy Development Corporation, Aboitiz Power, Chevron Geothermal Services Company, Emerging Power Inc., Energy Development Corporation, Maibarara Geothermal Inc., and Philippine Geothermal Production Company Inc. Of these, Energy Development Corporation is the largest geothermal producer in the Philippines, with a 66% share of the geothermal market.
In 2016, the total installed geothermal electricity generation capacity in the Philippines reached 1,916 MW, accounting for 8.9% of total installed generating capacity, and helping the country reduce its reliance on expensive fuel imports. Its capacity in 2016 does not indicate a
33 NREP PH 2011-2030.pdf
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positive growth from its 1,904 MW recorded in 2010, as many of its facilities are aging and have been under construction for rehabilitation.
The Department of Energy (DOE) is encouraging the development of geothermal energy through the National Renewable Energy Programme (NREP). The NREP outlines the government’s goal of increasing geothermal power capacity by 75%, with another 1,465 MW from 2013 to 2030.
Figure 10: Geothermal Roadmap, 2013-2030 Source : Department of Energy, Philippines
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Local Companies
AP Renewables Inc.
AP Renewables, Inc. (APRI) is based in Philippines and it is the renewable power unit of Aboitiz Power Corp. Aboitiz Power Corporation (Aboitiz Power, AP) which was established in 1998, is the holding company for the Aboitiz Group’s investments in power generation, distribution, and retail electricity services in the Philippines. APRI is one of the leading geothermal energy producers in the country, delivers clean and renewable base load power with the two facilities that it operates in Albay and Batangas.
Earlier in 2017, APRI launched its newly restored geothermal project in Santo Tomas, Batangas. This geothermal plant is a 6 MW binary plant located at Makiling-Banahaw. APRI also has secured power conversion supply with Nestle Philippines, Inc. at its manufacturing facility located in Lipa, Batangas. The global food giant is currently getting an 8.8 MW allocation for its factory energy use requirement from the MakBan geothermal power plant.
Energy Development Corp.
Energy Development Corporation (EDC) is the largest producer of geothermal energy in the Philippines and the second largest in the world. Being the largest vertically-integrated geothermal developer, it supplies 1,169 MW of electricity generated by geothermal energy. Among its power plants are Bacman I & II, Palinpinon I & II, Tongonan, Mahiao, Malitbog, Mahanagdong, Optimisation, Nasulo, Mindanao I & II. Its recent project is the retrofitting project for the Tongonan geothermal plant. EDC plans to invest up to US$ 60 Million to improve 112.5 MW generation capacity by 10%.
EDC is also listed in the Board of Investment (BOI) registered enterprise to be eligible in receiving incentives under Renewable Energy Act 2008.
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Basic Energy Corp.
Basic Energy Corporation has interests in various fields of renewable energy and alternative fuels, and oil and gas exploration and development. With its experience in exploration in the energy sector, the Department of Energy has awarded Basic Energy with the Geothermal Service Contract 8 in Mabini, Batangas to Basic Energy. Pursuant to Republic Act No. 9513 (Renewable Energy Act of 2008), it was also awarded additional geothermal service contracts in various parts of the country, namely in Mariveles Bataan; East Mankayan, Benguet, Mountain Province and Ifugao; Iriga, Camarines Sur and Albay; West Bulusan, Sorsogon.
Under the Geothermal Service Contract No. 8, both Basic Energy and Phinma Energy are now determining resources at the Mabini Geothermal Project in Batangas. Pre-feasibility studies show that this project, which covers 3,841 hectares, can yield between 20 to 60-megawatts of power.
PetroEnergy Resources Corporation (PERC)
PetroEnergy Resources Corporation (PERC) diversifies its business portfolio in upstream oil exploration, renewable energy development, and power generation. Its renewable energy arm, a wholly–owned subsidiary called PetroGreen Energy Corporation (PGEC) has been developing and operating since 2010 in the areas of geothermal, wind and solar power facilities.
Maibarara Geothermal, Inc. (MGI) operates the Maibarara Geothermal Power Project (MGPP) under a joint venture agreement with Trans-Asia Oil and Energy Development Corporation (Trans-Asia) and PNOC Renewables Corporation (PNOC RC). The company was established under shareholding interests between three parties – PetroGreen Energy Corporation (65%), Trans-Asia (25%) and PNOC-RC (10%).
3.5.2 EU Entry Opportunities
The Philippine Government is keen to grow this sector as geothermal energy offers large capacity plants with reliability unmatched by any other renewable resource. In the Philippine Energy Plan (2012-2030), the Department of Energy identified 26 sites to increase existing installed capacity by 62% throughout the 18-year planning period, as shown in the table below.
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Region Site Location Generation Capacity (MW) Cordillera Kalinga Kalinga 120 Administration Daklan Benguet 60 Region Buguis-Tinoc Ifugao 60 Acupan-Itogon Benguet 20 Mainit-Sadanga Mt. Province 80 II Cagua-Baua Cagayan 45 III Natib Bataan 40 IV-A Mabini Batangas 20 San Juan Batangas 20 IV-B Montelago Oriental Mindoro 40 V Del Gallego (Mt. Labo) Camarines Sur 65 Camarines Sur Geothermal Camarines Sur 70 Project Sothern Bicol Sorsogon 40 VI Mandalagan Negros Occidental 20 VII Lagunao Negros Oriental 60 VIII Biliran Biliran 50 Bato-Lunas Leyte 65 IX Lakewood Zamboanga del Sur 40 X Ampiro Misamis Occidental 30 Balingasag Misamis Oriental 20 Sapad-Salvador Lanao del Norte 30 XI Amacan Compostela Valley 40 Mt. Zion North Cotabato 20 Mt. Matutum General Santos 20 Mt. Parker South Cotabato 60 XIII Mainit Surigao del Norte 30 TOTAL 1,165
Table 8: Target geothermal sites, 2012-2030 Source: Department of Energy, Philippines
Solutions in demand in the Philippines include (1) Growing the scale of centralised generating plants; (2) Finding effective models for small-scale developments; and (3) Solutions for economically exploiting lower temperature resources
The Philippine government has had a number of discussions with New Zealand and have plans to collaborate in the geothermal sector, in the following areas (1) modelling of geothermal
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reservoirs; (2) management of databases; and (3) assessment of new geothermal fields; which also serve to highlight the key requirements of the Philippines. European companies in the geothermal value chain, from exploration and drilling through to design, project management, construction The Philippines requires new development and operation, can showcase their expertise and technologies for its second-tier resources that are applicable for acidic and young share their knowledge with the Philippine industry to geothermal systems, development of low- exploit some of these opportunities. heat geothermal systems and the direct use of small-scale geothermal technologies In addition to new plants to build additional capacity, some of the Philippines’ older facilities require rehabilitation and upgrading, offering opportunities to EU companies with expertise in this sector.
As most of the country’s high enthalpy resources have been developed, the government is now looking to optimising the low enthalpy geothermal resources within the country. It requires new development technologies for its second-tier resources, that are applicable for acidic and young geothermal systems, development of low-heat geothermal systems and the direct use of small- scale geothermal energy technologies. Among locations targeted for these resources are Balut Island in Davao del Sur, Banton Island in Romblon and Maricaban Island in Batangas.34
European Companies
Tamoin Industrial Services Corp. (TISCO)
TISCO is an industrial services and construction company in the power industry operating in the Philippines with market sights extending to the rest of South East Asia. TISCO is a joint venture of Grupo Tamoin based in Spain, and G.A.A. Delgado, Inc. based in Manila. This venture is backed by the full resources of two parent companies: Grupo Tamoin with over 60 years of technical experience in more than 15 countries; and GAAD, Inc. with close to 20 years of experience in global financial markets, power industry advisory, and project development.
34 NREP 2012-2030.pdf , http://powerphilippines.com/2016/08/17/group-pushes-fit-geothermal-technologies/
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In 2015, Emerging Power Inc. (EPI) announced it entered into a MoU with TISCO for the operations of the geothermal power plant in Naujan town. Under the deal, TISCO will provide engineering, operations and management services for EPI for the operation of the Mindoro Geothermal Power Corp. The Mindoro project aims to supply energy to more than 250,000 homes in the whole Mindoro Island.35
Eni SpA (Eni)
Eni SpA (Eni) is an Italian company that engages in the exploration, development and production of hydrocarbons, in the supply and marketing of gas, liquefied natural gas and power, in the refining and marketing of petroleum products, in the production and marketing of basic petrochemicals, plastics and elastomers and in commodity trading. The Company's segments also include geothermal energy.
In 2015, Eni Green Power, the Italian company's renewable energy subsidiary, and Japanese trading house Marubeni announced plans to build and operate geothermal power plants in the Philippines. The two companies will partner with a local Filipino company that owns the resource development rights, and will set up a joint venture company. Acting as an independent power producer, this new company will build and operate geothermal plants and sell the generated electricity. The initial plan is to spend some 20 billion yen to 30 billion yen (US$ 159 million to US$ 238 million) to launch a first plant with an output of more than 100,000 kW in around 2020.36
35 http://www.philstar.com/business/2015/10/07/1507846/emerging-power-hires-manager-40-mw-mindoro-geothermal 36 http://asia.nikkei.com/Business/Deals/Marubeni-to-tap-into-Philippines-geothermal-promise
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3.6 Hydrothermal & Ocean Energy
3.6.1 Market Overview
The Philippines is endowed with vast ocean resource potential, given its archipelagic nature and geographic position. However, there have been very limited activities in the hydrothermal and ocean energy sector, primarily because of the high investment cost for its exploitation.
Figure 11: Potential Ocean Energy Sites in the Philippines Source: Department of Energy, Philippines
The exploration of ocean energy potential in the Philippines began with a study of the ocean resource assessment conducted by Mindanao State University in the 1980s, which indicated that the country has a theoretical capacity of 170 GW of electricity generation capacity over a 1,000 square kilometre ocean resource area. Independent research by several private and public
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institutions identified the potential for around 170,000 MW of clean renewable ocean energy in the Philippines, with 22 sites tagged for further investigation.37
Under the Renewable Energy Act 2008 and also National Renewable Energy Programme 2011- 2030, the Philippines indicated its readiness to push forward in exploiting and harvesting ocean energy. Through the NREP, a specific roadmap for this energy subsector has been developed. The Philippines is looking into harnessing ocean energy to generate 35.5 MW in the period of 2016-2020 and a further 35 MW within 2021-2030. This will amount to a total 70.5MW generated from Ocean Energy Resources in the Philippines.38
In 2011, the Department of Energy (DOE) announced that the first Ocean Thermal Energy Conversion plant in Zambales province will be operational in 2018. Due to the delay in granting the feed-in-tariff (FIT) rate, the opening has been moved back to 2022. The Philippine Energy Regulatory Commission (ERC) has deferred the FIT for ocean energy until it has reviewed more data.
Local Companies
Poseidon Renewable Energy Corporation
Poseidon is a company in the Philippines specialising in tidal in-stream energy conversion (TISEC). It provides resource assessment, technology matching, power output estimation, energy projection, economic feasibility analysis, and an end to end project management for the exploration in the TISEC area. In 2015, the Department of Energy awarded the company two projects to develop ocean energy power plants in specifically identified TISEC project sites in Northern Samar, in the eastern Visayas region.
H&WB Asia Pacific (Pte Ltd) Corporation
H&WB Asia Pacific (Pte Ltd) Corporation is a Filipino company that targets opportunities in alternative and renewable energy resources. In the Philippines, it is pioneering the development of ocean power via the Tidal-In-Stream Energy Conversion (TISEC) Project with France’s Sabella SAS.
37 http://hub.globalccsinstitute.com/insights/ocean-thermal-energy-could-power-remote-island-communities 38 NREP 2011-2030 by DOE.pdf
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3.6.2 EU Entry Opportunities
The Philippines has a huge ocean energy potential that is waiting to be tapped. While momentum in the sector has been slow, interest in developing the sector is beginning to ramp up, as evidenced by the involvement of a state-owned enterprise (PNOC RC) in one of the first ocean energy projects in the country as of January 2017.
The Department of Energy has identified 22 prospective sites that can be developed by interested investors to produce the much-needed additional power capacity using ocean energy resources.
Ocean thermal energy sites: San Vicente, Ilocos Sur; Agno, Pangasinan; Palauig, Zambales; Mananao, Mindoro; San Jose, Antique; Manukan, Misamis Occidental; Omosmarata, Basilan; Palaui Island, Cagayan; Dijohan Pt., Bulacan; Mascasco, Masbate; Batag Island, Northern Samar; San Francisco, Surigao del Norte; Lamon Pt., Surigao del Sur, and Lacaron, Davao del Sur.
Ocean tidal energy sites: the Hinatuan Passage, Bohol/Taliban Strait, Surigao Strait, Gaboc Strait, Basiao Channel, San Bernardino Strait, Basilan Strait and San Juanico Strait.
Imports of Generating Sets (which include Wave/Tidal power converters) into the Philippines were valued at US$ 8.855 million in 2016, with Japan and China together accounting for over 60% of supply to the country. European countries that rank among the top 10 source markets include Spain, the UK, Italy and Germany. Table 42 in Section 5.3 Useful Statistics provides their trade shares.
The sector is starting to catch the attention of foreign companies. Oceantera Energy Corporation, a UK-based company, has set up a local subsidiary, Oceantera Philippines, which offers ocean resource assessment technology, while UK-based Orcades Marine Management Consultant has set up a regional office in Singapore, and is actively seeking opportunities in the marine renewable energy sector in the Philippines.
The first few projects in the hydrothermal and ocean energy sectors are progressing, which are signs that interest in the sector is picking up. These include:
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The 10 MW Cabangan ocean thermal conversion project in Zambales Province in Luzon is expected to start commercial operations in 2022. The project was awarded by the Philippine Department of Energy to Bell Pirie Power Corporation, which has a service contract to explore, develop, build and operate a power plant in 1,300 hectares of sea.
H&WB Asia Pacific Corporation (Pte Ltd) is another example of a private investor developing ocean energy in the Philippines. It was awarded service contracts to develop four separate sites with a total capacity of 20 MW.
Philippine conglomerate, San Miguel Corp (San Miguel) plans to invest in a 1.2-GW ocean tide power project. Ramon Ang, President and CEO of San Miguel, unveiled plans for some US$ 33.6 billion (EUR 31.6 billion) in investments in three projects with 1.2 GW capacity. These include an oil refinery and an integrated steel mill, each with a price tag of about US$ 15 billion, and an ocean tide project.39
European Companies
Bell Pirie Power Corp
Bell Pirie Power Corp. is a power generation company headquartered in the United Kingdom. The company specialises in ocean energies in the Philippines, where it is the developer of the OTEC Zambales Pilot Plant which uses Ocean Thermal Energy Conversion (OTEC) technologies to generate electricity.
OTEC Zambales is a 10 MW pre-commercial power plant to be sited ten kilometres off the coast of Zambales, facing the South China Sea, where a bloc of 1300 hectares of sea has been awarded to the company by the government to explore, develop, build and operate a power plant. The initial investment for the project is US$ 186 million. According to Bell Pirie, the site provides an excellent energy climate for OTEC.
The project is expected to start commercial operations in 2018. The offshore power block will be housed on a ship-shaped platform similar in size to a small tanker. The electricity generated will
39 https://renewablesnow.com/news/philippines-san-miguel-to-invest-in-ocean-energy-report-564590/
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be transported to the mainland via an undersea power cable. From there 10 km of overhead power cable will deliver the electricity to the National Grid Corporation of the Philippines' transmission substations (69kV and 230 kV lines) in Botolan, Zambales. These lines supply the island of Luzon including the urban areas of Manila.
Bell Prie Power (Philippines) CEO Lourdesiree Latimer said there is a “headspinning” potential for ocean energy production in the Philippines.
Sabella SAS
The French company Sabella SAS was founded in 2008 by the Consortium Sabella in response to early success of its tidal turbine technology. The Company develops submarine tidal stream turbines for generating hydrokinetic energy. It has active projects using its advanced tidal turbine technology in France, Quebec, and internationally.
In the Philippines, Sabella has partnered up with H&WB Asia Pacific to develop a tidal power plant. The two companies have signed a MoU in 2015, for the development of a tidal power plant in San Bernardino Strait, off Sorsogon province. H&WB chose to collaborate with Sabella as the company features the most suitable technology for the development of this tidal energy project. The project features three tidal turbines with 500 kW rated capacity each. H&WB will be in charge of the resource assessment, site permitting and characterisation, while Sabella will provide the technology and the technical expertise for the project. This will be the first tidal power plant in the Philippines, and in South East Asia as well.
PNOC Renewables Corporation (PNOC RC), a fully owned subsidiary of state-owned Philippine National Oil Company, joined the project in January 2017.
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3.7 Hydropower
3.7.1 Market Overview
Hydropower is the leading source of clean energy in the Philippines and the second biggest supplier of Hydropower is responsible for 19.7% of the Philippines’ total energy mix electricity, responsible for 19.7% of the country’s total energy mix. Hydropower can be harvested from all regions in the country, which has an average of 220 to 300 mm of rainfall every month. As of December 2016, Philippines has installed hydro power plants with a total installed capacity of 3,618 MW. Of this, 88% of the capacity is dependable.
The National Power Corporation (NPC), which was created in 1936, has the exclusive rights to develop all streams, lakes and rivers for power generation, while the National Electrification Administration received a mandate in 1979 to develop the country’s small-scale hydropower potential. The private sector was encouraged to develop power projects under a Build-Operate- Transfer scheme introduced in 1987.
Figure 12: Bakun AC Hydroelectric Plant Source: National Power Corporation
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Hydroelectric power capacity in the Philippines was significantly boosted with the introduction of the Mini-Hydroelectric Power Incentives Act of 1991 (Republic Act No. 7156), which aims to grant mini-hydroelectric power developers the necessary incentives and privileges to provide an environment conducive to the maximum development of the Philippine hydroelectric power resources.
The Department of Energy classifies hydroelectric plants into two categories: Dam and Run-of- the-river hydro-electric plants, and further classifies them based on their capacities:40
Small / micro-hydro - 1 to 100 kW
Mini-hydro - 101 kW to 10 MW
Large hydro - more than 10 MW
Total Type of Hydro Power Total Installed No. Grid Location Quantity Dependable Plants Capacity (MW) Capacity (MW)
1. Visayas Run-of-River type HEPP 8 19.50 18.40 Dam type HEPP 6 727.10 551.00 2. Mindanao Run-of-River type HEPP 6 100.40 77.80 Dam type HEPP 10 1,218.00 1,029.80 3. Luzon Run-of-River type HEPP 16 822.35 627.35
Table 9: Distribution of hydro power plants according to type Source: National Power Corporation
Local Companies
Alsons Consolidated Resources Inc. (ACR)
Alsons Consolidated Resources Inc. a publicly-listed company of the Alcantara Group with subsidiaries engaged in power generation, property development, industrial estate management and other investments.
40 https://www.doe.gov.ph/hydropower
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In May 2016, it announced its target to construct 3 major Mindanao power projects by the end of 2016. The 3 projects include first the 15 MW Siguil River run-of-river hydroelectric plant in Maasim, Sarangani; the second is a 105 MW section of the 210 MW Sarangani Energer Corporation (SEC) baseload coal-fired power plant also in Massim, Sarangani; and lastly, the 105 MW San Ramon Power, Inc. baseload coal-fired power plant in Talisayan, Zamboanga City.
Hydro Electric Development Corp (HEDCOR) / Aboitiz Power Corp. (AP)
Hydro Electric Development Corp. is a wholly-owned subsidiary of Aboitiz Power, one of the largest power producers in the Philippines. It specialises in generating renewable energy from run-of-river hydropower systems. Currently, HEDCOR manages and operates 22 hydropower plants and supplies the country with 185 MW of clean and renewable energy. Its latest run-of- river hydropower system is the Manolo Fortich Hydro Project with capacity of 68.8 MW.
For large hydro projects, Aboitiz Power is involved through its joint-venture company, SN Aboitiz Power (SNAP). New projects under SNAP are Maris Canal and Ifugao Hydro Projects. The Maris Canal Hydro Project involves developing the 6-MW Maris South Canal and 1.75-MW Maris North Canal mini-hydropower projects. As for Ifugao Hydro Project, it is a 350-MW hydropower complex project consisting of three facilities namely the 100-MW Alimit and 10-MW Olilicon plants, and the 240-MW Alimit pumped storage facility. Both of these projects are currently at the feasibility stage.
First Gen Corp. (FGEN)
First Gen Corp. is a subsidiary of First Philippine Holdings Corporation (FPH), which engages in power generation, power distribution, infrastructure, manufacturing and property development.
In May 2016, First Gen Corp. outlined its plan to spend US$ 470 million on hydropower projects over a three-year period. This includes the 8-MW Bubunawan hydroelectric power plant project in Bukidnon province, the 30-MW Puyo hydro project in Agusan Del Norte and the 20-MW Tagoloan in Bukidnon.
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3.7.2 EU Entry Opportunities
Hydropower is considered as one of the primary The DOE estimates that the total untapped supplies for power production in the Philippines. hydropower resoure potential of the country Under the Philippines Energy Plan 2012- 2030, the is valued at US$ 13 billion overall strategic thrust for hydropower is to develop small and large-scale hydropower capacities, and to optimise the mini-hydro-potential in validated sites across the Philippines.
According to the Department of Energy (DOE), the total untapped hydropower resource potential of the country is estimated at 13,097 MW, of which 85% is considered large and small hydros (11,223 MW), 14% (1,847 MW) is classified as mini-hydros while less than 1% (27 MW) is considered micro-hydros. This undeveloped potential, estimated by the DOE to be valued at US$ 13 billion,41 represents significant opportunities for European companies, for both large and small scale projects.
The Philippines’ imports of hydraulic turbines, water wheels and regulators (excluding hydraulic power engines) surged to their highest levels in 2016. Data in Table 46 (under Section 5.3 Useful Statistics) shows that the country’s imports in this category were valued at US$ 18.523 million - more than a three-fold increase over the previous year. Japan, Germany and India are the top three suppliers to the Philippines, with Japan having a leading share of 60%. Italy and Switzerland also feature among the list of top 10 exporters to the Philippines for this category.
Despite the uncertainty in FIT rates, interest in hydro power remains strong. Large companies such as First Gen Corp. of the Lopez Group, the leading clean and renewable energy company in the Philippines with an installed capacity of close to 3,000 MW, are taking an interest in run-of- river, pumped storage and mini-hydroelectric power projects, which are suitable for an archipelagic country like the Philippines which has smaller rivers and streams.
41 http://www.philstar.com/business/2014/08/22/1360206/phl-awash-hydropower-potential-needs-13b-investments
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There is a growing demand for small hydro turbines in rural areas. This offers opportunities for EU companies with simple but good quality products that can be used in rural development projects, where technical skills may be lacking.
The Philippines National Irrigation Administration is working with the Philippine National Oil Company Renewables Corp. to create a new unit to study the potential of developing small hydropower projects in over 300 irrigation facilities across the country, creating opportunities for European companies with expertise in this area.
The El Niño phenomenon tends to hit the Philippines very severely, impacting the hydropower sector as extended periods of droughts cause rivers to dry up. This brings new opportunities for companies in the hybrid PV-Micro Hydro Power Generation field.
European Companies
Andritz VA Tech Hydro
Andritz is headquartered in Austria, and is a global leading supplier of plants, equipment, and services for hydropower stations, the pulp and paper industry, the metalworking and steel industries, and for solid/liquid separation in the municipal and industrial sectors. Since 2009, Andritz has operated an office in Manila. It has a long history in the Philippines with the first delivery of equipment in 1930. In total it has installed or rehabilitated more than 40 hydro power plants with a capacity of over 1,600 MW.42 The company is also focusing on small hydro installations. Below are several projects they have won in the Philippines:
In 2010, Andritz received an order from Hedcor Inc. to deliver the complete electro- mechanical package, including installation and commissioning for the hydro plant Irisan 1.
In 2011, it signed a contract with Sunwest Water and Electric Co. Inc for two 3.60 MW and one 800 kW Francis turbines for the Villasiga hydro power project.
42 https://www.andritz.com/index/hydro/hydronews/hy-hn-special1-southeast-asia/hy-hn-asia-special1-05-philippines.htm
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Andritz was assigned to deliver the entire electro-mechanical equipment for the hydropower plants Tudaya 1 and Tudaya 2 in 2012.
In May 2013, another contract was signed with Hedcor Inc. The scope of supply consisted of two 7.4 MW Pelton turbines and a complete “from water-to-wire” package.
The contract for the supply of the complete electro-mechanical works for the 8 MW hydropower plant Catuiran was signed with Sta. Clara International Corp. in November 2014.
In 2015, Andritz received contracts for the two cascading plants HPP Manolo Fortich 1 (44.4 MW) and Manolo Fortich 2 (26.1 MW).
Energies International Limited
Founded in 1983, Energies International is a small organisation in the management consulting services industry, and is located in Barcelona, Spain. The company has developed a considerable expertise in hydropower projects.
In 2017, Philippines-based Basic Energy Corp. announced an agreement with the Spanish firm for the joint development of domestic hydropower projects. Energies International will seek to explore and identify sources for the funding and technical expertise requirements of projects through its network in the international energy business. Basic Energy will explore and develop the renewable energy resources in approved areas over a two-year pre-development stage. The applicable contract will be valid for 25 years from the day commercial operations will begin. The service contracts cover the construction, installation, operation and maintenance of systems that will convert hydropower to electrical power, and its transmission.43
43 http://business.inquirer.net/175215/basic-energy-gets-spanish-partner-for-hydro-ventures
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3.8 Biomass
3.8.1 Market Overview
The biomass industry in the Philippines, while still far behind fossil fuel-based power generation, is rapidly advancing. As of the end 2016, biomass accounted for 3.3% of the total renewable energy resources generated in the Philippines. Nearly 30% of the energy for the 100 million people living in the Philippines comes from biomass, mainly used for household cooking by the rural poor. Biomass energy application accounts for around 15% of the primary energy use in the Philippines.
The Philippines is mainly an agricultural country with a land area of 30 million hectares, 47% of which is agricultural. The total area devoted to agricultural crops is 14 million hectares, distributed among food grains, food crops and non-food crops. The three main contributors to biomass energy resources are rice, coconut and sugarcane, given that the most common agricultural residues are rice husk, rice straw, coconut husk, coconut shell and bagasse. There is a significant supply of bagasse in Regions III, IV, VI and VII. Coconut residues abound in Regions IV, VIII, IX and XI while rice hull is abundant in Regions II, III, IV and VI. 44 Approximately a third of the country’s agricultural land produces rice, generating large volumes of rice husk, straw and hulls). Forest residue, municipal solid wastes and animal manure from the husbandry industry are also part of the biomass feedstock.
Given the country’s agricultural profile, it has excellent potential for harnessing biomass power. Biomass technologies in use in the Philippines include the use of bagasse as boiler fuel for cogeneration, rice/coconut husks dryers for crop drying, biomass gasifiers for mechanical and electrical applications, fuelwood and agriwaste for oven, kiln, furnace and cookstoves for cooking and heating purposes.
44 https://www.doe.gov.ph/biomass-solar-wind-and-ocean
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The potential power from the agro-industrial residues of the 4 crops is summarised in the table below:45
Crops Type Agro-Industrial Residues Potential Power (MW) Percentage
Corn Corn stalks 1,500 33.67% Corn cobs 134.52 2.88% Corn leaves 11.3 0.24% TOTAL 1,652.04 35.38% Coconut Coconut shell 178.53 3.82% Coconut husk 410.82 8.80% Coconut frond 628.21 26.08% TOTAL 1,217.56 38.70% Sugarcane Bagasse 842.4 18.04% Cane leaves/ trash 146.54 3.14% Waste water 26.8 0.58% Filter cake 16.6 0.36% TOTAL 1,032.34 22.1% Rice Rice hull 155.18 3.32% Rice straw 429.62 9.20% TOTAL 548.8 12.52%
Table 10: Potential Power of Agro-Residential Residues Source: Department of Energy, Philippines
45 http://www.ijat-aatsea.com/pdf/v12_n2_16_March/8-IJAT_12(2)_2016%20Teodoro%20C.%20Mendoza--Crop%20Science.pdf
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The number of biomass cogeneration power plants in the Philippines at end of 2016 is found in Table 11:
No. Grid Type of Biomass Quantity Total Total Location Power Plants Installed Dependable Capacity Capacity (MW) (MW) 1. Visayas Bagasse-fired Cogeneration Plant 5 93.00 71.50
Rice Husk-fired Cogeneration Plant 1 8.3 5.00
2. Mindanao Bagasse-fired Cogeneration Plant 1 35.90 10.00
3. Luzon Bagasse-fired Cogeneration Plant 3 43.80 33.60
Rice Husk-fired Cogeneration Plant 3 37.00 31.80
Table 11: Biomass Cogeneration Plants in the Philippines Source: Department of Energy, Philippines
Large Philippine energy companies, as well as smaller specialised local players are catering to the growing demand for biomass power in the Philippines or looking to biomass to diversify their energy sources. Agricultural businesses such as sugarcane, rice and livestock farmers, as well as millers have started to warm up to biomass power, as can be seen in the range of projects that are being developed by various local biomass players in the market (See Section 3.13 Cogeneration Technologies, Table 14). While foreign presence in the market is still relatively small, some foreign companies have already initiated partnerships or ventured directly into the market, and many are eyeing the market with interest.
Local Companies
Aseagas Corporation (Aseagas)
Aseagas Corporation established Aboitiz Equity Ventures (AEV) in 2012 to specialise in the waste-to-fuel business. It is a renewable energy company providing fuel for the public transport sector from biomass waste. However, it has now shifted its business from providing fuel to providing power due to the slump in oil prices in 2014.
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Its first biomass waste-to-energy plant in Lian, Batangas utilises the organic effluent that comes directly from Absolut Distillery and converts it into power and other by-products. The plant has a capacity of 8.8 MW that could power 22,000 households.
Isabela Biomass Energy Corporation (IBEC)
Isabela Biomass Energy Corporation (IBEC) is a 100% Philippine-owned corporation that was created to generate, sell and supply electricity through the exploration, development and utilisation of alternative and/or renewable sources of energy and technologies.
IBEC has successfully implemented two 2 MW rice-husk-fired power plants located in Isabela Province – the Golden Season Power Plant in Luna and the Family Choice Power Plant in Cabutuan. In May 2017, the Philippine Board of Investments approved the company’s application to develop, construct and operate a 5 MW biomass power plant in Barangays San Pedro and San Pablo in Aurora, Isabela, which also uses rice husk as a fuel. The plant will have a boiler efficiency of around 79% at full load, and will require around six tons per hour of rice husk. It is expected to contribute 35.6 million kilowatt hours to the Luzon grid.
Bronzeoak Philippines
Bronzeoak Philippines is a leader in the development and implementation of clean energy in the Philippines. Under its track record in clean energy, fuel supply logistics and agricultural systems, the company has undertaken the development of three biomass power plants on Negros Island, namely the San Carlos BioPower Plant, South Negros BioPower Plant and North Negros BioPower Plant, which utilise sugarcane waste to produce electricity.
In 2016, the International Finance Corporation (IFC), which is a member of the World Bank Group, showed a strong interest in Bronzeoak’s growing biomass portfolio which resulted in a US$ 161 million fund given by IFC, the Government of Canada and the Clean Technology fund towards the development of these three plants.
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3.8.2 EU Entry Opportunities
The resources available in the Philippines can generate biomass projects with a potential capacity of more than 200 MW. It has been estimated that the volume of residues in the Philippines, from rice, coconut, palm oil, sugar and wood industries is 16 million tons per year. Bagasse, coconut husks and shell can account for at least 12% of total national energy supply. The World Bank- Energy Sector Management Assistance Programme estimated that residues from sugar, rice and coconut could produce 90 MW, 40 MW, and 20 MW, respectively.
The value of imports of furnace burners for pulverised solid fuel or gas (including combination burners) into the Philippines was US$ 1.33 million in 2016. European countries are key suppliers to the market, with France having a leading share of 26.5%, followed by Germany’s 20% share.
Agricultural businesses are starting to turn to biomass power. The Philippine Board of Investments (BOI) recently greenlit the application of a consortium of rice millers, called Isabela La Suerte Rice Mill Corporation, to build a 20 MW rice-husk-fired power plant in Alicia, Isabela. The project has already been endorsed by the Department of Energy and granted clearance by the Environmental Management Bureau of the Department of Environment and Natural Resources (DENR), sending a strong signal to investors of the Philippine government’s commitment in the development and use of clean, cost effective production of electricity, through the utilisation of biomass.
Commercial livestock farms in the Philippines generate significant amount of animal wastes. There are opportunities for European companies to offer Biogas recovery technology to fuel gas engines for power generation as a clean and cost-effective strategy for managing wastes. For example, Cavite Pig City is a large hog farm located in Cavite City, with a population of 100,000 heads, which invested in a 1.1 MW biogas facility to manage its animal wastes.
Rice husks are perhaps the most important underdeveloped biomass resource that can be fully utilised in a renewable and sustainable manner for generation of electrical power.
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Biomass technologies in the country are mature. Most of the applications to the Department of Energy are for biomass power plants that use direct combustion of agricultural residues or bagasse. Other biomass technologies that can be tapped are as follows:
Rice Hull Gasification
Biogas Power Generation
Bagasse Cogeneration System
Waste-to-Energy Conversion
Multi-Fuel Biomass Power Plant
Waste-to-Energy Project using Catalytic
Hydrothermal Gasification
Landfill Methane Recovery
European Companies
Areva SA
Areva SA is a French company, which offers technological solutions for renewable-power generation. The Company operates five business divisions, one of these focuses on recycling used fuel and provides transport, clean-up and dismantling services and renewable energy such as wind energy, bioenergy, solar power and hydrogen power solutions.
In 2013, Areva and its partner Engcon Energy Philippines were awarded a contract by the Green Innovations For Tomorrow Corporation, an independent power producer, for the construction of a biomass power plant in the Philippines, located 200 kilometres north of Manila. Using rice husk, the plant has an installed capacity of 12 MW and supplies electricity to around 10,000 households per year. Areva and its partner were responsible for the engineering, design, installation and for providing the main equipment for the biomass power plant.
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This is Areva’s first biomass project in the Philippines. The group has already delivered similar units in Thailand. Louis-François Durret, CEO of AREVA Renewables, said: “This new success will strengthen our position in South East Asia, a booming market where Areva intends to become a reference biomass power plant provider.” 46
46 http://www.areva.com/EN/news-9978/areva-awarded-a-contract-for-the-construction-of-a-biomass-power-plant-in-the-philippines.html
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3.9 Landfill Gas/ Sewage Treatment Gas/ Biogas
3.9.1 Market Overview
The Philippines is one of the countries in South East Asia that uses biogas as a source of energy. Given agriculture is one of the main sectors of its economy, biogas energy is widely harnessed for both on and off-grid supplies. It is gaining significance as a renewable energy source in the Philippines, and Independent Power Producers (IPPs) are taking notice of the viability of this greener source of energy. According to the Department of Energy (DOE), the Philippines’ supply of biogas resources has the potential to generate a capacity of 4,450 MW, which is equivalent to 40% or almost half of the country’s energy needs, if developed.
The main sources of biogas in the Philippines include landfills, agricultural processing, livestock waste, ethanol production, and anaerobic digesters.
Landfill Biogas
The Philippines produces more than 40,000 tons of garbage every day or 14.6 million tons a year.47 As of 2016, there are 101 sanitary landfill sites, 217 controlled disposal facilities and 364 open dumpsites across the Philippines.48
Four landfill sites in the country are registered under the Kyoto Protocol for the Clean Development Mechanism (CDM), namely the (1) Payatas Landfill Gas Capture and Electricity Generation; (2) Metro Clark Landfill Gas Capture and Flare System; (3) Montalban (Rodriguez) Gas Capture and Electricity Generation and (4) Cebu City Landfill Gas and Waste to Energy Project.
In 2008, the Quezon City government granted Italy-based Pangea Green Energy and its local counterpart Pangea Phils, the rights to biogas for a minimum of 10 years in exchange for Pangea’s investment into a biogas plant to reduce methane emissions from the Payatas dumpsite. The biogas generates electricity that electrifies the plant, street lights and the perimeter
47 https://urban-links.org/usaid-launches-municipal-waste-recycling-program-southeast-asia/ 48 http://nswmc.emb.gov.ph/?page_id=50
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lights of the dumpsite. This was the very first Philippine project registered for CDM under the Kyoto Protocol of the United Nations Framework Convention on Climate Change, in solid waste management.49
Animal Waste Biogas
The National Animal Waste Resource Management Programme (NAWRMP) was introduced in the Philippines in 2015 to support proper animal waste disposal. The country has a large livestock population, which consisted of 2.56 million cattle, 2.89 million carabao, 3.71 million goats and 12.5 million swine as of July 2016.
Under the Philippines law, a large-scale piggery farm is required to clean up its effluent and minimise pollutants. The earliest large-scale biogas plant in a piggery was set up at Maya Farm in the Rizal province. 24 digesters batch-fed on a 45-day-cycle utilised waste from an adjoining piggery farm to maintain over 20,000 pigs.50 (It should be noted that this regulation does not apply to backyard or small-scale piggery farms51, which represent 65% of hog raisers in the country.52) Top regions in terms of swine inventory from backyard and commercial farms are Bicol Region and Central Luzon, which contribute 9.61% and 37.83% by farm type, respectively.53
There were about 400 floating dome type biogas digesters installed within the country in the 1970s. Tubular Polyethylene Digesters (TPED) were later introduced in 1990s and this technology was further developed to become High Density Polyethylene Digesters (HDPED) and Scalable Polyethylene Drum Digesters (SPEDD) the following decade.54 The Philippine Bureau of Animal Industry also performs research and development (R&D) in this area which it focuses on exploiting small scale hog farms to produce power through pig waste for conversion into biogas energy.
49 Philippine Landfill and Methane Reduction Plans and Initiatives.pdf 50 https://books.google.com.my/books?id=xe4cgQmAI64C&pg=PA56&lpg=PA56&dq=biogas+animal+waste+in+philippines&source=bl&ots= xeTJCRI1Tr&sig=8QaHnjd0C2XDX60hOY3Kj3PfFSQ&hl=en&sa=X&redir_esc=y#v=onepage&q=biogas%20animal%20waste%20in%20 philippines&f=false 51 http://infohouse.p2ric.org/ref/13/12938.pdf 52 https://www.pressreader.com/philippines/agriculture/20161001/282265254923624 53 https://psa.gov.ph/sites/default/files/Swine%20Industry%20Performance%20Report%2C%20January%20-%20June%202016.pdf 54 http://wepa-db.net/3rd/en/meeting/20170221/PDF/10_S2-1_5_Philippines_0221pdf.pdf
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In 2015, the Land Bank of the Philippines, a government financial institution, signed emission reduction purchase agreements with the Carbon Partnership Facility (CPF); one for pig farms and two are for landfills. This has already encouraged more than 70 pig farms to introduce wastewater biogas systems to capture methane. By January 2016, two pig farms were scheduled to deliver on their CERS while 8 more are identified for inclusion by June 2017. Also, more farms are adopting cleaner technologies to deliver at least 2 million carbon credits until 2020. The Land Bank may sell up to 4.75 million certified emission reductions (CERs) from Clean Development Mechanism (CDM) Programmes for methane recovery from waste.55
Sewage Treatment Gas
The Philippines does not harvest energy from sewerage treatment as the country is still struggling to manage sewerage and sanitation water treatment efficiently. In the 1980s, the country signed a memorandum with the World Bank on the Manila Sewerage and Sanitation Project, which is today still an on-going project.56
In the Philippines, only 10% of wastewater is treated while 58% of the groundwater is contaminated and only 5% of the total population is connected to a sewer network. The vast majority use flush toilets connected to septic tanks. Since sludge treatment and disposal facilities are rare, domestic wastewater is discharged without treatment.57 Only 74% of the population have their own toilet facilities, while 26%, or roughly 26 million, still use unimproved facilities like buckets and open-pit latrines or practice open defecation—in fields, forests, bushes, bodies of water and other open spaces.58
In 2010, the government rolled out the Philippine Sustainable Sanitation Roadmap, which was later converted to the National Sustainable Sanitation Plan to manage sewage and sanitation across the country.
55 http://documents.worldbank.org/curated/en/444441488931731269/pdf/ISR-Disclosable-P115080-03-07-2017-1488931699350.pdf 56 http://projects.worldbank.org/P079661/manila-third-sewerage-project?lang=en 57 http://www.wipo.int/edocs/mdocs/mdocs/en/wipo_ip_mnl_15/wipo_ip_mnl_15_t4.pdf 58 http://newsinfo.inquirer.net/759824/more-filipinos-have-water-but-many-still-lack-toilets
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Waste-to-Energy
The Philippines currently does not harvest biogas from Waste-to-Energy (WTE) technology, as WTE is relatively new in the Philippines. The Duterte administration plans to address the looming garbage crisis in the Philippines using WTE technologies, consistent with the Department of Environment and Natural Resources (DENR) and National Solid Waste Management Commission’s (NSWMC) plans to promote WTE projects. The Philippines is looking to harness new WTE technologies to help it address its The Philippines and Japan are strengthening their looming garbage crisis waste-to-energy (WTE) cooperation, and are eyeing Quezon and Davao cities as potential pilot sites,59 despite objections by environmentalists that the WTE projects will produce toxic chemical substances that are detrimental to the environment and human health.
Companies are starting to venture into this subsector.
Hitachi Zosen will build the country’s very first WTE plant in the city of Quezon in greater Manila. The site will combine a garbage incineration facility capable of processing the waste of 3 million residents with a power plant able to produce more than 20,000kW. The plant is expected to commence operations in the early 2020s.
GUUUN Corp, a Yokohama-based Japanese firm has invested EUR 3.9 million (PHP 220 million) for a waste plastic recycling facility in the town of Consolacion.60 The corporation has also formally inaugurated a 2,400-square-meter recycling plant in Sitio Sun-ok in Barangay Tayud.61
Metro Pacific is proposing to put up a 30 - 40 MW WTE facility, utilising the waste from the Payatas dumpsite in Quezon City. The local conglomerate is planning to open a solid waste management facility outside of Metro Manila.
59 http://www.businessmirror.com.ph/denr-sees-rollot-of-waste-to-energy-projects-in-philippine-cities-next-year/ 60 http://www.bworldonline.com/content.php?section=Nation&title=trash-talk-plastic-recycling-plant-inaugurated-in-consolacion-new-hauler-bags- p40-m-contract-for-cebu-city&8217s-trash&id=145520 61 http://www.sunstar.com.ph/cebu/business/2017/05/12/japanese-firm-invests-recycling-plant-541611
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The Asian Development Bank (ADB) approved a Waste-to-Worth project by Procter & Gamble (P&G), which has committed to conduct pilot studies in developing markets to understand how to eliminate landfilled and dumped consumer solid waste. A US$ 47 million solid waste management plant will soon be put up in Angeles city, funded by P&G, the ADB and the National Solid Waste Management Commission. Once the facility is built, the city government expects to mitigate at least 230 tons of municipal solid waste per day, with output streams consisting of high-value recyclables, and electricity output up 8 to 10 MW.
Local Companies
Infratex Philippines
Infratex provides quality and reliability in environmental containment systems in the Philippines. In 2011, Infratex re-branded itself as Infratex Environmental Services Inc. (IESI) as it joined forces with the renowned Maccaferri Group, which operates in the Philippines as Maccaferri (Philippines), Inc. Infratex distributes products for renewable energy sector such as biogas, bunkermat, COMTEX dual wall pipes & fittings, hydro power, landfill applications, Vinidex HDPE pressure pipes and water & wastewater treatment.
AVgarcia Power Systems Corp.
AVgarcia Power Systems Corporation was incorporated in the Philippines in 1994. Its main activities are in the field of energy engineering services, and it has established a track record in design, engineering and systems integration, procurement, construction, installation, erection and commissioning of energy systems. Among the projects it has undertaken are developing 400 kW, 2 MW, and 60 kW biogas power plants. It partners with Coco Resources Corporation for some of its biogas projects.
3.9.2 EU Entry Opportunities
The Department of Energy (DOE) has stated that the Philippines’ supply of biogas resources has the potential to generate a capacity of 4,450 MW. This potential has not been fully exploited to date, and there are opportunities to be reaped in various areas:
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Landfill / Municipal Waste / Solid Waste Management
A large share of the 600 dumpsites in the Philippines has not as yet exploited the biogas subsector. Open burning at dumpsites is banned by the government, leaving biogas technology as the most viable option for better solid waste management.
Animal Waste Biogas
The swine sector is the second largest economic activity in the Philippines’ agricultural sector. The demand for pork is growing in line with population and income in the country, and meat consumption is expected to grow in parallel. However, there has been a deficit in the supply of pork to the consumers. The growing demand will fuel more investment into pig farming, both large and small-scale, and this will in turn drive the demand for technology to convert animal waste to biogas.
There are also opportunities for small-scale biogas equipment, to serve backyard hog raisers in the country raised hogs. Although these hog raisers are not required by the laws of the country to responsibly dispose of animal waste, this is an area that the Philippine Bureau of Animal Industry is looking to address.
Sewage Treatment Gas
Opportunities in this area have not as yet been developed but are promising. New projects relating to the treatment of sewage and wastewater are coming on stream:
The Manila Water Company has successfully completed the testing of its pilot WTE project in February 2017 – this is the first WTE facility in the country that utilises septage, or waste materials removed from septic tanks, as a feed source. Septage sludge is collected as a by- product of treating used water at the plant, is converted into biogas through the anaerobic digestion process, and the biogas produced is then converted to electricity. Manila Water is exploring various ways that it can scale up and commercialise the system.62
62 https://www.doe.gov.ph/mwc-lights-first-septic-waste-energy-project
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In 2015, local food company Del Monte Philippines Inc. announced its plans to turn wastewater from its pineapple production process into a renewable energy source in its Cagayan de Oro canning plant, in order to address its demand for reliable and secure energy. It appointed Global Water Engineering for the project, which installed a wastewater treatment plant capable of achieving 93% organic pollution removal in its anaerobic reactors and is producing enough methane-rich biogas to power two 1.4 MW GE Jenbacher J420 gas engines. Waste heat from the gensets is also used to heat up boiler feed water – that further reduces the use of fossil fuels in the Del Monte factory.
Waste-to-Energy
The current Philippine administration has made a U-turn on the previous administration’s policy, and is actively looking to exploit WTE technologies to address the growing solid waste management problems the country faces. The Philippine Department of Environment and Natural Resources (DENR) has, this year, entered into discussions with Japan on various opportunities in the country relating to the development of 10 new WTE projects.63 This demonstrates the growing demand in the country, and the opportunities that can be reaped in the market by early entrants.
63 http://www.businessmirror.com.ph/denr-renews-push-for-waste-to-energy-solution-to-address-urban-garbage-woes/
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European Companies
EnviTec Biogas AG
EnviTec Biogas AG is a company based in Germany that covers the entire value chain to produce biogas, including planning and turnkey construction of biogas plants. The company signed a contract in July 2014 to build a 6 MW peak load biogas plant in Candelaria, Quezon province in the Philippines. Its client was First Quezon Biogas Corporation (FQBC), a consortium of local poultry owners while its local partner was Carbon Footprint Solutions Inc, a provider and developer for renewable energy projects in the Philippines and South East Asia.
The biogas plant aims to process 22,000 tonnes of poultry manure and 30,000 tonnes of waste from rice, maize, and straw production. Upon completion, the plant will deliver 24 million kWh of electricity. EnviTec has stated that the agricultural land of the Philippines offers enormous potential for the use of bioenergy.
Pangea Green Energy
Pangea Green Energy is an Italian renewable energy project development and consulting company, providing technical advice, innovative financial solutions, and environmental expertise that balance economic and environmental benefits.
Pangea has established a Philippine entity: Pangea Phils. One of its projects is the Quezon City Controlled Disposal Facility Biogas Emission Reduction Project, which aims to reduce methane emissions from the Payatas controlled dumpsite. The project involves the capture, collection, processing, and flaring of landfill gas (LFG), including the conversion of methane into electricity.
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3.10 Power Generation
3.10.1 Market Overview
The Philippine Energy Plan 2012-2030 targets for the current installed capacity in the country of to go up to 25,800 MW. This is still expected to be short of the projected demand of 29,330 MW in the year 2030.
The Philippines’ total installed capacity for 2016 grew to 21,423 MW. This increase in capacity is associated with the commercial operation of new power plants in Luzon, Visayas and Mindanao. On the other hand, the country has a total of 19,097 MW dependable capacity or about 89% of the total installed capacity which has been delivered to the grid.
As of the end of 2016, fossil fuel remains the major source of the Philippine’s power generation. Coal power plants account for the largest market share in this sector, with a 34.6% share. The renewable energy plants comprised of geothermal, hydro, biomass, solar and wind energy sources constitute the second largest share in the total installed capacity in 2016 with 32.5% of power generated to end users. Of this figure, hydro and geothermal power generation are the main sources for renewable energy power generation with 16.9% and 8.9% shares respectively, of the total installed capacity in 2016.
The Philippines’ electricity tariffs are among the highest in the world. Indonesian tariffs are seven times cheaper, while Singapore pays 18% less for electricity than the Philippines.64 The high cost is one of the key issues that the Duterte administration aims to resolve.
Going forward, the Philippines needs to build an additional 7,000 MW of power generation capacity over the next five years to support its fast-growing economy. The Department of Energy will facilitate the build-up of an appropriate portfolio of installed and dependable energy capacities, anchored on a technology-neutral policy, especially for the power sector, for base load, mid-merit and peaking requirements to support the country’s growing economy. It intends to
64 https://www.bloomberg.com/gadfly/articles/2017-03-24/duterte-should-focus-energy-on-philippines-power-plight
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create more competition in the market, avoid being shackled to feed-in-tariffs, caps and quotas, and slash electricity prices for industry and consumers.
Top Power Producers in the Philippines are identified in the figure below.
Figure 13: Key Power Players in the Philippines Source: Department of Energy, Philippines
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The government is also looking to develop the power generation infrastructure to provide more reliable supply to the citizens. The National Grid Corporation of the Philippines has proposed a project that will bring power-sharing between the Visayas and Mindanao regions, and eventually make the connection of the country’s 2 grids with the Luzon grid a reality. The proposed project, which is presently awaiting approval by the Energy Regulatory Commission, is slated to cost approximately EUR 9.32 billion, and involves the laying of a Visayas-Mindanao submarine power cable in a route which begins in Cebu and terminates in Dipolog. The country hopes to connect the grids by the deadline of December 2020.
The National Grid Corp. of the Philippines, which runs the country’s power transmission superhighway, has crafted a new plan for putting up new transmission backbones and upgrading existing systems under its Transmission Development Plan (TDP). The TDP outlines the on-going and future transmission projects in Luzon, Visayas and Mindanao, and can be accessed at https://www.ngcp.ph/transmission-development-plan.asp
Local Companies
San Miguel Group
San Miguel Corporation is one of the largest and most diversified conglomerates in the Philippines in the fields of food and beverages, packaging, petrochemicals, power and infrastructure. San Miguel has built a power company with a full spectrum of three Independent Power Producer Agreement contracts and also operates a cogeneration power plant, with a combined capacity of 2,903 MW, accounting for 22% of the Luzon grid and 17% of the national grid.
Aboitiz Power Corporation
Aboitiz Power Corporation is a leader in the Philippine Electric Power Industry. It is the holding company for the Aboitiz Group’s investments in power generation, distribution and retail electricity services.
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The company employs a mix of renewable and non- renewable energy sources to power up the country. It is KPMG estimates that there will be an a major producer of Cleanergy, its brand for clean and aggregate investment opportunity of about US$ 25 billion until 2030, making renewable energy with several hydroelectric and it possible for new players to enter the geothermal assets. In addition, it has various fossil-fired Philippine energy market power plants in its generation portfolio, specifically from coal and oil. Aboitiz Power, along with its partners, currently has 44 generation facilities with an attributable net sellable capacity of 2,402-MW.
First Gen Corp.
First Gen Corp. is a subsidiary of First Philippine Holdings Corporation (FPH), which engages in power generation, power distribution, infrastructure, manufacturing and property development. It is the pioneer and leader in the natural gas industry, producing 2,959 MW of electricity from indigenous energy sources. First Gen accounts for 23% of the country’s gross generation and operates Energy Development Corporation, the world’s largest integrated geothermal power producer.
3.10.2 EU Market Opportunities
KPMG in its study on the Philippine energy sector65 estimates that there will be an aggregate investment opportunity of about US$ 25 billion until 2030, making it possible for new players to enter the competitive markets in the Philippines to supplement the efforts of the existing players
Some of the opportunities in the Philippine power sector include:
Capacity development and resource diversification for the existing stakeholders to thrive in the changed environment
Upgrade of existing facilities that are operating at less than their rated capacities
Potential partnerships across the generation, transmission and distribution sectors
Smart energy systems, such as smart grid technologies
65 https://home.kpmg.com/ph/en/home/insights/2014/01/2013-2014energyreport.html
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The Philippines does not have massive production of conventional energy resources to fuel its economy. By default, even as it intensifies its use of fossil fuels, it will have no alternative but to continue to pursue the acceleration of renewable energy sources, so as to reduce the country’s dependence on fossil fuels in the long-term and minimise its exposure to price fluctuations in the international markets. Analysts expect that once renewable power producers adjust to the new reality of the energy market in the Philippines under the Duterte regime, there will be a renewed enthusiasm for the renewable energy market.
European Companies
Aggreko PLC
Aggreko PLC (Aggreko), which is based in Glasgow, Scotland, has presence in more than 100 locations in 30 different countries globally. Aggreko is a global leader in providing power and temperature control rental services. In Asia alone, Aggreko is providing services in 14 different countries including the Philippines.
One significant project in the Philippines that was successfully executed by Aggreko is the installation and operation of a 10 MW / 69 kV baseload power plant at the Panitan substation in the Capiz Province of Panay Island. Panay Island is located at the tail-end of the grid making it most vulnerable to power shortfalls in the Visayas region. The National Power Corporation (NPC) urgently required temporary power supply to supplement the grid and ease the occurrence of power interruptions in the region that were affecting an estimated 3.5 million people in Panay Island.
Aggreko supplied a complete package including generators, transformers, fuel tanks, and high voltage cabling. All equipment and ancillaries were mobilised, installed and commissioned less than 40 days after the contract-signing. The 69 kV power package was supplied to allow direct connection to the Panitan substation. This arrangement gave the additional advantage of minimising transmission losses and improving the voltage stability in the system.
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ABB Group
ABB is a Swedish/Swiss multinational corporation headquartered in Zurich, that works closely with utility, industry, transport and infrastructure customers in roughly 100 countries. With more than four decades at the forefront of digital technologies, it is a leader in digitally connected and enabled industrial equipment and systems with an installed base of more than 70,000 control systems connecting 70 million devices.
ABB supplied an integrated electrical and control solution for a new power plant to help meet peak demand and ease power shortages in the Philippines. ABB was awarded the contract by Istroenergo Group a.s. (IEG), the Slovakia-based power plant engineering, procurement and construction contractor, for its ability to provide a complete and fully integrated electrical and control solution on a fast-track basis.
Known as the San Gabriel Avion Open Cycle Gas-fired Power Plant Project, it was commissioned by Philippines-based energy company First Gen, and is located in Batangas City. The plant was to have peaking capability and be able to reach full load within 10 minutes of start-up and handle 2,000 rapid starts a year.
IEG and ABB delivered the project within 10 months. This enabled First Gen to start producing energy by April 2015 in time to counter the power shortfall in Luzon in the summer of 2015.
ABB was involved in the early stage of the project, right from the conceptual design optimisation and engineering stage to tendering phases. This close collaboration earned ABB the award while the overall early involvement and understanding in the project helped to significantly shorten the delivery and project execution time.
Today, the plant provides 97 MW of much-needed power for the island of Luzon - the economic and industrial hub of the Philippines and home to around half the country’s 100 million population.
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3.11 Energy Efficiency & Carbon Services
3.11.1 Market Overview
In March 2017, the Philippines formally joined the Paris Agreement. The next step for the country, according to its Climate Change Commission, will be to finalise and mainstream the country’s obligations under the agreement into national policies, plans and programmes. These obligations now include a conditional commitment to reduce emissions by 70% below projected levels by 2030.
This move is in line with the Philippines’ Energy Efficiency Roadmap 2014-2030, which is a set of directions from the government, put together with the help of the European Union. This strategic plan is directed at creating energy-efficiency across all sectors of economic activity in the Philippines, each of which has to play its part to reduce the total emissions of greenhouse gases and reduce the country’s carbon footprint. Specific targets that have been set by the DOE are in the table below. The roadmap also presents a set of strategies on a per sector basis (for the short, medium and long-term), in order to achieve the set targets.66
Implied annual % Annual Energy Sector savings Saved by 2030 (KTOE) (Total savings by 2030)
Transport 1.9% (25%) 4,861
Industry 1.3% (15%) 3,088
Residential Buildings 1.2% (20%) 1,432
Commercial Buildings 1.9% (25%) 1,206
Agriculture* 0.8% (10%) 78
TOTAL 1.6% (24%) 10,665
66https://www.doe.gov.ph/sites/default/files/pdf/announcements/energy_efficiency_and_conservation_roadmap2014-2030.pdf
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Implied annual % Annual Energy Sector savings Saved by 2030 (KTOE) (Total savings by 2030)
Economy-wide Improvement in Energy 3% Intensity
Table 12: Energy Efficiency Targets 2030 Source: Department of Energy, Philippines
The Energy Efficiency Roadmap has led to various initiatives being undertaken across various sectors in the country:
In February 2016, the Philippine Green Building (GB) Code, a referral code of the National Building Code, began implementation, covering hospitals, offices, hotels and schools with a minimum of 10,000 m2 gross floor area, or over 15,000 m2 for malls and over 20,000 m2 for residential condominiums. The GB Code, which sets minimum standards for energy efficiency, projects the baseline energy consumption for each of the covered building types. The application of the energy efficiency measures prescribed by the GB Code is designed to effectively reduce the Energy Use Intensity (EUI) of the buildings by at least 15-18% from baseline. These green measures include standards for the building envelope, mechanical systems, and electrical systems. The impact of the GB Code can be measured by energy savings, cost savings, and greenhouse gas emissions reduction.
In August 2016, Meralco, an energy giant in the Philippines, began to take steps to educate their customers about being energy efficient, and set up an appliance laboratory to help customers budget their consumption more effectively.
In May 2017, the Department of Energy (DOE) introduced the replacement of service vehicles of national government offices with hybrid cars as part of its campaign to promote energy efficiency and clean air across the country. Additional information measures on the country’s efforts to introduce cleaner vehicles are in Section 3.15.
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In June 2017, the Department of Energy has recently held the second of a series of public consultations aimed at developing a national energy efficiency standard for household appliances such as air conditioners, refrigerators and lighting products like LED lamps. Holding the dialogue in partnership with the European Union, the DOE led other government agencies such as the Department of Trade and Industry and private sector representatives in culling inputs from experts, resource persons and the general public. The collective inputs would be used to improve the proposed Particular Product Requirements (PPRs) that would help consumers choose wisely in buying household items that are energy efficient. Once finalised, the PPRs will form part of the Implementing Guidelines for the DOE’s Philippine Energy Standards and Labelling Programme (PESLP) which will help inform consumers on energy consumption and efficiency levels on specified appliances and fixtures.
Local Companies
ENGIE Services Asia Pacific
ENGIE Services Asia Pacific (APAC) represents the energy services business line of ENGIE Group in the Asia Pacific region which includes Australia, New Zealand, Singapore, Malaysia, Thailand and the Philippines. The company designs and implements energy efficient and environmental solutions through multi-technological services: engineering, facilities or energy services field.
Delta Dore, Inc
Delta Dore, Inc. is a subsidiary of the French Group Delta Dore and it specialises in designing and producing intelligent solutions to control and optimise energy consumption in all commercial and industrial buildings. In the Philippines, it is already working on a number of products including universities, casinos, retail stores, residential houses, etc.
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Design Science Incorporated
Design Science Incorporated is an infrastructure engineering company, providing professional services in planning, special studies, civil engineering, architecture, surveying, energy management, power audit and project management. It is presently getting into the fields of renewable energy and energy efficiency systems.
3.11.2 EU Entry Opportunities
According to the Philippine Department of Energy, the major users of electricity are the industrial sector (29.12%), residential (28.6%), and commercial (21%) while losses are at 15.2%. For the oil-consuming sectors, the biggest is power (37%), industrial (23%), and transport (13%). There are opportunities therefore for EU companies with expertise in the appropriate energy efficiency technologies across a broad spectrum of areas:
Energy savings in buildings: Buildings typically account for a large percentage of energy consumption and CO2 emissions, making this a key priority for the Philippines, particularly since today’s existing technologies makes it possible to reduce energy consumption in buildings by at least 50-80%. Opportunities here relate to building products and building renovation projects relating to the implementation of technologies such as energy-efficient windows, insulation materials, heat regulators, ventilation systems, efficient pumps and intelligent lighting.
Optimising industrial processes: Energy is an important driver of industrial productivity growth, and is a key production input in industrial processes. Energy intensive industries such as steel, chemical, paper, pharmaceutical, cement and construction materials, energy costs will need to optimise their industrial processes, facilities and equipment, in order to achieve substantial reductions in their consumption of energy, water and packaging.
Smart tools and systems for measuring, monitoring and enhancing energy efficiency, for use by energy companies and for other large energy users.
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European Companies
Trane Philippines
Trane is an Irish company specialising in climate control solutions. Trane's history began in 1885 in the US. Following a number of acquisitions the company now operates with a number of sister brands under Ingersoll Rand entity, with its corporate headquarters now located in Ireland.
In the Philippines, the company's solutions are distributed together with Filairco Inc., another subsidiary under Ingersoll Rand. Its main market in the country is building and HVAC needs, focusing on commercial and residential buildings. Trane is one of the energy service companies (ESCOS) accredited by the Department of Energy, which certifies that its solutions are energy- efficient. The products and services are distributed by a network of distributors in the country.
Schneider Electric
Schneider Electric is a French specialist in energy management and automation. It is headquartered in France, with presence in over 100 countries around the world. The company is currently reinforcing its position in the software, critical power and smart grid applications.
In the Philippines, Schneider Electric's main office is located in Taguig City, with other offices in Cebu and Davao. While it set up its corporate headquarters in the Philippines in 1996, the company has been supplying its products and services to the Philippines since the 1970s.
In April 2017 the company announced that the National Grid Corporation of the Philippines (NGCP) has expanded its enterprise data management solution to include Schneider Electric’s real-time data management software platform, called Wonderware eDNA, to optimise grid operations. The solution enables NGCP to enhance real-time visibility into operations for improved efficiency through advanced operational and information technologies. Over 21,000 circuit kilometres of transmission lines is maintained by NGCP to deliver safe and reliable power to customers across the country. Wonderware eDNA is used to consolidate data from control, monitoring and business system in a completely redundant server architecture to protect against an unexpected shutdown. Control centre operators are able to access high-fidelity, real-time data
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to improve decision support while aligning with a strategic initiative to upgrade, expand and strengthen transmission operations, and hence enhancing the energy efficiency along the grid operations.
Beyond business, Schneider Electric works with NGOs in the country, such as Gawad Kalinga, a Philippine non-profit foundation that works towards the alleviation of poverty in the country. The Schneider Foundation has also been active in the country: following the super typhoon Haiyan that hit the Philippines in 2013, Schneider Electric employees provided support to affected populations and participated in emergency and building programmes.
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3.12 Biofuel
3.12.1 Market Overview
The use of biofuels for transport is a major thrust of the Philippines’ plans to reduce the country's dependence on imported fossil fuels. Biodiesel from coconut is the natural alternative to imported diesel in the Philippines. Coconut oil is transesterified into coco methyl ester (CME) and is referred to as coco biodiesel when blended with fossil diesel.67 Bioethanol on the other hand is using sugarcane and molasses in Philippine ethanol production. The Biofuels Act or Republic Act (RA) 9367 was signed in January 2007 making the Philippines the first country in South East Asia to have biofuel legislation in place. The Act mandates that all liquid fuels for motors and engines that are sold in the Philippines shall contain locally sourced biofuels. The current blend mandates are 10% and 2% for ethanol and biodiesel, respectively.68
Biodiesel
The Biofuel Act mandates the amount of coconut oil for fuel to be blended with diesel may be increased taking into account the domestic supply and availability of locally sourced biodiesel. By 2015, the biodiesel blend should have been at 5%, and would be raised to 10% and 20% by 2020 and 2030, respectively.
However, the decline in coconut oil production due to infestations, the onslaught of typhoons in the past decade, and the current El Nino-induced droughts throughout the country have made the world’s top coconut oil producer unable to meet this target. This has led to high biodiesel costs - local biodiesel costs about three times more than fossil diesel prices, at around US$ 1,400- 1,500/mt ex-refinery basis (as of June 2016).
As such, the Philippine government has maintained the biodiesel blend at 2% since 2009, as it has concerns that an increase to a 5% blend will lead to an increase in the local diesel pump prices. In the Philippines, the price of diesel is considered to be a critical factor that can
67 http://industry.gov.ph/industry/biodiesel/ 68 https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Biofuels%20Annual_Manila_Philippines_8-16-2016.pdf
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significantly impact the prices of goods and commodities and transport fares, and thereby add to the cost of doing business.
In 2015, the National Biofuels Board commissioned the University of the Philippines-Los Banos to study on the impact of the higher blended biodiesel on the coconut industry to ensure farmers would benefit from the 5% blended biodiesel implementation. While the study is still on-going, it is reported that Professor U-Primo Rodriguez of University Los Banos has established a model that would ascertain benefits of a higher blend in biodiesel “down to the farmer level.”69
The Department of Energy (DOE) has, in May 2017, delayed anew the implementation of the higher blended biodiesel as the government continues to look for feedstock sources. According to the DOE, a 2% biodiesel blending on diesel will be maintained until 2019, based on its Biofuels Roadmap 2017-2040.
Ethanol
At present, the requirement is a 10% ethanol blend for gasoline. The 10% ethanol blend requirement will be increased to 20% by 2020. Unfortunately, local bioethanol producers lack the capacity in existing sugarcane distilleries to meet the domestic demand, forcing oil companies to import (cheaper) bioethanol to meet their requirements. The Philippines imported a total of 281 million litres of ethanol in 2016, of which approximately half is sourced from the USA.
Local ethanol production is expected to increase in 2017 due to a modest build-up in capacity. Two additional bioethanol plants, Cavite Biofuels Producer and Progreen Agricorp Inc. will add over 60 million litres of combined capacity, bringing the total bioethanol capacity to 340 million litres in 2017. This is around 50% of the mandatory requirement.
69 https://www.pressreader.com/philippines/the-philippine-star/20170507/282011852269448
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The following table lists the current bioethanol facilities in Philippines70:
Rated Producers Location Feedstock Capacity
Absolut Distillery Lian, Batangas 30 MW Molasses
Leyte Agri Corporation Ormoc City, Leyte 9 MW Molasses
Hydrous Alcohol, Far East Alcohol Corp. Apalit, Pampanga 15 MW Molasses
Cavite Biofuels Producers, Magallanes, Cavite 39 MW Sugarcane, Molasses Inc.
Bais City, Negros Universal Robina Corp. 30 MW Molasses, Sugar Oriental
Balayan Distillery, Inc. Balayan, Batangas 30 MW Molasses
Green Futures Sugarcane, Molasses, San Mariano, Isabela 54 MW Innovations, Inc. Raw Sugar
San Carlos City, Negros Sugarcane, Molasses, San Carlos Bioenergy, Inc. 40 MW Occidental Raw Sugar
Emperador Distilleries, Inc. Nasugbu, Batangas 30 MW Molasses
Emperador Distilleries, Inc. Balayan, Batangas 30 MW Sugar Syrup, Molasses
Tallsay City, Negros Kool Company, Inc. 14.12 MW Molasses Occidental
La Carlotta City, Negros Molasses, Raw Sugar, Roxol Bioenergy Corp. 30 MW Occidental Sugar Syrup
TOTAL RATED CAPACITY 351.12 MW
Table 13: Bioethanol facilities in the Philippines Source: Department of Energy, Philippines
70 http://www.sra.gov.ph/wp-content/uploads/downloads/2016/03/DIRECTORY-OF-BIOETHANOL-PRODUCERS-2015-20161.pdf
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A group of students from Philippines-based St Louis University created a taro-derived bioethanol fuel, called “Bio-Gab”. Their project helped them garner the Business and Idea Development Award 2016 from the Philippines Chamber of Commerce and Industry for their biofuel invention. Bio-Gab is produced by fermenting the taro (known locally as gaba) and extracting the oil, and is as effective as other petroleum products commonly used in cars.71
The Department of Energy has collaborated with academic institutes on several ethanol projects72:
Mariano Marcos State University (MMSU) in May 2012 on “Village Scale Production of MMSU Hydrous Ethanol as Feedstock for R & D in Biofuel Trials and Anhydrous Ethanol Production;”
Xavier University in July 2012 on “Bioethanol Production Potential of Different Cassava Varieties under Northern Mindanao Condition and Development of a Pilot-scale Cassava Bioethanol Plan;”
University of Philippines Visayas Foundation, Inc. in August 2012 on the project “Bioethanol Production from Macro-algae and Socio-ecological Implementations.”
Local Companies
Roxas Holdings, Inc. (RHI)
Roxas Holdings, Inc. is the largest integrated sugar business and the biggest ethanol producer in the Philippines. Its bioethanol strategic business unit comprises of two subsidiaries namely Roxol Bioenergy Corporation (RBC) and San Carlos Bioenergy, Inc. RBC is one of the pioneering bioethanol plants in the Philippines, located at La Carlota City, Negros Occidental. It produces approximately 150,000 litres of ethanol per day. As for San Carlos Bioenergy Inc, it is the first fuel bioethanol and co-generation facility in the Philippines and South East Asia.
71 http://biofuels-news.com/display_news/11605/Filipino_students_produce_bioethanol_from_taro_plant/ 72 NREP 2011-2030. DOE pdf
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Leyte Agri Corporation (LAC)
Leyte Agri Corporation is an affiliate of Philippine Agribusiness Development Corp. It partnered with an Indian firm, Praj Industries Ltd, to create a PHP 300 million (EUR 5.2 million) ethanol plant located in Leyte. It is designed to produce 20,000 to 27,000 litres of 95% ethanol per day.
Universal Robina Corporation (URC)
Universal Robina Corporation (URC) is one of the largest branded consumer food and beverage product companies in the Philippines. Additionally, it is in commodities (namely sugar refining, flour milling) and in agro-industrial businesses of farms (mainly hogs and animal feed milling) and related products. In addition to its core businesses, URC operates a US$ 35 million ethanol distillery plant at its sugar central facility in Manjuyod town. Its production capacity is 100,000 litres per day or 30 million litres of fuel ethanol yearly.
Balayan Distillery Inc.
Balayan Distillery Inc. operates a 30-million litre bioethanol plant in Calaca, Batangas using molasses as feedstock. Its bioethanol plant is constructed alongside its existing distillery in Batangas.
3.12.2 EU Entry Opportunities
The Joint Administrative Order (JAO) has developed a One-Stop-Shop to facilitate the entry of local and foreign investors into the biofuels sector. The One-Stop-Shop, to be established within the premises of the Sugar Regulatory Administration (SRA) in Diliman, Quezon City, will consolidate the services of the National Biofuels Board (NBB) member agencies to ensure smooth and harmonised assistance to its clientele.
The Philippines is targeting a blend of 20% for ethanol and biodiesel by 2030, making it more urgent for the country to find sustainable and economical biofuels and adopt innovative biofuel technologies as part of their long-term strategies
To ensure continuous R&D, the DOE has provided funding of PHP 50 million (EUR 869,887) for the establishment of a vehicle testing facility located at the Department of Mechanical Engineering
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Laboratory, UP-Diliman, Quezon City. Roundtable discussions with stakeholders on technical verification and relevance of emerging biofuel technologies are also integral parts of the DOE’s initiatives on research and development.
European Companies
Gazasia Ltd
Gazasia Ltd (Gazasia) is an alternative fuel company, providing waste-to-fuel solutions in Asia. The company was incorporated in 2010 and is based in London, United Kingdom.
Gazasia was incorporated to develop the biogas industry in the Philippines together with one of the major energy companies in the country – Aboitiz Equity Ventures. In 2012, both companies signed a US$ 50 million deal to develop a biofuel plant in Lian, Batangas province. Through this contract, a joint-venture company was established, called Aseagas.
Gazasia will provide technical expertise, specialised equipment and project management for the project for five years.73 The plant utilises organic waste from Absolut Distillers Inc and other landfill waste. Through the process of separating methane and carbon dioxide, the plant generates carbon neutral fuel in the form of liquid bio-methane, which is to be sold as car fuel.74 Figures released by Aboitiz Equity Ventures estimate that the facility will have an annual capacity of 8,000 metric tons of biomethane, fueling up to 200 buses or heavy trucks per year.
73 http://gazasia.com/gazasia-signs-joint-venture-agreement-with-philippine-energy-company-aboitiz/ 74 http://www.philstar.com/business/2014/03/27/1305429/aboitiz-gazasia-build-50-m-biogas-plant
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3.13 Cogeneration Technology
3.13.1 Market Overview
Cogeneration technology, in particular using sugarcane bagasse as feedstock, is starting to take off in the Philippines as the success of such projects has already been demonstrated in the country. The country recognises that the technology offers renewable energy options that promote sustainable development, takes advantage of domestic resources, increases profitability and competitiveness in the industry, and cost-effectively addresses climate change mitigation and other environmental goals. Surplus organic materials such as sugar cane are proving to be a cheap and sustainable feedstock to power co-generation plants.
According to the Philippine Department of Energy, the following 12 cogeneration projects have been implemented/awarded in the country as of December 2016.
Producers Location Capacity Project/Feedstock
Green Future Bagasse-Fired San Mariano, Luzon 19 MW Innovations Inc. Cogeneration Power Plant
Central Azucarera CADPI Bagasse Nasugbu, Luzon 31.8 MW Don Pedro, Inc. Cogeneration Facility
First Farmers Talisay City in Negros FFHC Bagasse-Fired 21 MW Holding Corp. Occidental, Visayas Cogeneration Power Plant
Central Azucarera de Passi City, Iloilo, CASA Bagasse-Fired 15 MW San Antonio Visayas Cogeneration Power Plant
San Carlos City in San Carlos SCBI Multi-Feedstock Negros Occidental, 8 MW Bioenergy Inc. Cogeneration Power Plant Visayas
Hawaiian-Philippine 28.58 M HPCo Bagasse Silay City, Visayas Company W Cogeneration Power Plant
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Producers Location Capacity Project/Feedstock
Victorias Milling VMCI Bagasse-Fired Victorias City, Visayas 63 MW Company Inc. Cogeneration Power Plant
URC Bagasse-Fired Universal Robina Kabankalan, Visayas 46 MW Biomass Cogeneration Corporation (URC) Power Plant
Central Azucarera de Bais City in Negros Bagasse-Fired 25 MW Bais Oriental, Visayas Cogeneration Power Plant
Crystal Sugar Bukidnon Maramag, CSCI Bagasse-Fired 35.9 MW Company, Inc. Mindanao Cogeneration Facility
PTCI Rice Husk-Fired Philippine Trade Mindanao 3 MW Biomass Cogeneration Centre, Inc. Facility
Green Earth GEEC MW Biomass Enersource Buluan, Mindanao 3.5 MW Cogeneration System Corporation
Table 14: Cogeneration facilities in the Philippines Source: Department of Energy, Philippines
Given the relatively small number of projects in the country, it appears that the full potential of cogeneration technologies has not as yet been realised. According to a World Alliance for Decentralised Energy (WADE) report on Bagasse Cogeneration, bagasse-based cogeneration could deliver up to 25% of current power demand requirements, particularly in cane producing countries like the Philippines.
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Local Companies
URC SURE (Sugar and Renewables)
URC SURE is comprised of two major divisions, namely: the URC Sugar Division and the URC Distillery. One of its ventures is in the renewable energy business. It is registered with the Department of Energy as a renewable energy developer of biomass fired power cogeneration plant and as a manufacturer of Bio-ethanol. In 2014, URC inaugurated its fuel ethanol plant, which is located in Kabankalan City, Negros Occidental. The company aims to add revenue streams, provide alternative uses for the company’s sugarcane, while at the same time support the government’s renewable energy programme. Its cogeneration plant uses bagasse as feedstock and provides 46 MW of power to the national grid.
Green Future Innovations Inc.
GFII is a joint venture corporation between Filipino and Japanese partners and is a domestic corporation duly-registered under Philippine Laws. Taking its cue from the Philippine Renewable Energy Programme, GFII undertook to build and operate a large-scale bioethanol and cogeneration plant located in San Mariano, in the Isabela Ecofuel Agro-Industrial Ecozone. The facility produces 54 million litres of ethanol from an 11,000-hectare plantation annually. The leftover bagasse and sugarcane residual produce 19 MW of power, 13 of which are sold back to the national grid, supporting the Luzon power grid.
Crystal Sugar Company, Inc.
The Crystal Sugar Company, Inc., a Filipino sugar milling company, was conceived to service the growing requirements of the sugarcane farms of the Bukidnon District which then covered about 40,000 hectares, with approximately 5,000 active sugarcane farmers. When the mill’s capacity could no longer cope with the expanding sugarcane areas and the increasing number of sugarcane planters, this prompted Crystal Sugar Company to put up a Bagasse-Fired Cogeneration Facility in May 2010 in response to the renewable energy programme of the government.
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Victorias Milling Company, Inc. (VMC)
Victorias Milling Company, Inc. (VMC) is engaged in integrated raw and refined sugar manufacturing with plant facilities in Negros Occidental. It operates mill and refinery facilities for sugar and allied products and engineering services. It is one of the largest sugar operations in the world. The company’s EUR 35.6 million 40 MW cogeneration biomass power plant, which is to run mainly on sugar cane residue, is set to be completed by September 2017. 25 MW out of the total capacity will be exported to the grid, while the remaining 15 MW will be for the company’s own use.
3.13.2 EU Entry Opportunities
The sugar industry in the Philippines has significant scope for the development of modern high-pressure cogeneration plants. As demonstrated by the projects listed in the table above, there is a demand from large agricultural businesses looking to supply their own energy requirements as well as to obtain additional revenue from the sale of excess electricity. European companies with the relevant capabilities will find this to be a market worth developing.
Energy companies are also looking to diversify their sources of power. Eastern Petroleum, for example, is planning to put up a series of biomass-fired cogeneration plants in the country. The first, a PHP 4.1 billion (US$ 9 million) 23.5 MW biomass-fired plant in Agusan del Norte, is currently under development by Caraga Renewable Energy Corp. According to its CEO, “We are exploring all possibilities for diversification and since there’s a lot of interest in ethanol and biomass, we are looking at building two separate cogeneration projects. In doing so, we will be producing electricity and ethanol for local requirements.”75
75 http://www.decentralized-energy.com/articles/2015/07/philippine-petroleum-group-planning-biomass-cogen-units.html and http://www.sunstar.com.ph/bacolod/business/2016/02/24/sugar-mills-urged-start-cogeneration-now-458995
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European Companies
Bronzeoak Philippines Inc.
Bronzeoak Philippines Inc., a subsidiary of UK-based firm Bronzeoak Group Limited, develops and implements renewable energy projects in the Philippines. The company began its operation in 2003 in the Philippines by taking power cogeneration opportunity assessments of different sugar mill facilities.76
In 2006, the company worked to develop the San Carlos BioEnergy Power Plant, the first integrated sugarcane-based ethanol and power cogeneration plant in Asia. Apart from producing fuel ethanol and sugar syrup, the project utilises agricultural residues to generate power which demonstrated the commitment to environmental responsibility and indigenous rural energy. The plant can produce 40 million litres of fuel ethanol, 40 million kilograms of sugar syrup, and generate 60 million kW hours of electricity per year.
Bronzeoak Philippines continued to expand its renewable energy portfolio in the country by constructing three more biomass power plants fuelled by agricultural residues and completing 6 solar power farms.77
Pöyry Energy, Inc.
Pöyry Energy, Inc. is a Finnish consulting and engineering company that serves clients in the energy, industry, and infrastructure sectors. The company provides services across the whole project lifecycle such as management consulting, engineering services, project management, and operations support.
In the Philippines, Pöyry Energy was commissioned to do the Front-End Engineering Design of a 40 MW cogeneration facility in Negros Occidental, Philippines in 2015. The project was a joint venture (JV) between Roxas Holdings, Inc. and Global Business Power Corp., that aims to
76 http://www.bronzeoakph.com/and https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapid=136802940 77 http://www.bronzeoakph.com/eppc.html and http://www.bronzeoakph.com/background.html
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explore alternative energy sources to support the increasing energy requirements of the country. Pöyry also conducted the feasibility study of the project which included a detailed study of its technical requirements and investment cost.78
78 http://www.gbpc.com.ph/2015/05/roxas-holdings-global-business-jv-taps-engineering-contractor-for-40-mw-plant/ and http://www.goodnewsfinland.com/poyry-wins-philippines-design-contract/
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3.14 Carbon Capture and Storage
3.14.1 Market Overview
The Philippines currently does not have any carbon capture and storage (CCS) projects. CCS employs technology that prevents the release of large amounts of carbon dioxide into the atmosphere from fossil fuel used in power generation and other industries.
Technical factors, cost-competitiveness, environmental and public health risks, and the lack of enforcement in regulations mandating reductions in carbon emissions are seen as the major challenges in implementing CCS in the Philippines. The country also lies within the Pacific Ring of Fire, a complex area within the Pacific Ocean where tectonism and volcanism occur, which might considerably limit the potential for carbon capture and storage sites in the country. According to the Asian Development Bank, post-combustion capture is considered the most applicable system in the Philippines because it involves very minimal changes in the combustion process of existing or new power plant facilities.
Considering the Asia-Pacific region, the Global CCS Institute reports that most developments in the sector are concentrated in Australia, China, South Korea, and Japan.79 In South East Asia, only Indonesia has recently taken initial steps to explore the possibility of large-scale applications. The country has launched the Gundih CCS pilot project, located in central Java Province, which aims to use CO2 captured from the Gundih gas field and inject around 30 tonnes per day over a two year period (for total injection of around 20,000 tonnes) into an uneconomic oil and gas reservoir. Design and construction of the surface facilities for CO2 injection is targeted for implementation by the end of 2018 or early 2019. The feasibility study was undertaken by the Bandung Institute of Technology, with funding from the Asian Development Bank, and the Japan International Cooperation Agency (JICA).
79 www.globalccsinstitute.com/projects
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Figure 14: Map of CCS Projects in the Asia Pacific Region Source: Global CCS Institute
3.14.2 EU Entry Opportunities
Although there are no present CCS projects in the Philippines, several storage options have been cited as being potential test beds for CCS technologies in the country. The following facilities are said to have carbon dioxide storage capabilities; however, further research is needed to assess their potential.
Oil and Gas Fields: Large offshore gas fields in the Philippines are potentially geologic sites for carbon storage. However, they are still currently producing gas and their petroleum resources are not expected to be depleted until 2024 at the earliest.
Saline Aquifers: Among the sixteen sedimentary basins in the country, the Cagayan and Central Luzon basins have sufficient data for carbon dioxide storage screenings and proved to be clear of faults.
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Geothermal Fields: The Philippines has geothermal fields located in Batangas, Laguna, and Bataan that need further testing for CCS.
Ophiolites: The Zambales Ophiolite (iron and magnesium rock formation) is the most promising among the ophiolite for carbon storage in the country.
While the Philippines has announced that it is receptive to the use of CCS, the country will be prioritising the use of renewable energies until CCS technologies become more feasible there.
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3.15 Electric Vehicles
3.15.1 Market Overview
Electric vehicles (EV) is a promising area for green technologies in the Philippines. The country is poised to be South East Asia's electric car hub with the government and private sectors working closely together to encourage the development of EV industry. Among the drivers of the growth of EV industry in the Philippines are the sustainable development goal by the government, the establishment of green cities across the country, and the requirement for a sound transport service that is environmentally friendly for the tourism industry.
The Philippines is one of the few countries in the region with its own national standard (the Philippines National Standard, PNS) for EVs, signalling the intensity of interest that is focused on the industry in the local economy. Currently the industry provides job opportunities for 14,840 people, involving 28 companies manufacturing various types of EVs (11 parts and components manufacturers and seven importers altogether). The locally manufactured and assembled EVs include a range of 2-wheel, 3-wheel and 4-wheel varieties. A total of 69,145 units of EV are expected to be in the market in 2017, almost doubled the numbers from 2013, with 38,220 units.80
The EV industry in the Philippines is financially backed by various local and regional agencies. The Asian Development Bank (ADB) for instance, has allocated the Philippines a US$ 500 million facility to support the country’s ambition to become the region's EV manufacturing hub.81 Green EV financing schemes are available from institutions such as the Development Bank of the Philippines, the Land Bank of the Philippines, Orix Metro, CARD, Negosyong Pinoy and Proximity Funding. The CTI-PFAN (Climate Technology Initiative - Private Financing Advisory Network) also offers support to the EV sector by matching EV companies with public and private funding institutions to finance capital expenditures, operating expenses and retail financing.82
80 http://industry.gov.ph/industry/e-vehicles/ 81 http://www.talinoev.com/about/ 82 https://www.doe.gov.ph/energist/index.php/76-categorised/alternative-energy-technology/e-vehicles/9842-domestic-electric-vehicle-industry- gets-going-april-25-2016
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EVs are used to transport local residents and transient employees in major cities in Metro Manila. Electric jeeps and electric tricycles are more commonly found in urban areas and major business districts. The growing tourism industry also calls for resorts and local government units to invest in EVs to provide transportation services for the tourists while caring for the environment and reducing the carbon emissions at popular tourist spots, such as the islands of Boracay and Palawan.
Figure 15: Jeepney, Transportation in the Philippines
The Electric Vehicle Association of the Philippines (EVAP) is the national association for EV manufacturers, partners and innovators in the country. First established in 2009, there are currently 43 active members, comprising both local and international companies. EVAP envisions a national development programme for EVs through the existing Motor Vehicle Development Programme for the automotive industry. The programme is being implemented over a period of 10 years through four stages; the first stage in 2013 was the launch stage; the second stage between 2014-2015 for building up the local market and production capacity enhancement; the third stage between 2016-2018 for local and export market expansion, as well as the vertical and horizontal integration with the local automotive industry; and lastly the fourth between 2019-2023
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for the full integration, regional and global, developmental evolution in technological advancement and market size up.
There are several policies related to EV industry implemented in the Philippines to encourage the growth of the industry in the local market:
Under the Investment Priorities Plan (IPP) 2014 - 2016, among the initiatives prioritised for the EV industry is the establishment of charging stations for EVs, referring to service stations designed to fast-charge multiple vehicles simultaneously similar to the regular gasoline/diesel stations or a network of at least five charging stands. Applicants for the investment are required to submit their application for registration together with an endorsement from the Department of Energy - Investment Promotion Office (DOE-IPO).
To encourage the EVs' manufacturing capability and facilitate the EVs' assembling industry in the local market, Executive Order 488 (s. 2006)83 modified the rate of import duty on components, parts and accessories for the assembly of hybrid, electric, flexible fuel and compressed natural gas motor vehicles to zero rates.
A number of the Philippines National Standard (PNS) for EVs were established, namely:
Philippines National Standards (PNS)
PNS ISO 6469-1:2008
Electric road vehicles – Safety specifications – Part 1: On-board electrical energy storage
PNS ISO 6469-2:2008
Electric road vehicles – Safety specifications – Part 2: Functional safety means and protection against failures
PNS ISO 6469-3:2008
Electric road vehicles – Safety specifications – Part 3: Protection of persons against electric hazards
83 Executive Orders in the Philippines are styled to have the year it was signed placed in brackets after the number of the Executive Orders. Executive Oder 488 (s. 2006) means the Executive Order 488 was signed in 2006.
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Philippines National Standards (PNS)
PNS ISO 8713:2008
Electric road vehicles – Vocabulary ISO published in 2005
PNS ISO 8714:2008
Electric road vehicles - Reference energy consumption and range – Test Procedures for passenger cars and light commercial vehicles
PNS ISO 8715:2008
Electric road vehicles – Road operating characteristics
PNS ISO 23274:2008
Hybrid-electric road vehicles – Exhaust emissions and fuel consumption measurements – Non-externally chargeable vehicles
Table 15: Philippines National Standards (PNS) for Electric Vehicles
The EV industry in the Philippines is attractive to not only local players, but also to foreign companies. Three Japanese e-tricycle (ETrike) companies are currently present in the country engaging in the manufacture of e-tricycles.
Figure 16: E-Tricycles in the Philippines
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The companies are BEMAC Electric Transportation Philippines Inc. with a factory in Calamba, Prozza Hirose Manufacturing Inc. and Terra Motors Corp., both in Cebu. Petrol- The Philippines is putting the necessary powered tricycles are popular with tourists infrastructure in place to support the development of and locals alike, and are commonly found the sector, including EV manufacturing and on the road. assembling, reliable after-sales service, experienced fleet transport operation, finance or leasing options, There are an estimated 2.8 million battery charging and swapping stations tricycles currently on the road, most of them propelled by the old, two-stroke gasoline- or diesel-fed engines, each capable of emitting about 4.5 metric tons of CO2 annually. A third of the country’s greenhouse gas emissions is attributable to the transport sector, particularly from tricycles, jeepneys and buses, making the transition to usage of e- tricycles an essential move.
In developing a sustainable industry, EVAP members in the Philippines realise that the industry requires an ecosystem that is supportive towards the use of EV. In order to sell the EVs, there is a need to be able to offer a complete mass transport solution package including EVs manufacturing and assembling, reliable after-sales service, experienced fleet transport operation, finance or leasing options, and battery charging and swapping stations. Realising this, the players in the country are putting the necessary infrastructure in place.
The challenges for companies in selling electric cars to the Philippine consumers include the scarcity of charging stations and the steep price of electric vehicles compared to the regular vehicles in the market. With the arrival of locally manufactured electric cars the EV industry players are hoping that the government will continue to support the EV segment in the market. Thus far, the government has made an effort to incentivise the industry, and various programmes are being implemented by the Bureau of Investments to develop the sector further. The government is also planning to implement a new regulation that will exempt both electric and hybrid vehicles from excise tax.
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Local Companies
The Philippine Utility Vehicle (PhUV) Inc.
PhUV is considered the pioneer of EV mass assembly in the Philippines. Initially the company was established by a group of local auto parts manufacturers planning to create a utility vehicle and manufacture a Pinoy Utility Vehicle. Due to the growing need in the market for eco-friendly vehicles for mass public transport, the company evolved into an EV manufacturer. It received the 'pioneer EV manufacturer in the Philippines' status from the Board of Investments (BOI) for the production of 4-wheel, 3-wheel and 2-wheel EVs. It also holds the rights to 3 EV products from the Intellectual Property Office (IPO).
PhUV has supplied electric jeepneys (eJeepneys) to Makati Green Routes (a programme that offers commuters free transportation on eJeepneys in prescribed routes along the city of Makati), as well as to public and private institutions, resorts, government agencies, malls, industrial zones and residential subdivisions. The company will also soon provide eJeepneys to Filinvest City in Alabang, to be operated by the Electric Vehicle Expansion Enterprises Inc. (EVEEI), an experienced EV public transport operator. Apart from providing the EVs, PhUV also supplies spare parts and offers support and after-sales services.
Etro EV Inc.
Etro is another local company that has received a pioneer status in manufacturing electric motorcycles. Founded in 2010, it designs and produces its own e-motorcycle called Agila, using lithium ion batteries for extended usage. The e-motorcycle is powerful enough to pull a sidecar to carry passengers and goods for public transport in the country. Etro's engineering offices are based in the state of Washington, USA. The e-motorcycle unit alone is priced at the equivalent of US$ 2,000. Its development cost in the Philippines was touted to be only 20% of what it would cost in the USA.
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Figure 17: Etro Agila Motorcycle with Sidecar
Clima Mobility
Clima Mobility unveiled its prototype of an electric car called Genius EV in 2016. Genius EV is a fully electric car with five-person seating capacity. It runs on a liquid-cooled 72 volt 10 kW motor. The battery is fully charged in four to five hours, and the car is capable of travelling up to 72 km with the top speed of 64 km/h. The car is set to be sold between PHP 450,000 to PHP 500,000 (approximately EUR 8,000 to 8,900) on a build-to-order basis. Its targeted market includes local government units' patrol cars or service vehicles, delivery vehicles for corporations, and as a passenger car for individuals looking for an environmentally friendly car.
3.15.2 EU Entry Opportunities
There is a strong demand for EVs in the Philippines, particularly in big universities, tourist areas like Boracay and Palawan Islands, and in urban areas including Manila, Quezon City and Las Pinas. The main driver of the demand is the need for a sustainable transport system for the public and tourists without jeopardising the environment. With a supportive ecosystem being set up in the Philippines, the demand for EVs is expected to continue to grow.
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There are a number of EV assemblers and manufacturers already in operation in the Philippines, unlike in many of the other South East Asian countries, which are only beginning to develop their EV markets. This represents an opportunity for EU companies looking to supply technology, parts and components to the sector, particularly as the country does not impose any tariffs for imported parts and components for EVs. This also offers possibilities to collaborate with local players to set up a base in the country as it is poised to be the EV hub for the region.
A number of green financing schemes are being offered by local and regional financial institutions in the Philippines. These financial supports are open to both local and international companies that are engaged in improving the EV industry in the country.
The Asian Development Bank is also supporting the growth of the EV industry. Recently the ADB and the Department of Energy awarded an initial order of 3,000 e-tricycles to BEMAC, the Japanese e-tricycle manufacturer based in Calamba, to run a pilot test of a projected programme quantity of 100,000 e-tricycles over the next few years.
European Companies
Robert Bosch Inc. (Germany)
Robert Bosch is an advanced technology and service company focusing on multiple divisions including automotive aftermarket, power tools, security systems, thermotechnology, drive and control technology, and packaging technology. Headquartered in Germany, the company was founded in 1886.
In the Philippines the company focuses on the automotive aftermarket and power tools as its major divisions. The company directly imports and distributes the products, as well as provides after-sales service facilities to its customers. It has appointed local agents to manage its other divisions, namely packaging technology, drive and control technologies and security systems.
Robert Bosch has an office in Taguig City, and a technical centre in Makati City. It first entered the market in 1926 by trading and distribution of Bosch products through its appointed agency, F. E. Zuellig Inc, and used its presence in the Philippines to expand to the regional markets. In 1995,
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Robert Bosch Inc. Philippines was incorporated. The company opened two more business hubs in Cebu and Davao in 2013, expanding its geographical footprint in the country. It currently employs 378 employees.
Robert Bosch set up a network of Bosch Car Service (BCS) workshops in the Philippines. The BCS is essentially a partnership between Bosch and local workshops. Bosch helps the workshops surmount their technical limitations by providing training and service support, including the installation of diagnostic systems. Through this tie-up, motorists are able to gain access to a wider network of one-stop shops for diagnostics and spare parts. The independent workshops, on the other hand, are able to offer a wider range of services, tap more customers and increase their income opportunities. As of January 2015 there were a total of 34 accredited workshops available across the country.
Together with the Diesel Centres and Diesel Service Workshops, Bosch helps to improve the air quality in the Philippines by providing cross-brand expertise and services in automotive electrics using advanced diagnostic equipment. It is also an active member of EVAP. In the renewable energy sector, the company through its renewable energy arm Rexroth AG has developed advanced technologies in wind turbines and charging power batteries for electronic vehicles.84
Power tools and automotive parts were the largest revenue generators for the company in the Philippines. The company announced in its financial briefing last June 2016 that its fiscal year for 2015 ended with $50 million in consolidated sales, recording a strong double digit growth of over 35% compared to the previous fiscal year, making the Philippines one of its fastest growing market in the region.85
84 http://business.inquirer.net/185880/bosch-celebrates-20th-year-of-innovation-in-ph 85 http://www.bworldonline.com/content.php?section=Corporate&title=bosch-plans-further-philippine-expansion&id=138269
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4. Regulations
4.1 General Import Procedures
As a general rule, importations into the Philippines are subject to customs duties, taxes and import processing fees unless there is a specific legal basis for exemption. Import taxes vary from 0% to 65% according to the product. Goods imported into Philippines are subject to Value Added Tax (VAT) at a rate of 12% calculated over the Cost, Insurance and Freight (CIF) value plus any applicable duty.
Excise Taxes, which comprises of Specific Tax and Ad Valorem Tax, are applicable on goods manufactured in the country as well as goods imported. Excise taxes, both specific and ad valorem, are levied on a range of goods, including: lubricating oils and grease; processed gas; coal; cars, non-essential goods; mineral products; naphtha and other similar products of distillation; asphalt and petroleum and other fuel products.
VAT Exemptions
Companies that register with the Board of Investment (BOI) may qualify for a number of incentives. For example, BOI registered enterprises with bonded manufacturing warehouses enjoy exemption from customs duties and national internal revenue taxes on importation of required supplies/spare parts. In addition, they will be given a 10-year period to avail exemption from wharfage dues and any export tax, impost and fees on non-traditional export products. BOI registered enterprises may also import machinery, equipment, spare parts and accessories subject to zero percent duty. Furthermore, Philippines also allows tax exemption on breeding stocks and genetic materials within 10 years (tax credit of 100%) as well as tax credit on raw materials and supplies.
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4.2 Key Acts
The energy sector in the Philippines is regulated by two main acts, namely the Electric Power Industry Reform Act (EPIRA: Republic Act No. 9136) and the Renewable Energy Act (Republic Act No. 9513).
Electric Power Industry Reform Act (EPIRA)
EPIRA, which was approved by the President in June 2001, and is aimed at improving the reliability of power supply and reduce the tariffs of energy in the country. Prior to the creation of this act, the energy sector in the Philippines was treated by the government as a vertically integrated industry.
Under EPIRA a number of entities were formed to regulate and organise the energy sector while the National Power Corporation (NPC) was privatised, enabling the power market to be opened to competition.
EPIRA enables the electric power industry in the Philippines to be reformed by enabling more private sector participation and ensuring power security. The primary objectives of the act are:
to ensure and accelerate total electrification;
to ensure the quality, reliability, security and affordability of the supply of electric power;
to ensure transparent and reasonable prices in a regime of free and fair competition;
to encourage private sector capital and participation into the sector
To achieve these objectives EPIRA set to separate power industry into four sectors comprising generation, transmission, distribution and supply. The separation of the industry led to creation of different entities targeting at reorganising the sector, namely the Wholesale Electricity Spot Market, the Power Sector Assets and Liabilities Management Corporation (PSALM), and the National Transmission Corporation (TRANSCO). In line with its creation, EPIRA focuses on support from the private sector and deployment of renewable energy for electricity supply to remote areas. The requirements for energy players under this act include:
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Section 6 (Provision of Service in Unviable Areas) in Rule 7 on Distribution Section provides that, in remote and unviable areas where the distribution utility is unable to serve for any reason as authorised by the ERC in accordance with the Act, the areas shall be opened to other qualified third parties that may provide the service pursuant to Rule 14 on Provision of Electricity by Qualified Third Parties (QTP).
Section 3 (Obligations of SPUG) in Rule 13 on Missionary Electrification prescribes that, whenever feasible, SPUG (small power utilities group) shall utilise Renewable Energy Resources.
Through this act, participation from the private sector is possible under two general schemes: the QTP for the unviable areas and the New Power Producer for SPUG generation.
Renewable Energy Act
The Renewable Energy Act was approved by the President in December 2008 for exploration, development and utilisation of various forms of renewable energy resources together with hybridisation of the sources with other energy sources. The act has led to the creation of the National Renewable Energy Board (NREB) composed of representatives from a number of government agencies and relevant stakeholders, which is tasked to fix the Renewable Portfolio Standard (RPS) for the sector on a per grid basis, as well as the minimum capacities for renewable power generation in off-grid areas across the country.
The Philippines’ Renewable Energy Act is deemed as the first comprehensive legislation on renewable energy in South East Asia. The primary goal of the act is to achieve energy self- reliance through the accelerated exploration and development of renewable energy resources. To attain this objective, the Renewable Energy Act offers various fiscal and non-fiscal incentives to private sector investors, renewable energy equipment manufacturers and suppliers, and renewable energy project developers. The Renewable Portfolio Standard (RPS) and feed-in-tariff (FIT) are among the non-fiscal incentives offered under the act. FIT guarantees a fixed price for a minimum of 12 years for systems within RPS, which mandates a minimum percentage of renewable energy generation for on-grid systems. Nevertheless, RPS is not yet set and is undergoing public consultation and design.
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There are few requirements for project developers and related manufacturers or suppliers in order to utilise the incentives. Project developers must first acquire a renewable energy service contract from the Department of Energy’s Renewable Energy Management Bureau. The renewable energy equipment manufacturers, fabricators and suppliers must also be accredited to benefit from the incentives.
4.3 Key Agencies
Department of Energy of the Philippines
Formed in 1992, the Department of Energy of the Philippines is the key department of the government in regulating the energy sector in the country. It was created in accordance to the Department of Energy Act 1992 (RA No. 7638), responsible for preparing, integrating, coordinating, supervising and controlling all plans, programmes, projects and activities of the Government of the Philippines relative to energy exploration, development, utilisation, distribution and conservation. It also undertakes mandates of EPIRA and the Renewable Energy Act of 2008.
The Renewable Energy Management Bureau (REMB) is a part of the Department of Energy. It is tasked to formulate and implement policies, plans and programmes related to the accelerated development, transformation, utilisation and commercialisation of renewable energy resources including emerging energy technologies. There are five divisions under REMB namely biomass; hydropower and ocean energy; geothermal; solar; and wind power. Apart from these five divisions there is a special division which provides technical services to the National Renewable Energy Board (NREB).
The National Renewable Energy Board (NREB) was created in accordance with the Renewable Energy Act. The Board comprises representatives of a number of government agencies and relevant stakeholders to the energy sector. A technical secretariat from the Renewable Energy Management Bureau from the Department of Energy supports the Board, especially from the Technical Services Management Division. The roles of NREB are as follows:
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To evaluate and recommend to the Department of Energy the mandated RPS and minimum renewable energy generation capacities in off-grid areas as it deems appropriate.
To recommend specific action to facilitate the implementation of the National Renewable Energy Programme (NREP).
To monitor and review the implementation of the NREP, including compliance with the RPS and minimum renewable energy generation capacities in off-grid areas.
To oversee and monitor the utilisation of the Renewable Energy Trust Fund. This fund’s implementing guidelines have not yet been finalised.
To cause or initiate the establishment of a one-stop facilitation scheme to accelerate implementation of renewable energy projects.
Energy Regulatory Commission
The Energy Regulatory Commission (EPC) was previously known as the Energy Regulatory Board (ERB). Under EPIRA the ERB was transformed into the ERC to strengthen its role in the sector. As the only regulatory body created through EPIRA it controls all four components of the sector which are the generation, transmission, distribution and supply of energy across the Philippines. Its roles are to promote competition, encourage market development, ensure customer choice and penalise abuse of market power in the restructured electricity industry.
National Transmission Corporation
The National Transmission Corporation (TRANSCO) is the system operator of the electrical transmission and sub-transmission system for the whole country. It takes up the authority and responsibility of the National Power Corporation for the planning, construction and centralised operation and maintenance of its high voltage transmission facilities, including grid interconnections.
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Wholesale Electricity Spot Market
The Wholesale Electricity Spot Market is established to provide the mechanism for identifying and setting the price of actual variations from the quantities transacted under contracts between sellers and purchasers of electricity in the Philippines. Ideally it was intended to create a more competitive electricity market and offer a reasonable and more affordable rate to end-users. The market is governed by the Philippine Electricity Market Corporation, which was incorporated on the initiative of the Department of Energy.
Power Sector Assets and Liabilities Management Corporation
The Power Sector Assets and Liabilities Management Corporation (PSALM) is owned and controlled by the government. It takes ownership of the National Power Corporation’s generation assets, liabilities, independent power producer (IPP) contracts, real estate and other disposable assets. The main objective of establishing PSALM is to manage the orderly privatisation of the National Power Corporation’s assets and IPP contracts in order to liquidate all NPC financial obligations in the best possible means. Through the sale of NPC assets, the private sector participation in the energy sector in the country has also increased.
4.4 Government Tenders
As the Philippines commits to transparency for its public tenders, all procurement, regardless of cost, shall be conducted through competitive bidding. To this aim, the PhilGEPS was created. The PhilGEPS is the single, centralised electronic portal that serves as the primary and definitive source of information on government procurement.
Government agencies, as well as suppliers, contractors, manufacturers, distributors and consultants, are mandated to register and use the system in the conduct of procurement of goods, civil works and consulting services. All government agencies are required to post the following in the PhilGEPS Electronic Bulletin Board:
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Invitation to Bid and all notices of other procurement opportunities
Supplemental / Bid bulletins
Contract awards, the corresponding notices of award, including the reasons for award of contract
Results of bidding and related information
Other notices, announcements, information for interested parties
Bid matching of procurement opportunities with appropriate PhilGEPS registered suppliers is being done automatically by the system once a government buyer posts an opportunity.
PhilGEPS includes a list of common-use goods, supplies, materials and equipment called Electronic Catalogue. Through the use of the PhilGEPS, transparency in government procurement is enhanced since opportunities to trade with government and the ensuing transactions are provided online. PhilGEPS can be accessed here: www.philgeps.gov.ph
As a general rule, eligible bidders should be at least 60% Filipino Equity. The exception however is that foreign bidders are eligible to participate when provided for under treaty or international agreement; when the goods sought to be procured are not available from local suppliers; or when there is a need to prevent situations that defeat competition or restrain trade.
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5. Annex
5.1 List of Useful Contacts
The Energy Regulatory Commission (ERC) Pacific Center Building San Miguel Avenue, Ortigas Center Pasig City,1600 Metro Manila, Philippines Tel: (+632) 689-5343 Fax: (+632) 631-5816 Email: [email protected] Website: www.erc.gov.ph
Department of Energy (DOE) Energy Center, Rizal Drive Bonifacio Global City Taguig City, 1632, Philippines Tel: 840-2134 Fax: 812-6194 Email: [email protected] Website: www.doe.gov.ph
The National Power Corporation BIR Road corner Quezon Avenue Diliman, Quezon City, Philippines Tel: (+632) 921-3541 Fax: (+632) 921-2468 Email: [email protected] Website: www.napocor.gov.ph
PNOC Renewables Corporation PNOC Building 5 Energy Center, Rizal Drive BGC, Taguig City 1634, Metro Manila, Philippines Tel: (+632) 840-3079 Email: [email protected] Website: www.pnoc-rc.com.ph
Philippine Rural Electric Cooperative Association (PHILRECA) 4th Floor, CASMAN Bldg, 1198 Quezon Avenue, Quezon City Tel: (+632) 374-2538 Email: [email protected] Website: www.philreca.org
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Philippine Solar Power Alliance (PSPA) 1402 Paragon Plaza, EDSA cor. Reliance St. Mandaluyong City, Philippines 1550, Philippines Tel: (+632) 234-2281 Email: [email protected] Website: www.philsolaralliance.org
Private Electric Power Operators Association (PEPOA) 8, F Strata 100 Building, F. Ortigas Jr. Rd. Ortigas Center, Pasig, Metro Manila, Philippines Tel: (+632) 635-6291 Website: www.angelfire.com
Renewable Energy Association of the Philippines (REAP) 39-A JPRizal Ext., West Rembo Makati City, Philippines Tel: (+632) 645-6187 Fax: (+632) 645-6187 Email: [email protected] Website: www.facebook.com/1REAP
The Philippine Independent Power Producers Association, Inc. (PIPPA) Unit 2408 24th Floor Prestige Tower F. Ortigas, Jr. Road Ortigas Center, Pasig City 1605, Philippines Tel: (+632) 633-3844 Email: [email protected] Website: www.pippaonline.org
Board of Investments (BOI) Ground Floor Industry and Investments Bldg 385 Sen. Gil Puyat Ave Makati City, Philippines Tel: 895.36.40 Fax: 895.83.22 Email: [email protected] Website: investphilippines.gov.ph
European Chamber of Commerce of the Philippines (ECCP) 19/F Philippine AXA Life Centre Sen. Gil Puyat Avenue corner Tindalo Street, San Antonio, Makati City, Metro Manila, 1200, Philippines Tel: (+632) 845.1324 Fax: (+632) 845.1395 Email: [email protected] Website:www.eccp.com
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Philippine Economic Zone Authority (PEZA) Building 5, DOE-PNOC Complex Energy Center, Rizal Drive Bonifacio Global City Taguig City, Metro Manila, 1634, Philippines Tel: 551-3438 Fax: 551-3436 Email: [email protected] Website: www.peza.gov.ph
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5.2 Starting a Business in the Philippines
Why the Philippines?
The Philippines has emerged as an attractive market for foreign companies due to its strong economic, democratic and demographic fundamentals. Moreover, the country, with its strategic location, is a gateway to the dynamic Asian market.
Registering your business
The SEC, the Securities and Exchange Commission, is the government agency responsible for the registration, licensing, regulation, and supervision of all corporations and partnerships organised in the Philippines, including foreign corporations licensed to engage in business or to establish branch offices in the Philippines. Registration with the SEC grants the entity with the corporate franchise or juridical personality to operate and transact business in the Philippines.
The processing and approval of the papers generally take around 15 working days from official acceptance of the application.
A majority of the directors must be residents of the Philippines. The number of directors must be at least five but not more than 15. Hence, if there are five directors, at least three must be residents.
At least 25% of the authorised capital stock of a domestic corporation must be subscribed and at least 25% of the subscription must be paid. However, subscriptions by alien individuals or foreign entities must generally be fully paid, except in cases where the law provides for the specific amount of paid-up capital.
Government Agencies
The government of the Philippines provides support and assistance to help businesses grow in the country. European companies looking to set up, operate and establish a business in the Philippines will find it easier with assistance from the following government agencies:
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The Philippine Board of Investments (BOI), an attached agency of Department of Trade and Industry (DTI), is the lead government agency responsible for the promotion of investments in the Philippines. Taking the lead in the promotion of investments, BOI assists Filipino and foreign investors to venture and prosper in desirable areas of economic activities. The BOI assists businesses with the following services:
▪ Advisory, Actualisation and Aftercare
▪ Industry Updates and Information
▪ Marketing & Promotions
▪ Incentives
▪ Policy Advocacy
The Philippine Economic Zone Authority (PEZA) is attached to the Department of Trade and Industry and is tasked to promote investments, extend assistance, register, and grant incentives to, and facilitate the business operations of, investors in export-oriented manufacturing and service facilities inside selected areas throughout the country. It oversees and administers incentives to developers/operators of, and locators in, world-class, ready-to- occupy, environmentally-friendly, secured and competitively priced Special Economic Zones.
Business Locations
The urban centres of Metro Manila, Metro Cebu, and Davao City, as well as the government- owned and private special economic zones, are magnets of economic activities. The Philippine Assistance Programme is helping in the acceleration of regional development by sponsoring projects in Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon Provinces), Iloilo, Samar, the Iligan-Cagayan de Oro corridor, and General Santos. The Calabarzon Project has resulted in the proliferation of privately-owned industrial estates to address the needs of foreign investors.
The Subic Naval Base in Olongapo City, the Clark Air Base in Angeles City, and other former US military bases with excellent infrastructure were converted into special economic zones.
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The Bases Conversion Development Authority succeeded in taking over these installations and implementing its master plans for these areas.
Investors’ interest in these areas has been tremendous and is perceived to be sustainable over the next five to ten years. The main factors for increased investors’ interest in these areas include fiscal incentives, full administration support for the development of these areas, strategic location, and excellent infrastructure, particularly the presence of an excellent harbour and international airports that meet global standards in both Subic and Clark.
Recently, the government has taken significant strides in promoting the country as an attractive information technology destination. As of January 2015, there are 209 IT Parks and Centres which have been proclaimed as IT Ecozones by the President of the Philippines and are now registered with PEZA.
Finding a Distributor in the Philippines
An agent or distributor arrangement is the most common method in entering the Philippine market. Partnering with a local business is also recommended, as entering the Philippine market presents some challenges to foreign companies. This is due in part to a small number of family-owned conglomerates that dominate key sectors and, in some cases, create high barriers to entry.
Philippines-based trade associations, chambers of commerce, and foreign commercial offices within EU Member State embassies are all good places to start the search for a distributor in the country. International business consultants with experience in helping foreign companies can also prove invaluable by facilitating introductions to qualified distributors. It is always best to meet a prospective distributor in person, and to check references.
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5.3 Useful Statistics
Electricity Utilities Power Year Residential Commercial Industrial Others Total Sales Own Use Losses
2003 15,357 11,106 15,188 1,069 42,720 3,410 6,810 52,941
2004 15,920 11,785 15,012 1,359 44,076 4,654 7,228 55,957
2005 16,031 12,245 15,705 1,177 45,159 4,591 6,817 56,568
2006 15,830 12,679 15,888 1,275 45,672 4,227 6,885 56,784
2007 16,376 13,470 16,522 1,641 48,009 3,994 7,608 59,612
2008 16,644 14,136 17,031 1,395 49,206 3,935 7,680 60,821
2009 17,504 14,756 17,084 1,523 50,868 3,524 7,542 61,934
2010 18,833 16,261 18,576 1,596 55,266 4,677 7,800 67,743
2011 18,694 16,624 19,334 1,446 56,098 5,398 7,680 69,176
2012 19,695 17,777 20,071 1,668 59,211 5,351 8,360 72,922
2013 20,614 18,304 20,677 1,971 61,566 5,959 7,741 75,266
2014 20,969 18,761 21,429 2,186 63,345 6,461 7,455 77,261
2015 22,747 20,085 22,514 2,462 67,808 7,124 7,481 82,413
2016 25,631 21,770 24,117 2,634 74,153 8,357 8,288 90,798
% Share 28.2% 24.0% 26.6% 2.9% 81.7% 9.2% 9.1% 100.0% Table 16: Power Consumption by Sector Source: Department of Energy Unit: Gwh
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Year Luzon Visayas Mindanao Total 2003 37,535 8,842 6,564 52,941
2004 39,854 9,016 7,087 55,957
2005 40,627 8,698 7,243 56,568 2006 41,241 8,129 7,414 56,784 2007 43,620 8,102 7,890 59,612
2008 44,200 8,650 7,972 60,821
2009 44,975 8,724 8,235 61,934 2010 50,265 9,075 8,403 67,743 2011 50,017 10,456 8,703 69,176
2012 52,312 11,483 9,127 72,922
2013 54,820 11,100 9,347 75,266 2014 56,766 11,014 9,481 77,261 2015 60,113 12,170 10,130 82,413
2016 66,498 12,955 11,345 90,798
% Share 73.2% 14.3% 12.5% 100.0% Table 17: Power Generation by Grid Source: Department of Energy Unit: Gwh
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Renewable Oil- Combined Gas Oil Natural Year Coal Diesel Energy Geothermal Hydro Biomass Solar Wind Total Based Cycle Turbine Thermal Gas (RE)
2003 14,939 7,170 439 5,509 42 1,180 13,139 17,692 9,822 7,870 0 0 0 52,941
2004 16,194 8,504 738 6,253 82 1,431 12,384 18,874 10,282 8,593 0 0 0 55,957
2005 15,257 6,141 91 5,717 25 309 16,861 18,308 9,902 8,387 0 2 17 56,568
2006 15,294 4,665 239 4,152 0 274 16,366 20,459 10,465 9,939 0 1 53 56,784
2007 16,837 5,148 653 4,162 9 324 18,789 18,837 10,215 8,563 0 1 58 59,612
2008 15,749 4,868 513 3,660 36 658 19,576 20,628 10,723 9,843 0 1 61 60,821
2009 16,476 5,381 639 3,771 62 909 19,887 20,191 10,324 9,788 14 1 64 61,934
2010 23,301 7,101 1,202 4,532 3 1,364 19,518 17,823 9,929 7,803 27 1 62 67,743
2011 25,342 3,398 124 2,762 0 512 20,591 19,845 9,942 9,698 115 1 88 69,176
2012 28,265 4,254 227 3,332 0 695 19,642 20,762 10,250 10,252 183 1 75 72,922
2013 32,081 4,491 247 3,805 0 438 18,791 19,903 9,605 10,019 212 1 66 75,266
2014 33,054 5,708 515 4,730 0 463 18,690 19,810 10,308 9,137 196 17 152 77,261
2015 36,686 5,886 276 5,521 10 80 18,878 20,963 11,044 8,665 367 139 748 82,413
2016 43,303 5,661 694 4,722 0 245 19,854 21,979 11,070 8,111 726 1,097 975 90,798
% 47.7% 6.2% 0.8% 5.2% 0.0% 0.3% 21.9% 24.2% 12.2% 8.9% 0.8% 1.2% 1.1% 100.0% Share
Table 17: Power Generation by Source Source: Department of Energy Unit: Gwh
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Renewable Natural Biomass, Year Coal Oil Based Energy Geothermal Hydro Total Gas Solar, Wind (RE) 2003 3,958 3,604 2,763 4,799 1,932 2,867 0 15,124 2004 3,967 3,669 2,763 5,149 1,932 3,217 0 15,548 2005 3,967 3,663 2,763 5,226 1,978 3,222 26 15,619 2006 4,177 3,602 2,763 5,261 1,978 3,257 26 15,803 2007 4,213 3,616 2,834 5,277 1,958 3,293 26 15,941 2008 4,213 3,353 2,831 5,284 1,958 3,291 34 15,681 2009 4,277 3,193 2,831 5,309 1,953 3,291 64 15,610 2010 4,867 3,193 2,861 5,438 1,966 3,400 73 16,359 2011 4,917 2,994 2,861 5,391 1,783 3,491 117 16,162 2012 5,568 3,074 2,862 5,521 1,848 3,521 153 17,025 2013 5,568 3,353 2,862 5,541 1,868 3,521 153 17,325 2014 5,708 3,476 2,862 5,898 1,918 3,543 437 17,944 2015 5,963 3,610 2,862 6,330 1,917 3,600 812 18,765 2016 7,419 3,616 3,431 6,958 1,916 3,618 1,424 21,423 % Share 34.6% 16.9% 16.0% 32.5% 8.9% 16.9% 6.6% 100.0% Table 18: Installed Generating Capacity Source: Department of Energy Unit: MW
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Renewable Natural Biomass, Year Coal Oil Based Energy Geothermal Hydro Total Gas Solar, Wind (RE)
2003 3,691 3,175 2,703 3,828 1,568 2,260 0 13,397
2004 3,696 3,216 2,703 4,251 1,560 2,690 1 13,865
2005 3,432 3,043 2,703 4,419 1,685 2,725 10 13,598
2006 3,638 2,879 2,703 4,407 1,682 2,715 10 13,627
2007 3,467 2,670 2,703 4,650 1,667 2,973 10 13,490
2008 3,412 2,702 2,562 4,370 1,387 2,950 34 13,047
2009 3,813 2,528 2,700 4,285 1,322 2,919 44 13,326
2010 4,245 2,488 2,756 4,413 1,350 3,021 41 13,902
2011 4,651 2,579 2,770 4,478 1,434 2,963 80 14,477
2012 5,206 2,561 2,760 4,539 1,462 2,983 94 15,066
2013 5,206 2,846 2,760 4,559 1,482 2,983 94 15,371
2014 5,378 2,705 2,760 4,789 1,607 2,982 201 15,633
2015 5,613 2,734 2,759 5,325 1,601 3,073 651 16,432
2016 6,979 2,821 3,291 6,005 1,689 3,181 1,135 19,097
% Share 36.5% 14.8% 17.2% 31.4% 8.8% 16.7% 5.9% 100.0% Table 19: Dependable Generating Capacity Source: Department of Energy Unit: MW
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Renewable Natural Biomass, Year Coal Oil Based Energy Geothermal Hydro Total Gas Solar, Wind (RE)
2003 3,769 2,514 2,763 2,765 907 1,858 0 11,812
2004 3,769 2,514 2,763 3,115 907 2,208 0 12,162
2005 3,769 2,404 2,763 3,192 954 2,213 25 12,128
2006 3,769 2,333 2,763 3,226 954 2,247 25 12,092
2007 3,783 2,363 2,834 3,194 886 2,284 25 12,174
2008 3,783 2,100 2,831 3,199 886 2,281 33 11,913
2009 3,849 1,984 2,831 3,199 886 2,280 34 11,863
2010 3,849 1,984 2,861 3,287 899 2,346 42 11,981
2011 3,879 1,757 2,861 3,242 751 2,440 50 11,739
2012 4,531 1,778 2,861 3,358 824 2,462 72 12,528
2013 4,531 2,020 2,861 3,378 844 2,462 71 12,790
2014 4,671 2,033 2,861 3,649 844 2,471 333 13,213
2015 4,812 2,133 2,861 3,863 844 2,528 490 13,668
2016 5,294 2,133 3,430 4,120 843 2,537 740 14,977
% Share 35.3% 14.2% 22.9% 27.5% 5.6% 16.9% 4.9% 100.0% Table 20: Installed Generating Capacity in Luzon Source: Department of Energy Unit: MW
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Renewable Natural Biomass, Year Coal Oil Based Energy Geothermal Hydro Total Gas Solar, Wind (RE) 2003 189 530 0 927 916 12 0 1,647
2004 198 596 0 927 916 12 0 1,721
2005 198 668 0 927 916 12 0 1,793
2006 198 678 0 927 916 12 0 1,803
2007 198 659 0 976 964 12 0 1,833
2008 198 659 0 977 964 13 0 1,835
2009 196 615 0 1,007 964 13 29 1,818
2010 786 615 0 1,006 964 13 29 2,407
2011 806 615 0 981 923 13 44 2,402
2012 806 670 1 971 915 11 44 2,448
2013 806 670 1 971 915 11 44 2,448
2014 806 670 1 1,043 965 11 66 2,520
2015 769 670 1 1,242 965 11 266 2,683
2016 1,054 655 1 1,574 965 20 590 3,284
% Share 32.1% 19.9% 0.0% 47.9% 29.4% 0.6% 18.0% 100.0% Table 21: Installed Generating Capacity in Visayas Source: Department of Energy Unit: MW
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Renewable Natural Biomass, Year Coal Oil Based Energy Geothermal Hydro Total Gas Solar, Wind (RE) 2003 0 559 0 1,106 108 998 0 1,665
2004 0 559 0 1,106 108 998 0 1,665
2005 0 591 0 1,107 108 998 1 1,698
2006 210 591 0 1,107 108 998 1 1,908
2007 232 594 0 1,107 108 998 1 1,933
2008 232 594 0 1,107 108 998 1 1,933
2009 232 594 0 1,103 103 998 1 1,929
2010 232 594 0 1,145 103 1,040 1 1,971
2011 232 622 0 1,168 108 1,038 22 2,022
2012 232 625 0 1,192 108 1,047 37 2,049
2013 232 663 0 1,192 108 1,047 37 2,087
2014 232 773 0 1,206 108 1,061 37 2,211
2015 382 807 0 1,225 108 1,061 56 2,414
2016 1,070 828 0 1,264 108 1,061 95 3,162
% Share 33.8% 26.2% 0.0% 40.0% 3.4% 33.5% 3.0% 100.0% Table 22: Installed Generating Capacity in Mindanao Source: Department of Energy Unit: MW
Green Energy Technologies - Philippines Market Study - Page 151 of 178
Renewable Natural Biomass, Year Coal Oil Based Energy Geothermal Hydro Total Gas Solar, Wind (RE)
2003 3,551 2,236 2,703 2,031 604 1,428 0 10,521
2004 3,551 2,236 2,703 2,381 604 1,778 0 10,871
2005 3,287 2,059 2,703 2,547 727 1,811 9 10,596
2006 3,287 1,928 2,703 2,547 726 1,813 9 10,466
2007 3,112 1,713 2,703 2,782 714 2,059 9 10,311
2008 3,056 1,742 2,562 2,507 439 2,035 33 9,868
2009 3,450 1,617 2,700 2,464 431 1,999 34 10,230
2010 3,531 1,586 2,756 2,626 500 2,101 25 10,498
2011 3,664 1,633 2,770 2,757 587 2,124 46 10,824
2012 4,219 1,586 2,759 2,785 587 2,147 52 11,349
2013 4,219 1,736 2,759 2,805 607 2,147 52 11,519
2014 4,391 1,507 2,759 2,965 692 2,131 142 11,622
2015 4,512 1,585 2,759 3,322 691 2,224 407 12,179
2016 4,970 1,655 3,291 3,684 777 2,323 584 13,600
% Share 36.5% 12.2% 24.2% 27.1% 5.7% 17.1% 4.3% 100.0%
Table 23: Dependable Generating Capacity in Luzon Source: Department of Energy Unit: MW
Green Energy Technologies - Philippines Market Study - Page 152 of 178
Renewable Natural Biomass, Year Coal Oil Based Energy Geothermal Hydro Total Gas Solar, Wind (RE)
2003 140 416 0 868 856 12 0 1,424
2004 145 507 0 868 856 12 0 1,520
2005 145 493 0 868 856 12 0 1,506
2006 140 459 0 868 856 12 0 1,467
2007 155 479 0 865 853 12 0 1,498
2008 155 482 0 862 849 13 0 1,499
2009 153 426 0 813 792 13 9 1,392
2010 501 464 0 779 751 13 15 1,745
2011 777 476 0 784 745 13 26 2,037
2012 777 505 1 820 777 11 32 2,103
2013 777 505 1 820 777 11 32 2,103
2014 777 505 1 877 817 11 49 2,160
2015 761 425 0 1,042 813 11 219 2,228
2016 1,050 434 0 1,329 813 18 498 2,813
% Share 37.3% 15.4% 0.0% 47.2% 28.9% 0.6% 17.7% 100.0%
Table 24: Dependable Generating Capacity in Visayas Source: Department of Energy Unit: MW
Green Energy Technologies - Philippines Market Study - Page 153 of 178
Renewable Natural Biomass, Year Coal Oil Based Energy Geothermal Hydro Total Gas Solar, Wind (RE)
2003 0 524 0 929 108 821 0 1,453
2004 0 473 0 1,002 100 901 1 1,475
2005 0 491 0 1,005 101 902 1 1,496
2006 210 491 0 992 100 891 1 1,694
2007 200 478 0 1,003 100 902 1 1,681
2008 201 478 0 1,001 98 902 1 1,680
2009 210 485 0 1,008 100 907 1 1,703
2010 212 438 0 1,008 100 907 1 1,658
2011 210 469 0 937 102 827 8 1,616
2012 210 470 0 934 98 826 10 1,614
2013 210 605 0 934 98 826 10 1,749
2014 210 693 0 948 98 840 10 1,851
2015 340 724 0 961 98 837 25 2,025
2016 959 733 0 993 100 840 53 2,684
% Share 35.7% 27.3% 0.0% 37.0% 3.7% 31.3% 2.0% 100.0%
Table 25: Dependable Generating Capacity in Mindanao Source: Department of Energy Unit: MW
Green Energy Technologies - Philippines Market Study - Page 154 of 178
Renewable Oil- Combined Gas Oil Natural Total Year Coal Diesel Energy Geothermal Hydro Biomass Solar Wind based Cycle Turbine Thermal Gas Generation (RE)
2003 14,351,121 3,595,860 438,755 2,317,101 1,737 838,268 13,139,410 6,448,239 2,600,465 3,847,774 0 37,534,630
2004 15,548,335 4,590,814 738,437 2,688,194 183 1,164,000 12,384,467 7,330,296 3,033,417 4,296,879 0 39,853,911
2005 14,653,275 2,021,641 90,608 1,910,774 1,433 18,826 16,860,917 7,090,897 2,742,203 4,331,224 17,469 40,626,730
2006 14,099,158 1,711,415 238,870 1,315,067 0 157,478 16,365,960 9,064,924 3,519,417 5,492,271 53,235 41,241,457
2007 14,417,796 2,192,048 652,834 1,348,033 0 191,182 18,789,414 8,220,653 3,600,503 4,562,309 57,842 43,619,911
2008 13,503,727 1,928,244 513,442 952,751 0 462,051 19,575,855 9,191,708 3,729,921 5,400,402 61,386 44,199,534
2009 14,091,376 1,864,281 638,520 594,559 0 631,203 19,886,827 9,132,372 3,515,964 5,549,227 2,752 64,428 44,974,855
2010 20,046,584 3,287,173 1,202,040 1,003,383 0 1,081,749 19,517,854 7,413,115 3,323,495 4,013,529 14,375 61,717 50,264,725
2011 19,681,127 1,290,685 123,556 890,321 0 276,807 20,591,323 8,454,125 3,485,813 4,836,470 43,638 88,204 50,017,259
2012 21,877,501 1,800,321 227,354 1,099,123 0 473,844 19,641,527 8,993,077 3,588,417 5,292,482 36,839 75,339 52,312,426
2013 25,755,945 1,600,626 247,159 1,183,466 0 170,001 18,783,471 8,679,476 3,398,601 5,155,521 59,699 65,655 54,819,517
2014 27,346,492 2,342,360 514,980 1,520,521 0 306,859 18,685,808 8,391,821 3,817,330 4,357,160 65,279 152,052 56,766,481
2015 29,679,511 1,844,787 275,892 1,483,116 10,290 75,489 18,877,915 9,710,650 4,096,454 4,768,825 187,188 66,427 591,756 60,112,863
2016 33,143,458 2,561,831 693,685 1,622,749 499 244,898 19,853,783 10,938,477 4,226,913 5,011,100 438,807 494,946 766,711 66,497,549
% 49.8% 3.9% 1.0% 2.4% 0.0% 0.4% 29.9% 16.4% 6.4% 7.5% 0.7% 0.7% 1.2% 100.0% Share
Table 26: Gross Power Generation by Plant Type in Luzon Source: Department of Energy Unit: Mwh
Green Energy Technologies - Philippines Market Study - Page 155 of 178
Oil- Gas Oil Natural Renewable Total Year Coal Diesel Geothermal Hydro Biomass Solar Wind based Turbine Thermal Gas Energy (RE) Generation
2003 587,626 1,860,563 1,480,745 40,236 339,582 6,393,997 6,360,964 33,033 8,842,186
2004 646,077 1,997,708 1,649,383 82,094 266,231 6,372,594 6,338,317 34,277 9,016,379
2005 603,903 1,799,876 1,486,431 23,862 289,582 6,294,573 6,267,377 27,196 8,698,352
2006 718,663 1,281,766 1,165,700 193 115,873 6,128,295 6,100,202 28,093 8,128,723
2007 848,428 1,477,089 1,334,868 9,045 133,176 5,776,075 5,746,878 29,197 8,101,593
2008 745,686 1,664,802 1,432,627 36,485 195,690 6,239,206 6,199,159 40,047 8,649,694
2009 822,007 1,863,970 1,554,155 61,972 247,843 6,038,321 5,984,957 42,406 10,957 8,724,298
2010 1,528,682 1,726,580 1,446,180 3,164 277,236 5,820,003 5,771,218 35,889 12,896 9,075,264
2011 4,032,202 683,226 448,577 0 234,649 5,740,314 5,615,561 53,117 71,636 10,455,743
2012 4,701,053 734,172 514,274 0 219,899 6,047,489 5,930,484 46,161 70,844 11,482,714
2013 4,689,683 796,470 528,780 0 267,689 7,815 5,605,626 5,463,017 36,936 105,673 11,099,593
2014 4,449,483 765,893 614,558 0 151,335 4,269 5,794,279 5,627,241 35,475 116,523 15,040 11,013,924
2015 4,968,437 672,207 672,207 0 0 0 6,529,839 6,105,383 38,375 158,864 70,559 156,658 12,170,483
2016 5,270,242 637,405 637,405 0 0 0 7,047,239 5,974,487 63,532 276,053 524,658 208,509 12,954,886
% 40.7% 4.9% 4.9% 0.0% 0.0% 0.0% 54.4% 46.1% 0.5% 2.1% 4.0% 1.6% 100.0% Share
Table 27: Gross Power Generation by Plant Type in Visayas Source: Department of Energy Unit: Mwh
Green Energy Technologies - Philippines Market Study - Page 156 of 178
Oil- Oil Natural Renewable Total Year Coal Diesel Geothermal Hydro Biomass Solar Wind based Thermal Gas Energy (RE) Generation
2003 0 1,713,693 1,711,563 2,129 4,850,029 861,015 3,989,013 0 6,563,721
2004 0 1,915,799 1,915,500 299 5,171,340 909,815 4,261,525 0 7,087,140
2005 0 2,319,927 2,319,772 155 4,922,732 892,863 4,028,352 1,517 7,242,659
2006 476,245 1,671,619 1,671,376 242 5,266,085 845,660 4,419,049 1,376 7,413,949
2007 1,570,872 1,478,868 1,478,775 93 4,840,544 867,308 3,971,927 1,309 7,890,283
2008 1,499,380 1,275,288 1,275,010 278 5,197,088 793,700 4,402,084 1,304 7,971,756
2009 1,562,753 1,652,415 1,622,575 29,840 5,020,111 822,926 4,195,934 1,252 8,235,278
2010 1,725,839 2,087,250 2,082,124 5,126 4,589,680 834,439 3,753,987 1,254 8,402,769
2011 1,628,848 1,423,688 1,423,433 256 5,650,112 840,956 4,807,945 1,212 8,702,648
2012 1,686,314 1,719,521 1,718,684 837 5,721,036 731,089 4,913,491 75,136 1,320 9,126,871
2013 1,635,380 2,093,504 2,092,831 673 5,617,847 742,980 4,826,851 46,602 1,414 9,346,731
2014 1,257,542 2,599,495 2,595,139 4,356 5,623,555 863,542 4,744,638 13,897 1,477 9,480,592
2015 2,037,738 3,369,442 3,365,393 4,050 4,722,686 841,857 3,857,878 21,403 1,548 10,129,866
2016 4,889,542 2,462,172 2,462,172 0 0 3,993,743 869,002 3,036,282 11,046 77,412 0 11,345,457
% 43.1% 21.7% 21.7% 0.0% 0.0% 35.2% 7.7% 26.8% 0.1% 0.7% 0.0% 100.0% Share Table 28: Gross Power Generation by Plant Type in Mindanao Source: Department of Energy Unit: Mwh
Green Energy Technologies - Philippines Market Study - Page 157 of 178
Year Luzon Visayas Mindanao Total Generation
2003 37,534,630 8,842,186 6,563,721 52,940,537
2004 39,853,911 9,016,379 7,087,140 55,957,430
2005 40,626,730 8,698,352 7,242,659 56,567,740
2006 41,241,457 8,128,723 7,413,949 56,784,130
2007 43,619,911 8,101,593 7,890,283 59,611,788
2008 44,199,534 8,649,694 7,971,756 60,820,985
2009 44,974,855 8,724,298 8,235,278 61,934,432
2010 50,264,725 9,075,264 8,402,769 67,742,759
2011 50,017,259 10,455,743 8,702,648 69,175,650
2012 52,312,426 11,482,714 9,126,871 72,922,011
2013 54,819,517 11,099,593 9,346,731 75,265,842
2014 56,766,481 11,013,924 9,480,592 77,260,997
2015 60,112,863 12,170,483 10,129,866 82,413,213
2016 66,497,549 12,954,886 11,345,457 90,797,891
% Share 73.2% 14.3% 12.5% 100.0% Table 29: Gross Power Generation by Grid Source: Department of Energy Unit: Mwh
Green Energy Technologies - Philippines Market Study - Page 158 of 178
Oil- Combined Gas Oil Natural Renewable Total Year Coal Diesel Geothermal Hydro Biomass Solar Wind based Cycle Turbine Thermal Gas Energy (RE) Generation
2003 14,938,748 7,170,115 438,755 5,509,409 41,972 1,179,979 13,139,410 17,692,264 9,822,444 7,869,820 0 0 0 52,940,537
2004 16,194,412 8,504,321 738,437 6,253,077 82,277 1,430,529 12,384,467 18,874,230 10,281,550 8,592,681 0 0 0 55,957,430
2005 15,257,178 6,141,444 90,608 5,716,977 25,295 308,564 16,860,917 18,308,202 9,902,443 8,386,773 0 1,517 17,469 56,567,740
2006 15,294,066 4,664,799 238,870 4,152,144 193 273,593 16,365,960 20,459,304 10,465,279 9,939,413 0 1,376 53,235 56,784,130
2007 16,837,096 5,148,006 652,834 4,161,675 9,045 324,452 18,789,414 18,837,272 10,214,688 8,563,433 0 1,309 57,842 59,611,788
2008 15,748,794 4,868,333 513,442 3,660,388 36,485 658,018 19,575,855 20,628,003 10,722,780 9,842,534 0 1,304 61,386 60,820,985
2009 16,476,136 5,380,666 638,520 3,771,289 61,972 908,885 19,886,827 20,190,804 10,323,847 9,787,567 13,710 1,252 64,428 61,934,432
2010 23,301,105 7,101,002 1,202,040 4,531,688 3,164 1,364,111 19,517,854 17,822,798 9,929,152 7,803,405 27,270 1,254 61,717 67,742,759
2011 25,342,176 3,397,599 123,556 2,762,331 0 511,712 20,591,323 19,844,551 9,942,330 9,697,532 115,274 1,212 88,204 69,175,650
2012 28,264,867 4,254,015 227,354 3,332,081 0 694,580 19,641,527 20,761,602 10,249,990 10,252,134 182,819 1,320 75,339 72,922,011
2013 32,081,007 4,490,600 247,159 3,805,078 0 438,363 18,791,286 19,902,949 9,604,598 10,019,308 211,973 1,414 65,655 75,265,842
2014 33,053,518 5,707,748 514,980 4,730,219 0 462,550 18,690,077 19,809,655 10,308,113 9,137,273 195,699 16,517 152,052 77,260,997
2015 36,685,685 5,886,437 275,892 5,520,716 10,290 79,539 18,877,915 20,963,175 11,043,694 8,665,078 367,456 138,534 748,414 82,413,213
2016 43,303,242 5,661,408 693,685 4,722,326 499 244,898 19,853,783 21,979,459 11,070,403 8,110,915 725,906 1,097,016 975,219 90,797,891
% 47.7% 6.2% 0.8% 5.2% 0.0% 0.3% 21.9% 24.2% 12.2% 8.9% 0.8% 1.2% 1.1% 100.0% Share
Table 30: Gross Power Generation by Plant Type Source: Department of Energy Unit: Mwh
Green Energy Technologies - Philippines Market Study - Page 159 of 178
System Total Year Residential Commercial Industrial Others Total Sales Own-Use Loss Consumption
2003 11,795,920 9,649,022 10,476,442 547,072 32,468,456 2,825,775 5,190,782 40,485,013
2004 12,114,757 10,138,137 10,148,988 622,797 33,024,680 3,856,057 5,508,907 42,389,644
2005 12,037,503 10,495,060 10,669,917 588,557 33,791,038 3,738,405 5,033,287 42,562,730
2006 11,801,709 10,865,084 10,562,722 711,883 33,941,398 3,443,789 5,039,235 42,424,421
2007 12,129,245 11,503,251 11,033,946 768,443 35,434,885 3,140,721 5,764,135 44,339,741
2008 12,235,803 12,065,744 11,522,202 791,669 36,615,419 3,069,218 5,632,154 45,316,792
2009 12,801,337 12,519,046 11,745,017 794,033 37,859,434 2,666,262 5,109,530 45,635,225
2010 13,865,105 13,684,231 13,030,042 809,417 41,388,794 3,729,375 5,203,908 50,322,077
2011 13,558,194 13,975,287 13,393,636 779,129 41,706,246 4,113,775 5,144,668 50,964,688
2012 14,262,257 14,905,458 14,085,532 810,429 44,063,677 3,952,498 5,706,961 53,723,136
2013 15,055,561 15,509,869 14,378,824 858,922 45,803,175 4,549,543 5,383,067 55,735,785
2014 15,304,067 16,102,599 14,939,121 894,719 47,240,505 5,040,459 5,207,774 57,488,739
2015 16,527,747 17,272,475 15,875,875 913,226 50,589,323 5,598,130 4,911,892 61,099,345
2016 18,650,032 18,726,890 17,094,048 942,178 55,413,149 6,517,613 5,289,833 67,220,596
% Share 27.7% 27.9% 25.4% 1.4% 82.4% 9.7% 7.9% 100.0%
Table 31: Electricity Consumption (Sales, Utility Use, System Loss) in Luzon Source: Department of Energy Unit: Mwh
Green Energy Technologies - Philippines Market Study - Page 160 of 178
Total System Total Year Residential Commercial Industrial Others Own-Use Sales Loss Consumption
2003 1,784,959 665,614 2,022,241 245,000 4,717,814 484,481 742,299 5,944,594
2004 1,872,854 783,096 1,999,039 376,787 5,031,776 661,113 787,806 6,480,696
2005 1,999,023 861,240 2,104,110 319,986 5,284,359 679,446 798,547 6,762,352
2006 2,036,357 910,005 2,340,239 264,807 5,551,408 606,006 788,345 6,945,759
2007 2,157,467 1,002,669 2,402,248 454,767 6,017,151 574,113 790,499 7,381,763
2008 2,208,277 1,043,842 2,416,489 292,585 5,961,193 588,755 982,489 7,532,437
2009 2,340,752 1,094,152 2,561,555 312,654 6,309,113 564,887 1,189,930 8,063,929
2010 2,523,334 1,311,513 2,770,271 430,941 7,036,059 665,184 1,316,670 9,017,913
2011 2,526,694 1,324,240 3,037,863 335,571 7,224,369 996,146 1,287,799 9,508,314
2012 2,668,062 1,425,684 3,031,684 521,270 7,646,701 1,092,227 1,333,075 10,072,003
2013 2,735,203 1,446,028 3,136,622 549,765 7,867,617 1,055,265 1,260,444 10,183,326
2014 2,770,126 1,301,551 3,214,079 753,265 8,039,020 1,049,087 1,203,559 10,291,667
2015 3,068,120 1,418,321 3,268,068 1,010,738 8,765,247 1,130,876 1,287,879 11,184,002
2016 3,508,238 1,554,845 3,470,390 1,065,378 9,598,851 1,188,570 1,444,418 12,231,839
% Share 28.7% 12.7% 28.4% 8.7% 78.5% 9.7% 11.8% 100.0% Table 32: Electricity Consumption (Sales, Utility Use, System Loss) in Visayas Source: Department of Energy Unit: Mwh
Green Energy Technologies - Philippines Market Study - Page 161 of 178
Total System Total Year Residential Commercial Industrial Others Own-Use Sales Loss Consumption
2003 1,775,703 791,411 2,689,610 277,000 5,533,723 100,208 876,998 6,510,930
2004 1,932,626 863,948 2,863,964 358,964 6,019,502 136,743 930,846 7,087,090
2005 1,994,831 889,147 2,931,133 268,893 6,084,005 173,315 985,339 7,242,659
2006 1,992,135 903,959 2,985,180 298,094 6,179,367 177,649 1,056,934 7,413,949
2007 2,088,878 964,494 3,085,523 418,107 6,557,002 279,436 1,053,846 7,890,283
2008 2,200,150 1,026,418 3,092,211 310,723 6,629,502 276,772 1,065,482 7,971,756
2009 2,361,655 1,143,006 2,777,855 416,779 6,699,295 293,218 1,242,765 8,235,278
2010 2,444,569 1,264,818 2,775,995 355,534 6,840,916 282,261 1,279,592 8,402,769
2011 2,608,658 1,324,308 2,902,455 331,557 7,166,977 288,559 1,247,112 8,702,648
2012 2,764,576 1,446,080 2,953,756 335,829 7,500,241 306,426 1,320,204 9,126,871
2013 2,822,954 1,347,851 3,161,354 562,662 7,894,820 354,597 1,097,314 9,346,731
2014 2,894,679 1,356,637 3,275,468 538,476 8,065,259 371,725 1,043,608 9,480,592
2015 3,151,182 1,393,988 3,369,939 538,067 8,453,177 395,268 1,281,422 10,129,866
2016 3,472,984 1,488,432 3,554,098 626,710 9,142,225 651,156 1,552,077 11,345,457
% Share 30.6% 13.1% 31.3% 5.5% 80.6% 5.7% 13.7% 100.0%
Table 33: Electricity Consumption (Sales, Utility Use, System Loss) in Mindanao Source: Department of Energy Unit: Mwh
Green Energy Technologies - Philippines Market Study - Page 162 of 178
System Total Year Residential Commercial Industrial Others Total Sales Own-Use Loss Consumption
2003 15,356,582 11,106,046 15,188,293 1,069,072 42,719,994 3,410,464 6,810,079 52,940,537
2004 15,920,237 11,785,181 15,011,992 1,358,549 44,075,959 4,653,913 7,227,558 55,957,430
2005 16,031,358 12,245,447 15,705,160 1,177,437 45,159,402 4,591,167 6,817,172 56,567,741
2006 15,830,201 12,679,048 15,888,141 1,274,783 45,672,173 4,227,443 6,884,514 56,784,130
2007 16,375,589 13,470,414 16,521,717 1,641,317 48,009,038 3,994,270 7,608,480 59,611,788
2008 16,644,230 14,136,004 17,030,903 1,394,977 49,206,114 3,934,746 7,680,125 60,820,985
2009 17,503,744 14,756,204 17,084,427 1,523,466 50,867,841 3,524,366 7,542,224 61,934,432
2010 18,833,007 16,260,562 18,576,307 1,595,892 55,265,769 4,676,820 7,800,170 67,742,759
2011 18,693,546 16,623,834 19,333,954 1,446,257 56,097,591 5,398,480 7,679,579 69,175,650
2012 19,694,896 17,777,222 20,070,972 1,667,527 59,210,618 5,351,152 8,360,241 72,922,011
2013 20,613,717 18,303,747 20,676,799 1,971,349 61,565,612 5,959,405 7,740,825 75,265,842
2014 20,968,872 18,760,787 21,428,667 2,186,459 63,344,785 6,461,272 7,454,941 77,260,997
2015 22,747,049 20,084,785 22,513,882 2,462,031 67,807,747 7,124,274 7,481,192 82,413,213
2016 25,631,254 21,770,167 24,118,537 2,634,266 74,154,224 8,357,339 8,286,328 90,797,891
% Share 28.2% 24.0% 26.6% 2.9% 81.7% 9.2% 9.1% 100.0%
Table 34: Electricity Consumption (Sales, Utility Use, System Loss) in the Philippines Source: Department of Energy Unit: Mwh
Green Energy Technologies - Philippines Market Study - Page 163 of 178
Total Non- Coincident Year Luzon % AAGR Visayas % AAGR Mindanao % AAGR Peak % AAGR Demand (Max) 2000 5,450 9 749 3 939 5 7,138 8 2001 5,646 4 898 20 953 2 7,497 5 2002 5,823 3 903 1 995 4 7,721 3 2003 6,149 6 995 10 1,131 14 8,275 7 2004 6,323 3 1,025 3 1,177 4 8,525 3 2005 6,443 2 1,037 1 1,149 -2 8,629 1 2006 6,466 0 1,066 3 1,228 7 8,760 2 2007 6,643 3 1,102 3 1,241 1 8,987 3 2008 6,674 1 1,176 7 1,204 -3 9,054 1 2009 6,928 4 1,241 6 1,303 8 9,472 5 2010 7,656 11 1,431 15 1,288 -1 10,375 10 2011 6,946 -9 1,431 0 1,288 0 9,665 -7 2012 7,178 3 1,481 4 1,346 5 10,005 4 2013 8,305 16 1,572 6 1,428 6 11,305 13 2014 8,717 5 1,636 4 1,469 3 11,822 5 2015 8,928 2 1,768 8 1,517 3 12,213 3 2016 9,726 9 1,893 7 1,653 9 13,272 9 AAGR 2007-2016 4.5 6.3 3.3 4.6 2012-2016 8 6.3 5.3 7.4 Table 35: Annual System Peak Demand per Grid Source: Department of Energy Unit: Mwh
Green Energy Technologies - Philippines Market Study - Page 164 of 178
Imported value Imported value Imported value Imported value Imported value Exporters in 2012 in 2013 in 2014 in 2015 in 2016
World 16,770 76,144 150,110 393,208 212,889 China 5,314 46,157 123,878 331,453 154,161 Malaysia 64 6,922 26 11,737 24,461 Taipei, Chinese 2,043 7,286 1,537 19,044 8,861 Japan 3,537 2,972 2,384 6,762 7,498 Singapore 1,001 4,558 11,931 5,599 6,030 Korea, Republic 478 283 4,075 1,609 4,091 of Hong Kong, 3,306 4,836 1,659 3,645 2,619 China United States of 183 179 762 587 1,996 America
Germany 258 748 906 9,146 1,125 Switzerland 7 1 8 11 411 Table 36: Imports of Photosensitive semiconductor devices, incl. photovoltaic cells Source: Trade Map Unit: US Dollar thousand
Green Energy Technologies - Philippines Market Study - Page 165 of 178
Exported value Exported value Exported value Exported value Exported value Importers in 2012 in 2013 in 2014 in 2015 in 2016
World 790,051 1,231,348 1,365,170 1,640,271 1,319,611
Japan 465,317 734,180 1,036,207 1,150,816 768,170
USA 237,631 167,864 211,686 296,319 320,451
Mexico 169 2,551 823 28,023 104,484
France 3,444 27,591 5,014 12,663 52,118
China 3,586 9,226 26,572 54,499 23,432
Netherlands 51,191 99,575 60,329 45,777 15,703
Australia 2,327 3,985 227 1,314 7,475
South Africa 23 302 285 39,027 6,082
Thailand 198 6,052 8 1,951 3,873 Hong Kong, 7,215 2,747 1,534 1,355 2,891 China Table 37: Exports of Photosensitive semiconductor devices, incl. photovoltaic cells Source: Trade Map Unit: US Dollar thousand
Imported value Imported value Imported value Imported value Imported value Exporters in 2012 in 2013 in 2014 in 2015 in 2016
World 6,988 6,498 4,484 8,081 7,505 USA 895 440 224 1,470 1,713 Japan 734 706 423 660 1,368 Singapore 2,282 2,220 2,001 2,390 959 China 862 601 353 511 700 Belgium 8 16 17 10 679 Germany 318 397 230 633 315 France 11 141 141 205 268 Netherlands 94 86 62 95 262 United Kingdom 671 218 213 85 261 Korea, Republic of 115 587 99 82 185 Table 38: Imports of Parts of non-electrical engines and motors, n.e.s.(Wind Turbine Blades) Source: Trade Map Unit: US Dollar thousand
Green Energy Technologies - Philippines Market Study - Page 166 of 178
Exported value Exported value Exported value Exported value Exported value Importers in 2012 in 2013 in 2014 in 2015 in 2016
World 233 13,194 13,002 12,977 5,961 USA 2 8,861 5,548 5,138 2,275 France 0 2 1 7 1,619
Germany 0 2 0 1,148 531
Thailand 0 0 258 514 486
Taipei, Chinese 0 0 554 374 372
Singapore 0 908 3,313 2,531 211
Japan 0 2,423 2,722 2,779 193
Israel 0 0 0 0 113
United Kingdom 0 723 238 101 108
Poland 0 0 9 118 44 Table 39: Exports of Parts of non-electrical engines and motors, n.e.s.(Wind Turbine Blades) Source: Trade Map Unit: US Dollar thousand
Imported value Imported value Imported value Imported value Imported value Exporters in 2012 in 2013 in 2014 in 2015 in 2016
World 375 275 641 974 253
China 258 233 253 157 133
Singapore 0 14 0 0 49 Finland 0 0 0 40 47
Japan 0 2 2 0 18
Israel 0 0 0 0 3 USA 68 27 45 0 3 Australia 0 0 24 0 0
Germany 2 0 0 0 0
Hong Kong, China 0 0 0 133 0
Italy 46 0 0 0 0
Spain 0 0 318 644 0 Table 40: Imports of Generating sets, wind-powered Source: Trade Map Unit: US Dollar thousand
Green Energy Technologies - Philippines Market Study - Page 167 of 178
Exported value Exported value Exported value Exported value Exported value Importers in 2012 in 2013 in 2014 in 2015 in 2016 World 0 1 0 9 0 Japan 0 1 0 9 0 Table 41: Exports of Generating sets, wind-powered Source: Trade Map Unit: US Dollar thousand
Imported value Imported value Imported value Imported value Imported value Exporters in 2012 in 2013 in 2014 in 2015 in 2016
World 15,591 10,982 1,721 21,936 8,855 Japan 1,091 128 28 5,432 2,877 China 362 512 767 4,465 2,516 Spain 0 0 0 84 925
United States of 96 608 101 6,242 617 America
Singapore 1,963 961 658 941 613 United Kingdom 95 17 0 20 339 Italy 12 928 0 81 289 Germany 16 0 0 61 192 India 7 0 0 862 179 Korea, Republic 132 12 17 71 160 of Table 42: Imports of Generating sets (excluding wind-powered and powered by spark-ignition internal combustion piston engine) - Wave/Tidal power converter Source: Trade Map Unit: US Dollar thousand
Green Energy Technologies - Philippines Market Study - Page 168 of 178
Exported value Exported value Exported value Exported value Exported value Importers in 2012 in 2013 in 2014 in 2015 in 2016 World 651 141 301 219 909 Singapore 0 28 92 0 225 Australia 0 9 8 23 124 Hong Kong, 89 22 7 12 103 China Austria 0 27 64 36 95 Korea, Republic 0 36 3 15 84 of Poland 0 0 0 0 58 United States of 0 0 0 0 50 America Latvia 0 0 7 0 30 Russian 0 11 13 89 30 Federation New Zealand 0 0 0 0 25 Table 43: Exports of Generating sets (excluding wind-powered and powered by spark-ignition internal combustion piston engine) - Wave/Tidal power converter Source: Trade Map Unit: US Dollar thousand
Imported value Imported value Imported value Imported value Imported value Exporters in 2012 in 2013 in 2014 in 2015 in 2016
World 19,580 18,501 11,728 54,873 40,369 Taipei, Chinese 255 564 1,724 20,785 8,482 China 6,190 4,110 3,552 7,190 7,329 Japan 5,817 1,891 506 2,133 5,176 Germany 381 336 430 4,586 3,415 Thailand 1,409 887 694 977 3,368 Korea, Republic 1,910 5,151 580 3,718 2,944 of United Arab 55 25 1 58 1,682 Emirates
United States of 475 1,536 1,226 1,434 1,487 America
Malaysia 1,097 998 766 2,090 1,485 Singapore 562 501 793 1,416 1,331 Table 44: Imports of Heat-exchange units (excluding instantaneous heaters, storage water heaters, boilers and equipment) Source: Trade Map Unit: US Dollar thousand
Green Energy Technologies - Philippines Market Study - Page 169 of 178
Exported value Exported value Exported value Exported value Exported value Importers in 2012 in 2013 in 2014 in 2015 in 2016
World 270 391 162,500 243 18
Singapore 0 0 0 6 15
Taipei, Chinese 0 319 144 0 2
Australia 0 0 162,348 0 0
Bangladesh 0 0 0 147 0
Indonesia 1 0 1 1 0
Japan 264 54 0 27 0
Thailand 0 0 0 39 0
United States of 5 18 7 22 0 America
Table 45: Exports of Heat-exchange units (excluding instantaneous heaters, storage water heaters, boilers and equipment) Source: Trade Map Unit: US Dollar thousand
Imported value Imported value Imported value Imported value Imported value Exporters in 2012 in 2013 in 2014 in 2015 in 2016
World 489 7,999 5,781 5,854 18,523
Japan 77 531 540 261 11,105
Germany 144 2,029 1,632 1,424 3,308
India 5 0 1,390 34 1,500
Italy 0 1 0 11 1,271
Switzerland 18 1,338 72 88 406
China 45 1,894 741 3,920 264
Slovenia 0 0 0 0 234
Singapore 119 56 1 15 158
Taipei, Chinese 3 13 6 1 129 United States of 60 28 31 8 81 America Table 46: Imports of Hydraulic turbines, water wheels, and regulators therefor (excluding hydraulic power engines) Source: Trade Map Unit: US Dollar thousand
Green Energy Technologies - Philippines Market Study - Page 170 of 178
Exported value Exported value Exported value Exported value Exported value Importers in 2012 in 2013 in 2014 in 2015 in 2016 World 0 100 43 0 0 France 0 0 10 0 0 Japan 0 0 30 0 0 United States of 0 100 3 0 0 America Table 47: Exports of Hydraulic turbines, water wheels, and regulators therefor (excluding hydraulic power engines) Source: Trade Map Unit: US Dollar thousand
Imported value Imported value Imported value Imported value Imported value Exporters in 2012 in 2013 in 2014 in 2015 in 2016
World 657 1142 1872 4205 1330 France 0 355 0 0 353 Germany 8 92 1188 726 268 Thailand 75 139 131 311 229 Japan 151 96 121 213 117 China 213 306 152 131 88 USA 87 104 81 193 88 India 10 0 0 0 82 Korea, Republic 65 32 35 14 26 of United Kingdom 2 0 0 390 23 Australia 15 3 19 4 15 Table 48: Imports of Furnace burners for pulverised solid fuel or gas, incl. combination burners Source: Trade Map Unit: US Dollar thousand
Green Energy Technologies - Philippines Market Study - Page 171 of 178
Exported value Exported value Exported value Exported value Exported value Importers in 2012 in 2013 in 2014 in 2015 in 2016
World 2 25 52 0 12 Cambodia 0 0 0 0 12 Korea, Republic of 2 0 0 0 0 China 0 8 8 0 0 Japan 0 0 0 0 0 India 0 0 14 0 0 USA 0 18 29 0 0 Table 49: Exports of Furnace burners for pulverised solid fuel or gas, incl. combination burners Source: Trade Map Unit: US Dollar thousand
Green Energy Technologies - Philippines Market Study - Page 172 of 178
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