Renewable energy in the Philippines

Renewable energy accounted for 26.44% of the Philippines' total electrical energy needs in 2013. In terms of gigawatt-hours, renewable energy sources provided the Philippines with 19,903 gigawatt-hours of electrical energy out of a total need of 75,266 gigawatt-hours in 2013.[1]

In the Philippines, five main types of renewable energy are used. These are hydropower, geothermal power, wind power, solar power and biomass power.

In recent years, there has been a drive to increase the Philippines' usage of renewable energy sources. Reasons include the disadvantages of using fossil fuels, such as pollution, accelerated climate change and fluctuating prices.[2][3]

The Philippine Government has responded to the increased demand for renewable energy by enacting certain laws. In 2001, the Philippine Congress enacted the Electric Power Industry Reform act, which promotes the use of local and sustainable energy sources, as opposed to imported fossil fuel sources.[4] In 2006, Congress passed the Biofuels Act, which promotes the use of biomass fuels.[5] In 2008, the Renewable Energy Act was passed, which further encouraged the development and usage of renewable energy in the Philippines.[6] In 2009, the Climate Change act was passed, which provided a legal basis for the tackling of climate change through sustainable development.[7]

The laws enacted by Congress has resulted in a significant degree of cooperation from private companies producing renewable energy, hundreds of whom have contracts with the Philippine Government.

Energy in the Philippines

Current energy needs of the Philippines

The Philippines is a country with a population of more than 101 million people.[8] As a rapidly developing nation, the Philippines has seen high GDP growth in recent years, having an average GDP growth rate of 6.1% from 2011 to 2015.[9] Driving its economic growth are the energy-intensive manufacturing and retailing industries.[10]

Given its large population and rapidly growing economy, the Philippines’ electrical energy needs are significant. According to the Philippine Department of Energy, the Philippines needed 75,266 gigawatt-hours (GWh) of electrical energy in 2013 alone.[1] Of this figure, 27.39% went to powering residential areas, while 24.31% went to commercial establishments and 27.46% to the industrial sector. With regards to geographic area, 72.84% of the electrical energy consumed in 2013 was attributable to Luzon. Meanwhile, 14.75% and 12.41% are attributable to Visayas and Mindanao, respectively.

Percentage of Power Used by Major Islands

  Luzon (72.84%)
  Visayas (14.75%)
  Mindanao (12.41%)

The Philippines’ demand for electrical energy in 2013 represents a 42.17% increase from 2013, where the demand for energy was at 52,941 GWh.[1] As the Philippines’ population and economy continue to grow, it is expected that the country’s demand for power will only increase through time.

Percentage of Power Used by Different Sectors

  Commercial (24.31%)
  Industrial (27.46%)
  Residential (27.39%)
  Other (20.84%)

Fossil fuel usage in the Philippines

The Philippines derives energy primarily from fossil fuel sources. Fossil fuels are nonrenewable energy sources that are made of long hydrocarbon chains.[11] Fossil fuels are combusted to generate heat, which is used to turn liquid water into steam. The steam produced in fossil fuel plants is then used to drive turbines that generate electricity.

Usage data

The Philippines’ current energy mix highly favors fossil fuels like coal, natural gas and oil. Together, these three fossil fuels account for 73.56% of the Philippines’ total electrical energy needs.[1] fossil fuels are preferred by the country primarily because of their low cost.[12]

The Philippines’ most heavily used energy source is coal.[1] Of the country’s 75,266 GWh electrical energy demand in 2013, 32,081 GWh or approximately 42.62% was sourced from coal. This heavy dependence on coal is further manifested by the high number of coal-fired power plants in the country. As of March 2016, there were 32 coal-fired power generation facilities connected to the energy grid.[13][14][15] These facilities are spread throughout the country, although most of them are in Luzon and Visayas. The number of coal-fired power plants in the country is set to increase by 25 by the year 2030 to keep up with the Philippines’ growing energy demands.[16]

Besides coal, the Philippines is also heavily dependent on natural gas. The Philippines derived 18,791 GWh of electrical energy from natural gas in 2013.[1] This corresponded to 24.97% of the Philippines’ electrical energy needs during this period. As of March 2016, there were a total of 13 natural gas generation facilities connected to the energy grid.[13][14][15] 12 of these power plants are located in Luzon, with a single power plant located in Cebu.

The Philippines also derives a significant amount of electrical energy from oil, albeit to a lesser degree compared to coal and natural gas. In 2013, the Philippines sourced 5.97% of its energy from oil-based sources.[1] As of March 2016, there were a total of 212 gas and diesel-powered facilities in the Philippines.[13][14][15] The large number of oil-powered power plants is a result of lower per plant output compared to coal and natural gas. With regards to dispersion, oil-powered power plants can be found across several provinces in Luzon, Visayas, and Mindanao.

Rationale for renewable energy in the Philippines

Disadvantages of fossil fuels

Despite their cost advantage, fossil fuels have several disadvantages as an energy source in the Philippine context.

First of all, the use of fossil fuels produces a significant amount of greenhouse gases.[17] Below are the CO2 emission levels of various fossil fuels:

Fossil Fuel Type[17] Kilograms of CO2 Emitted per Million Btu
Coal 95.35
Gasoline 71.30
Diesel 73.16
Natural Gas 53.07

CO2 has been identified as the greatest contributor to climate change in the present.[18] Given its geographic characteristics, the Philippines is highly vulnerable to the adverse effects of climate change. First, climate change has increased global temperatures, which in turn has resulted in rising sea levels due to melting glacier ice.[19] Rising sea levels are a threat to the Philippines, as it is an archipelago with many cities located near coastal areas. As the coastline recedes due to rising seas, coastal cities in the country will become more vulnerable to flooding. In the long run, rising sea levels may even make these cities uninhabitable. Also, climate change has also been linked to altered weather patterns and extreme weather events.[18]

The continued reliance on fossil fuels is also detrimental to the government’s goal to maintain energy security, which pertains to the country’s ability to readily and affordably procure energy resources.[20] The Philippines does not have a sizeable domestic production of coal and coal, and so it is a net importer of both these fossil fuels. In 2012, the Philippines imported 20 million tons of coal to generate energy, but only domestically supplied 8 million tons.[21] Likewise, the Philippines needed 54 million barrels of oil in 2010, but only domestically produced 33,000 barrels.[22] Given its heavy dependence on imported coal and oil, the Philippines is more vulnerable to power shortages caused by price fluctuations and supply constraints affecting these commodities.[3] This in turn can lead to higher energy prices for consumers, as well as the possibility of energy rationing in certain areas.

Fossil fuels are also an unsuitable long-term energy source because rapidly depleting coal, oil and natural gas stocks. In the succeeding decades, it is predicted that diminishing fossil fuel reserves will result in supply constraints that appreciably drive up coal, oil and natural gas prices. Thus, the costs associated with procuring and using fossil fuel are expected to rise. It is also predicted that nearly all economically recoverable sources of fossil fuels will be fully depleted before the end of the 21st century.[23]

Given the disadvantages of using fossil fuels to meet the Philippines’ energy needs, there have been movements to promote the wider use of renewable energy. The main drivers behind this are the desire to use cleaner and more secure energy sources. This is reflected in a statement released by the Philippine Department of Energy:

“The harnessing and utilization of renewable energy comprises a critical component of the government's strategy to provide energy supply for the country. This is evident in the power sector where increased generation from geothermal and hydro resources has lessened the country's dependency on imported and polluting fuels. In the government's rural electrification efforts, on the other hand, renewable energy sources such as solar, micro-hydro, wind and biomass resources are seeing wide-scale use.”[24]

Renewable energy sources in the Philippines

Despite its heavy reliance on fossil fuels for energy, the Philippines does utilize renewable sources of energy in its current energy mix. In particular, the Philippines utilizes hydropower, geothermal, solar, wind and biomass resources. Together, these renewable energy sources contributed 19,903 GWh of electrical energy in 2013, or 26.44% of the country’s power needs.[1]

Hydropower in the Philippines

Angat Dam, a major hydropower facility in the Philippines

Hydropower is the power derived from the energy of moving water, either flowing or falling.[25] In the Philippines, there are two methods used to harness hydropower. These techniques are called impoundment and run-of-river.

The first method is impoundment, which uses a dam to store fresh water in a reservoir. When electrical power has to be generated, the fresh water is released from the reservoir and allowed to flow through a turbine, thereby spinning it. The spinning motions of the turbine then activates a generator that produces electrical power.[25]

The second method is run-of-river. The run-of-river method does not rely on storage. Rather, it relies on the flow and velocity of running river water (e.g. waterfalls) to generate electricity. Like impoundment, the flow of water is used to spin a turbine, which in turn activates a generator that produces electrical power.[25]

The Philippines’ hydroelectric plants are evenly split between impoundment and run-of-river. Out of 29 hydropower sites in the country, 14 use impoundment while 15 use run-of-river.[13][14][15]

Advantages of hydropower

The main advantage of hydropower is that it is a clean source of energy.[26] Hydropower does not rely on a combustion reaction to drive a generator, and so it does not release any pollutants or greenhouse gases. The cleanliness of hydropower as an energy resource stands in contrast to coal, natural gas and oil.

Another advantage of hydropower is that it can be implemented in almost every region of the Philippines. According to the Department of Energy:

“Potential sites for mini and micro-hydro projects are evenly distributed in all the regions.”[27]

This makes hydropower more suitable for nationwide implementation than other renewable energy sources, such as solar and wind.

Hydropower also helps lesson the Philippines’ dependency on foreign fuel imports.[28] Because water is a naturally recurring resource, the Philippines can lessen its imports of coal, oil and natural gas from abroad if it shifts more of its power production to hydropower. In relation to this, the generation costs of hydropower facilities are expected to be constant, the resource it uses is not subject to price fluctuations and supply shortages.

Disadvantages of hydropower

Hydropower is not without its disadvantages. By far, the biggest disadvantage of hydropower is the high amount of capital required to construct needed facilities. According to the Department of Energy:

“The capital-intensive nature, long gestation period (average of seven years) and accompanying issues of social acceptability of large hydropower projects remain to be the sector's biggest challenges. On the other hand, micro-hydro development for off-grid electrification is hindered by high upfront costs and the need for government intervention and subsidy.”[27]

Even small hydropower facilities require a substantial amount of investment. A small facility that is capable of producing 5 KW of power requires an investment of at least US$11,000 (Php506,000).[27] Meanwhile, a larger facility capable of producing 100 KW needs US$64,500 (Php2,967,000). This stands in contrast with small fossil fuel facilities, which only cost a fraction of this investment.

Although clean, a hydropower facility can disrupt the habitat of wildlife.[28] For instance, hydroelectric dams can disrupt the free passage of fish from one side of a body of water to another.

Hydropower can also cause flooding in upstream areas, thereby damaging or destroying the homes and crops of local residents.[27] This is especially true during the rainy season in the Philippines, where dams are forced to release water or risk overflowing. Oftentimes, releasing water during these times further harms residents and farmers already severely impacted by the inclement weather.[29]

Any threat to either the dam facilities or the river-systems, such as leaks or drying due to climate changes greatly hinders the productivity of the hydroelectric power plants.

Major hydropower sites in the Philippines

Facility Name[13][14][15] Type Installed Capacity (MW) Location Owner Year Commissioned
San Roque Dam 411.0 Pangasinan San Roque Power Corporation 2003
HEDCOR Run-of-River 33.8 Benguet HEDCOR 1993
Kalayaan PSPP Dam 739.2 Laguna CBK Power Company Ltd. 1998/2004
Magat Run-of-River 360.0 Isabela Aboitiz Power 1983
Caliraya Dam 35.0 Laguna CBK Power Company Ltd. 1942/1947/1950
Botocan Run-of-River 22.8 Laguna CBK Power Company Ltd. 1967/1986
Angat Dam 246.0 Bulacan PSALM 1967/1986
Pantanangan-Misiway Dam 132.0 Nueva Ecija First Gen Corp. 1977/1981
Ambuklao Dam 105.0 Benguet Aboitiz Power 1957
Binga Dam 132.0 Benguet Aboitiz Power 1960
Bakun Run-of-River 70.0 Ilocos Sur Luzon Hydro Corp. 2000/2001
Casecnan Dam 165.0 Nueva Ecija CE Casecnan Water & Energy Co. 2002
Sabangan Run-of-River 13.2 Mt. Province HEDCOR 2015
NIA-Baligtan Run-of-River 6.0 Isabela NIA 1987
JANOPOL Run-of-River 5.2 Bohol BOHECO I 1992
AGUS 1 Dam 80.0 Lanao del Sur PSALM 1992
AGUS 2 Dam 180.0 Lanao del Sur PSALM 1992
AGUS 4 Dam 55.0 Lanao del Norte PSALM 1985
AGUS 5 Dam 200.0 Lanao del Norte PSALM 1985
AGUS 6 Dam 54.0 Lanao del Norte PSALM 1953/1971
AGUS 7 Dam 255.0 Lanao del Norte PSALM 1983
PULANGI 4 Run-of-River 232.0 Bukidnon PSALM 1985/1986
Sibulan HEP Run-of-River 42.6 Davao del Sur HEDCOR 2010
Agusan Run-of-River 1.6 Bukidnon FG Bukidnon Power Corp. 1957
Bubunawan Run-of-River 7.0 Bukidnon BPC Inc. 2001
Cabulig HEP Run-of-River 9.2 Misamis Oriental Mindanao Energy Systems 2012
Talomo HEP Run-of-River 4.5 Davao del Sur HEDCOR 1998
Tudaya 1 Run-of-River 6.6 Davao del Sur HEDCOR 2014
Tudaya 2 Run-of-River 7.0 Davao del Sur HEDCOR 2014

Hydropower output of the Philippines

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Hydropower Output (GWh)[1] 8,593 8,387 9,939 8,563 9,834 9,788 7,803 9,698 10,252 10,019
Percentage Change (2.40%) 18.50% (13.84%) 14.84% (0.47%) (20.28%) 24.29% 5.71% (2,27%)

Geothermal power in the Philippines

Palinpion geothermal facility

Geothermal energy is derived from the heat found beneath the earth’s surface.[30] In general, geothermal energy is derived from the pockets of heated water and rock that lie beneath the earth’s surface.

In temperate countries, geothermal energy is used directly to provide heating for homes.[31] However, such an application is not used in the Philippines. For the most part, geothermal energy is used in the Philippines to generate electrical energy.

There are three main ways of generating electricity from geothermal energy: dry steam, flash steam and binary cycle.[32] In the Philippines, only the flash steam and binary cycle methods are used.

Flash steam geothermal plants extract water with a temperature greater than 182 °C from the ground using pipes.[32] As the hot water moves up the pipes, some of it turns into steam. The steam is then isolated from the extracted water and is used to run a turbine that produces electricity. The remaining liquid water is pumped back into the ground.

The binary process on the other hand extracts water with lower temperatures.[32] The water extracted is usually 107 °C to 182 °C. The water extracted under this process is used to boil a working fluid with a lower boiling point than water. The heated working fluid is then used to drive an electrical turbine to produce power. The extracted water pumped back into the ground at the end of this process.

Almost all of the Philippines’ 11 geothermal power plants use the flash steam method. The only exception is the MAKBAN plant, which is a flash steam-binary process hybrid.

Advantages of geothermal power

The principal benefit of geothermal energy is that it is a clean energy source.[30] Geothermal plants do not burn any fossil fuels to operate, and so they do not release greenhouse gases into the atmosphere. Geothermal energy is also sustainable because it relies entirely entirely on the heat emanating from the core of the earth, a resource that will continue to exist for billions of years (National Geographic).[33]

Another advantage of geothermal energy is that it can be harvested all year round in almost any location. This means that geothermal plants can be opened in areas with low wind incidence, such as Mindanao, and areas that frequently experience rainy weather, such as Batanes. Thus, geothermal plants can be used to serve areas that cannot be serviced by other renewable energy sources.

Geothermal plants are also very space efficient.[33] To produce 1 GW of energy, a geothermal plant only needs 1,046 sq. km of space. For comparison, a wind farm needs 3,458 sq. km, a photovoltaic solar farm needs needs 8,384 sq. km, and a coal-fired plant needs 9,433 sq. km.

Disadvantages of geothermal power

The main disadvantage to this type of energy is that the process of extracting geothermal energy sometimes releases toxic substances from beneath the earth’s surface. Such substances include mercury, hydrogen sulfide, arsenic and selenium.[33] There have been instances of human poisoning that have been linked back to geothermal plants in the Philippines. One of the most known events happened at a geothermal plant in Biliran, where eight plant workers were hospitalized because of hydrogen sulfide poisoning.[34]

Major geothermal sites in the Philippines

Facility Name[13][14][15] Type Installed Capacity (MW) Location Owner Year Commissioned
MAKBAN Flash/Binary 442.8 Laguna AP Renewable Inc. 1979
BACMAN Flash 130.0 Sorsogon Bac-Man Geothermal Inc. 1993
Tiwi Flash 234.0 Albay AP Renewable Inc. No date
MANITO-Lowland Flash 1.5 Albay Bac-Man Geothermal Inc. No date
MAIBARARA Flash 20.0 Batangas Maibarara Geothermal Inc. 2014
Palinpinon GPP Flash 192.5 Negros Oriental Green Core Energy 1983
Leyte Flash 112.5 Leyte Green Core Energy 1983
Unified Leyte Flash 610.2 Leyte Energy Development Corp. 1996/1997
Nasulo GPP Flash 50.0 Negros Occidental Energy Development Corp. 2014
Mt. Apo Flash 103.0 North Cotabato Energy Development Corp. 1996

Geothermal energy output

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Geothermal Power Output (GWh)[1] 10,282 9,902 10,465 10,215 10,723 10,324 9,929 9,942 10,250 9,605
Percentage Change (3.70%) 5.69% 2.39% 4.97% (3.72%) (3.83%) (0.13%) 3.10% (6.29%)

Solar power in the Philippines

Photovoltaic solar cell

Solar energy pertains to the energy emitted by the sun that can be used for heating or electrical energy.[35] In order to utilize solar energy, it must first be captured through the use of specialized equipment.

There are three main methods of capturing solar energy: passive systems, active systems and photovoltaic cells.[35] In the Philippines’ context, only photovoltaic cells are used on an industrial level to produce energy. Active and passive systems are commonly found in residential areas to aid in water heating.

Photovoltaic cells transform solar energy into electrical energy through the photoelectric effect. Photovoltaic cells are made of materials that emit electrons when struck by light. When the emitted electrons are captured, an electric current is produced.[36]

Active system for water heating

Although located in a region that receives high amounts of sunlight, the Philippines does not utilize solar energy on the same scale as it does hydropower and geothermal power. However, the Philippines has opened an increasing number of solar farms in recent years. In 2015 alone, three large solar farms were opened within the country.

Advantages of solar power

The main advantage of solar energy is that it is a clean resource.[37] The harnessing of solar energy requires no inputs besides the photovoltaic cell, and it produces no waste materials or byproducts.

Photovoltaic solar cells are also advantageous because they do not require constant maintenance after installation.[37] Unlike geothermal and hydroelectric plants, solar farms do not have any moving machinery that can break down and require almost no personnel to operate.

Solar energy is also advantageous because it takes advantage of the Philippines’ position near the equator. The Philippines receives 5.1 KW per sq.m per day on average. Given the high amount of incident sunlight received by the country, a significant amount of energy can be derived by solar farms operating in highly sunny areas.

Solar energy also requires less infrastructure than other renewable energy sources. Solar energy systems are more easily installed in remote areas, especially rural areas, where it can be expensive to extend to power grid.

Disadvantages of solar power

Solar energy powered lamps at Luneta Park

However, there are disadvantages to using solar energy as well. First of all, solar energy cannot be used to generate solar energy all day and all year round.[37] Solar power cannot be captured during the night when the sun is gone. Also, solar energy cannot be captured under certain weather conditions, such as during rainy and cloudy weather. The latter is of particular concern to the Philippines, as the country has an average of 144 rainy days per year.[38]

Another disadvantage to tapping into solar energy is the relatively low yield of photovoltaic cells. On average, photovoltaic cells are only able to capture around 20% of incident sunlight.[37] This means that only that 1.02 KW of the solar energy received by the Philippines is successfully transformed into electrical energy.

Major solar power sites in the Philippines

Facility Name[13][14][15] Type Installed Capacity (MW) Location Owner Year Commissioned
Majestic Photovoltaic 41.3 Cavite Majestic Power Corp. 2015
Pampanga Solar Photovoltaic 10.0 Pampanga Raslag Corp. 2015
Burgos Solar Photovoltaic 4.0 Ilocos Norte Solar Philippines 2015
CEPALCO Solar PV Photovoltaic 1.0 Cagayan de Oro CEPALCO 2004

Solar, wind, and biomass energy output

2005 2006 2007 2008 2009 2010 2011 2012 2013
Solar, wind, and biomass output (GWh)[1] 19 55 59 63 79 90 205 259 279
Percentage change 189.47% 7.27% 6.78% 25.40% 13.92% 127.78% 26.34% 7.72%

Wind power in the Philippines

Pililla Wind Farm

Wind energy produces electrical power using the kinetic energy of moving air.[39]

In order to use the wind to create power, the kinetic energy of the wind must first be captured using a wind turbine. Wind turbines work by transforming kinetic energy into mechanical power.[39] The mechanical power obtained is then used to power a generator, which creates electrical power.

In general, wind turbines can be placed in any area that receives sufficient wind flow. At the very least, an area must have a minimum average wind flow between 11 km/h to 16 km/h to generate useable electrical power.[40] Wind turbines placed at sea are known as offshore wind turbines. Wind turbines placed on land are known as on-shore wind turbines.

All wind power sites in the Philippines are on-shore facilities. Besides generating power, wind farms in the Philippines, such as those in Ilocos Norte, are locally known as tourist sites.[41][42]

Advantages of wind power

Wind energy is a clean source of electricity. Unlike nonrenewable sources of energy like coal, oil and natural gas, wind energy does not produce any harmful chemical byproducts that are harmful to people and the environment.

Bangui Wind Farm

Another benefit of wind energy in the Philippine setting is tourism. Thousands of visitors have visited the Bangui Wind Farm ever since its opening in 2005. During the Lenten break in 2016, over 61,000 tourists came to see the wind turbines at Bangui.[41] A similar trend is seen in wind farms outside Ilocos, as tourists are also known to flock at the Pililia Wind Farm in Rizal.[42]

Disadvantages of wind power

The main disadvantage to using wind energy is the intermittent nature of wind. Even in the most ideal locations, wind does not always blow when needed.[39] This issue is further complicated by the fact that wind energy cannot be stored, unlike solar energy. These issues make wind energy an inconsistent source of energy, which is highly dependent on the weather and other external conditions.

Another disadvantage to using wind turbines is noise pollution. For example, the wind turbines at Bangui have been described to emit a “low, swooshing noise” by some people.[43] One top of this, wind turbines also pose a minor threat to wildlife, as birds and bats have been known to fly into the Bangui turbines.[43]

Major wind power sites in the Philippines

Facility Name[13][14][15] Type Installed Capacity (MW) Location Owner Year Commissioned
Bangui Wind Farm Power Phase 1 and 2 On-Shore 33.0 Ilocos Norte North Wind Power Development Corp. 2005
Bangui Wind Farm Power Phase 3 On-Shore 18.9 Ilocos Norte North Wind Power Development Corp. 2014
Burgos Wind On-Shore 150.0 Ilocos Norte EDC 2014
Carispisan Wind On-Shore 81.0 Ilocos Norte North UPC 2014
Pililia Wind Farm On-Shore 54.0 Rizal Alternegy Philippine Holdings Corp. 2015
TAREC On-Shore 54.0 Guimaras TAREC 2014
NABAS Wind Phase 1 On-Shore 36.0 Aklan PWEI 2015

Biomass power in the Philippines

Bagasse, a kind of biomass fuel

Biomass energy refers to energy derived from plant and animal sources.[44] Although similar, biomass and fossil fuels are distinct from one another. Fossil fuels take millions of years to form, and results in a net emission of carbon when combusted because it was out of the earth’s carbon cycle for so long. Meanwhile, biomass is easily renewable, and does not result in a net addition to global carbon levels because living organisms take in carbon over their lifespans and merely return the same carbon when used as fuel.

Being an agricultural country, the Philippines is rich in sources of biomass energy. At present, bagasse, rice husks and coconut husks are used in the country to generate power.[45] These agricultural byproducts generate energy the same way fossil fuels do. They are combusted to boil water, so that the resulting steam can be used to drive generators that produce electricity.

Rice husks

To a lesser extent, the Philippines also uses landfill gas as a biomass energy source. Landfills produce gases like methane due to bacteria-induced decomposition. The gases derived from such operations can be used in a combustion reaction to generate electricity.

Advantages of biomass power

The main advantage to biomass energy is that biomass resources are abundant in the Philippines. Being an agricultural country, the Philippines produces a substantial amount of agricultural waste like bagasse and plant husks that can be used as fuel.[45] According to the Department of Energy, Regions III, IV, VI and VII are abundant in bagasse. Coconut husks are abundant in Regions IV, VIII, IX and XI. Meanwhile, Regions II, III, IV and VI are rich in rice hulls. Because of the abundance of these materials in the country, biomass fuel sources are a cheaper source of energy than imported fossil fuels.

Disadvantages of biomass power

However, the primary disadvantage to biomass energy is that their availability is tied to the plant and animal sources they are derived from.[46] Thus, if the Philippines experiences an event, such as a drought, that cuts rice, sugar or coconut production, then the production of biomass energy can be expected to fall.

Also, biomass energy relies on a combustion process to generate power. Although the combustion of biomass does not result in a net carbon gain, it still releases a great deal of smoke and soot.[46] This can prove harmful to people and animals located close to biomass plants.

Major biomass power sites in the Philippines

Facility Name[13][14][15] Type Installed Capacity (MW) Location Owner Year Commissioned
Green Future Bagasse 19.8 Isabela Green Future Innovation Inc. 2014
5JC Power Rice Husk 12.0 Nueva Ecija I Power Corp. 2015
Montalban LFG Landfill Gas 9.3 Rizal Montalban Methane Power Corp. 2009
Laguna LFG Landfill Gas 4.2 Laguna Bacavalley Energy Inc. 2011
Lucky PPH Bagasse 4.0 Isabela Lucky PPH International Inc. 2008
Pangea Landfill Gas 1.2 Metro Manila Pangea Green Energy Phil Inc. 2013

Renewable energy statistics summary

Hydropower [1](GWh) Geothermal (GWh) Solar, wind, and biomass (GWh) Total renewable energy produced (GWh) Total energy produced (GWh) Renewable energy as a percentage of total energy production
2004 8,593 10,282 - 18,875 55,957 33.73%
2005 8,387 9,902 19 18,308 56,568 32.36%
2006 9,939 10,465 55 20,459 56,784 36.03%
2007 8,563 10,215 59 18,836 59,612 31.60%
2008 9,834 10,723 63 20,620 60,821 33.90%
2009 9,834 10,324 79 20,237 61,934 32.68%
2010 9,788 9,929 90 19,807 67,743 29.24%
2011 7,803 9,942 205 17,950 69,176 25.95%
2012 10,252 10,250 259 20,761 72,922 28.47%
2013 10,019 9,605 279 19,903 75,266 26.44%

Involvement of the government

The Philippine government has passed four laws that seek to improve the state of renewable energy in the Philippines: the Electric Power Industry Reform Act of 2001 (RA 9136), the Biofuel Act of 2006 (RA 9367), the Renewable Energy Act of 2008 (RA 9513), and the Climate Change Act of 2009 (RA 9729). The Philippine Department of Energy (DOE) was lead agency mandated to implement the provisions of the former three laws.

Republic Act 9136

Republic Act 9136, or the Electric Power Industry Reform Act of 2001 (EPIRA), declared that “it is the policy of the state to promote the utilization of indigenous and new and renewable energy resources in power generation in order to reduce dependence on imported energy.” It stated that the DOE shall “encourage private sector investments in the electricity sector and promote development of Renewable energy Sources including small-scale renewable energy generating sources”[4]

Moreover, for government efforts of missionary electrification, EPIRA promoted the utilization of renewable energy resources whenever feasible, providing power generation and its associated power delivery systems in areas that are not connected to the grid. This act also set criteria for determining qualified third parties that may participate in providing electricity to remote and unviable areas, giving preference to parties that would utilize least-cost renewable energy resources.[4]

Republic Act 9367

Republic Act 9367, also known as the Biofuels Act of 2006, declared that “it is the policy of the State to reduce dependence on imported fuels with due regard to the public health, the environment, and natural ecosystems by mandating the use of biofuels,” wherein one aim is the availability of alternative and renewable clean energy without any detriment to the ecosystem and food reserves of the country.

It encourages investments in biofuels with the following incentives: specific tax on local or imported biofuels component. The sale of raw material used in the production of biofuels shall be exempt from the value added tax. Moreover, government financial institutions, such as the Development Bank of the Philippines, Land Bank of the Philippines, Quedancor and other government institutions providing financial services shall extend financing to Filipino citizens or entities that shall engage in activities involving production biofuel feed-stock as certified by the DOE.

Finally, the law saw the creation of the National Biofuel Board (NBB), which would monitor the implementation of, and evaluate for further expansion, the National Biofuel Program (NBP) prepared by the DOE.[5]

Republic Act 9513

Republic Act 9513, also called the Renewable Energy Act of 2008 pushed for the wider use of renewable energy in the Philippines. In particular, the law called for the state to:

(a) Accelerate the exploration and development of renewable energy (RE) resources such as, but not limited to, biomass, solar, wind, hydro, geothermal and ocean energy sources, (b) Increase the utilization of renewable energy by institutionalizing the development of national and local capabilities in the use of RE systems, and promoting its efficient and cost-effective commercial application by providing fiscal and non-fiscal incentives; (c) Encourage RE resources as tools to effectively prevent or reduce harmful emissions for the protection of health and the environment; and (d) Establish the necessary infrastructure and mechanism to carry out the mandates specified in this Act and other existing laws."[6]

On-grid renewable energy development

Under Section 6 of RA 9513, A Renewable Portfolio Standard (RPS) was made to set a minimum percentage of generation from eligible renewable energy resources and determine to which sector RPS shall be imposed on a per grid basis.

Under Section 7 of RA 9513, A Feed-In Tariff System was implemented for electricity produced from wind, solar, ocean, run-of-river hydropower and biomass. FiT encourages RE capacity by guaranteeing prices in the form of long-term contracts to RE producers, typically based on the cost of generation of each technology.[47] Under the FiT System, qualified developers of emerging RE sources are offered on a fixed rate per kilowatt-hour (kWh) of their exported electricity to the distribution or transmission network. This scheme excludes the energy utilized from RE plants eligible for own use. FiT is one of the policy mechanisms eyed by the DOE as it aims to maintain the share of RE to at least 30% in the country’s power mix. The DOE highlights that FIT subscriptions for RE resources has significantly increased to 806.82 MW from 646.65 MW installations since the start of 2016.

Under Section 10 of RA 9513, Net-metering for Renewable energy was promoted by having the distribution utilities enter into net-metering agreements with qualified end-users of RE systems.

Off-grid renewable energy development

Under Section 12 of RA 9513, NPC-SPUG, in charge of providing missionary electrification, was ordered to source a minimum percentage of its total annual generation from available RE resources in the area concerned.

Incentives

Under Section 15 of RA 9513, developers of renewable energy facilities duly certified by the DOE are entitled to many incentives, particularly an income tax holiday for the first seven (7) years of its commercial operations, duty-free importation of renewable energy machinery, equipment and materials within the first ten (10) years upon the issuance of certification, under certain provisions, special realty tax rates on renewable energy equipment and machinery, net operating loss carry-over, zero percent Value-Added Tax (VAT) Rate for the sale of fuel or power generated from renewable sources of energy, and Tax Credit on domestic capital equipment and services.

Under Section 21 of RA 9513, the renewable energy sector was declared a priority investment sector that will regularly form part of the country’s Investment Priority Plan. DOE-accredited manufacturers, fabricators and suppliers of locally-produced renewable energy equipment and components are entitled to tax and Duty-Free Importation of materials, tax credit on domestic capital materials, Income Tax Holiday and exemption for seven (7) years, and zero-rated VAT transactions.

Under Section 22 of RA 9513, DOE-certified individuals and entities (i.e. farmers) engaged in the plantation of crops and trees used as biomass resources are entitled to duty-free importation and be exempted from Value-Added Tax (VAT) on all types of agricultural inputs, equipment and machinery for a period of ten (10) years after the effectiveness of the Act.

Provisions

Under Chapter 8 of RA 9513, the National Renewable energy Board (NREB) was created to evaluate and recommend the mandated RFS and minimum RE generation capacities for off-grid areas, to monitor and recommend specific actions for implementing the National Renewable energy Program (NREP), and other such functions to attain the objectives of the Act, and the Renewable energy Management Bureau was created for the purpose of implementing the provisions in the Act. The Renewable energy Trust Fund, overseen by the NREB was also established for financing the enhancement of development and greater utilization of renewable energy.

Republic Act 9729

Republic Act 9729, also known as the Climate Change Act of 2009, stated that "it is the policy of the state to afford full protection and the advancement of the right of the people to a healthful ecology in accord with the rhythm and harmony of nature. It is to make it a policy of the State to incorporate a gender-sensitive, pro-children and pro-poor perspective in all climate change and renewable energy efforts, plans and programs." The state aims "to strengthen, integrate, consolidate and institutionalize government initiatives to achieve coordination in the implementation of plans and programs to address climate change in the context of sustainable development."[7]

Issues with implementation

Despite the enactment of the Renewable Energy Act in 2008, new investments in renewable energy have reportedly been slow on the uptake. The FiT were approved only in 2012, and thus far, there have been two investments in solar facilities that are expected to be operational in 2016. The four-year span in the approval of the FiT delayed a potential investment of $2.5 billion. Compared with the original FiT tariffs filed by the National Renewable energy Board (NREB) before the energy Regulatory Commission in April 2011, the approved rates in July 2012 are much lower. In 2015, the regulators are looking at even lower FiT tariff levels for the next batch of FiT applicants.[47]

Feed-in tariff program statistics

FIT Monitoring Board summary[48]

Resource For Nomination / Conversion With Certificate of Confirmation of Commerciality With Certificate of Endorsement to ERC
No. of Projects Capacity (MW) No. of Projects Capacity (MW) No. of Projects Capacity (MW)
Hydro - - 66 610.93 4 26.60
Wind 7 1,023.55 5 431.00 6 393.90
Solar 18 681.30 30 892.54 6 131.90
Biomass - - 4 24.37 11 94.25
TOTAL 25 1704.85 105 1,958.84 27 646.65

FiT degression[47]

RE Technology Proposed FiT ($/kWh)* Approved FiT ($/kwh)* Degression Rate
Solar 0.407 0.220 6% after 1 year from effectivity of FiT
Wind 0.235 0.193 0.5% after 2 years from effectivity of FiT
Biomass 0.159 0.150 0.5% after 2 years from effectivity of FiT
Run-of-River Hydro 0.139 0.134 0.5% after 2 years from effectivity of FiT
*Based on USD 1.00 : PHP 44.00

Involvement of the private sector

Republic Act 9531, or the Renewable Energy Act of 2008 encourages the involvement of the private sector in renewable energy, given that there is an increasing shift towards clean and sustainable energy.[49] The Renewable Energy Act of 2008 seeks to attract members of the private sector to contribute to the development of renewable energy in the country by offering fiscal and non-fiscal incentives.

Fiscal incentives include tax breaks, as well as funding assistance from both the government and third parties. A number of international organizations have expressed willingness to aid Philippine businesses in developing local renewable energy infrastructure. Such organizations include: German Technical Cooperation (GTZ), United States Agency for International Development (USAID), Asian Development Bank (ADB), United Nations Development Programme (UNDP), and Japan International Cooperation Agency (JICA).[50]

Barriers to private sector participation

However, there are factors that makes their involvement challenging or that may hinder potential actors from entering the industry in the first place. Such barriers include high transaction costs, social engineering costs, need for political connections, lack of local technology/expertise, and government price ceilings on energy prices derived from renewable energy sources.

High transaction costs

Many private sector businesses are facing high transaction costs due to bureaucratic inefficiency and procedural delays. For instance, many private sector players face troubles due delays in the issuance of standard documents, which are caused by intra-governmental conflict. Such delays are problematic on the side of the private sector actors, as they face increasing transaction and labor costs as time draws on.

An itemized partial list of required permits, licenses and certificates for RE project application:[51]
Required Documents issued by the National Government Required Documents issued by the Local Government Units
  1. SEC Registration
  2. DOE Certificate/Endorsement
  3. DOE Accreditation
  4. BOI Registration
  5. CSR Approval — Anti-poverty Commission
  6. DENR EPC Certificate
  7. DENR Environmental Certificate (ECC)
  8. DENR Permit to Operate
  9. Development Permit (endorsed to LGU)
  10. Transfer Certificate of Title (LRB, HLURB)
  11. BIR Certified Tax Declaration
  12. ERC Certificate of Compliance
  13. NTC Permit to Purchase
  14. NTC License to operate
  15. ERC Compliance to Grid Code
  16. ERC Compliance to Distribution Code
  17. WESM Registration
  18. Right of Way permit
  19. Power Purchase Agreements
  20. Certificate of Registration as Importer
  1. LGU Endorsements (Governor, Mayor, Councils)
  2. Realty Tax
  3. Barangay Clearance to operate
  4. Business and Operations Tax
  5. Building permit
  6. Real Estate Tax Receipt
  7. Sanitary Permit
  8. Barangay Clearance for Construction
  9. Right of Way permits
  10. Water Rights

Social engineering costs

In addition to the previously mentioned transition costs, private sector players also face social engineering costs. This type of cost involves certain indigenous groups and non-governmental organizations in which they engage in “informal forms of ‘harassment’ such as public information threats, mobilization of protests, and the ‘slander of corporate reputation’ in exchange for financial concessions.” These can reach up to approximately US$20 million which are distributed among the different types of government officials.[51]

Lack of local technology

Many renewable energy sources, such as wind power and solar power, require specialized equipment that are produced in the Philippines. Because of this, many private sector players involved in renewable energy must import needed equipment and tools from other countries before they can begin operations in the country. Since doing this can prove to be prohibitively expensive, many private firms choose not to get into renewable energy in the Philippines.[51]

Price ceilings on electricity rates

Due to the high costs associated with investing in renewable energy infrastructure, private sector firms try to recoup their investment through higher rates. However, certain government agencies, such as the energy Regulatory Commission (ERC) impose lower generation rates on power producers in order to safeguard consumer interests. Because imposed rates are significantly lower than the proposed rates submitted by renewable energy producers, many private firms are reluctant to enter the renewable energy sector, because this could mean a long payback period and low profits, if any at all.[49]

Renewable energy Technology[49] Issued FIT rate (per kWh) Proposed rate (per kWh)
Solar Php 9.68 Php 17.95
Wind Php 8.53 Php 10.37
Biomass Php 6.63 Php 7.00
Hydropower Php 5.90 Php 6.15

Public-private partnership

Public-private partnerships are a kind of contractual agreement between a government entity and private sector player, wherein the private sector player provides a public asset or service with the government's support.[52] In public-private partnerships, the government benefits by tapping into the expertise of the private actor, who can provide assets and services to the public more efficiently. The government also benefits by offloading some investment cost onto the private partner. In exchange for taking on the risk of providing a public asset or service, the private partner gets to benefit economically from the public-private partnership.

As of June 2015, the Department of Energy (DOE) has awarded 646 service contracts to private sector players under the Renewable Energy Law with installed capacity of 2,760.52 MW.[53]

Resources Awarded Projects Installed Capacity Potential Capacity
Geothermal 42 1,896.19 750.00
Hydro 407 136.73 7,884.54
Wind 51 426.90 1,168.00
Solar 93 108.90 2,206.51
Biomass 45 191.80 357.00
Ocean energy 8 - 31.00
TOTAL 646 2,760.52 12,397.05

The DOE posts updates of its Private Sector Initiated Power Projects—both committed and indicative, of all types of power sources, and of all regions—every month in its official website.

Listed below are the current committed private sector initiated power projects that involve renewable energy:

Island Group Resource Project Name Project Proponent
Luzon[54] Hydropower Kapangan Cordillera Hydro Electric Power Corporation
Bulanao DPJ Engineers and Consultants
Prismc PNOC-Renewables Corporation
Magat A Isabela Electric Cooperative, Inc.
Magat B Isabela Electric Cooperative, Inc.
Tubao Tubao Mini-Hydro Electric Corporation
Catuiran* Sta. Clara Power Corp.
Inabasan* Ormin Power, Inc.
Solar San Rafael Solar Power Plant SPARC Solar Powered AgriRural Communities Corporation
Morong Solar Power Plant SPARC Solar Powered AgriRural Communities Corporation
Cabanatuan Solar Power Project First Cabanatuan Renewable Ventures, Inc.
Palauig Solar Power Plant SPARC Solar Powered AgriRural Communities Corporation
Currimao Solar Photovoltaic Power Project Mirae Asia energy Corporation
Macabud Solar Photovoltaic Power Project ATN Philippines Solar energy Group, Inc.
Sta. Rita Solar Power Project Jobin-Sqm Inc.
YH Green YH Green
Tarlac Solar Power Project PetroSolar Corporation
Calatagan Solar Power Project Phase I Solar Philippines Calatagan Corporation
Geothermal Bacman 3 (Tanawon) Geothermal Project energy Development Corporation
Maibarara 2 Geothermal Project Maibarara Geothermal Inc.
Biomass 2 MW ACNPC WTE Biomass Power Plant Project Asian Carbon Neutral Power Corporation
12 MW Biomass Power Plant Project Green Innovations for Tomorrow Corporation
5 MW Bicol Biomass energy Corporation Bicol Biomass energy Corporation
8.8 MW Biogas Power Plant Project AseaGas Corporation
24 MW SJCiPower Rice Husk-Fired Biomass power Plant Project (Phase 1 - 12MW Phase 2 - 12 MW) San Jose City I Power Corporation
70 kW Biomass Gasification Power Plant Project* PowerSource Philippines, Inc.
Visayas[55] Geothermal Biliran Geothermal Plant Project Biliran Geothermal Incorporated
Hydropower Villasiga HEP Sunwest Water & Electric Co., Inc.
Igbulo (Bais) Hydroelectric Power Project Century Peak energy Corporation
Cantakoy Quadriver energy Corp.
Amlan HEPP Natural Power Sources Integration, Inc.
Solar Miag-ao Solar Power Project COSMO Solar energy, Inc.
La Carlota Solar Power Project Phase A (SACASOL II-A) San Carlos Solar energy Inc.
Cadiz Solar Power Project Phil.Power Exploration & Development Corporation
Wind Nabas Wind Power Project Phase I - 34 Phase II-16 PetroWind energy Corporation
Biomass 12 MW Multi-Feedstock Biomass Power Plant Project Megawatt Clean energy, Inc.
2.5 MW Rice Husk-Fired Biomass Power Plant Project Megawatt Clean energy, Inc.
Mindanao[56] Hydropower Lake Mainit Agusan Power Corporation
Puyo Hydroelectric Power Project First Gen Mindanao Hydropower Corp.
Asiga Asiga Green energy Corp.
Manolo Fortich I Hedcor Bukidnon, Inc.
Manolo Fortich 2 Hedcor Bukidnon, Inc.
Solar Kibawe Solar Power Project Asiga Green energy Corp.
Digos Solar Power Project Phase I Enfinity Philippines Renewable Resources, Inc.
Digos Solar Power Project Phase II Enfinity Philippines Renewable Resources, Inc.
Biomass 3 MW Biomass Cogeneration Facility Philippine Trade Center, Inc.
15 MW LPC Biomass Power Plant Project Lamsan Power Corporation
3.5 MW Biomass Cogeneration System Green Earth Enersource Corporation
10MW Malay-balay Bioenergy Corporation Multi Feedstock Generating Facility Malaybalay Bio-energy Corporation
23.5 MW EPC Woody Biomass Power Plant Project Eastern Petroleum Corporation
12 MW Napier Grass-Fired Biomass Power Plant Project Manolo Fortich Biomass energy Corporation

*—off grid project

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  2. ↑ Worl, Justin. "See How Climate Change Affect the Philippines". TIME.com. Retrieved 2016-04-08.
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  55. ↑ "2016 PRIVATE SECTOR INITIATED POWER PROJECTS IN VISAYAS (COMMITTED)" (PDF).
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