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The Philippine government is scaling up target on renewable energy (RE) installations to 52,826 megawatts within 20-year development span, so it can meet the 50-percent share of RE in the country’s energy mix, according to a report by Manila Bulletin.
The target, as cast in the updated National Renewable Energy Plan (NREP), is higher than the 44,000MW level of greenfield RE developments previously drawn up by the Department of Energy (DOE) and the National Renewable Energy Board (NREB).
The NREP stipulated that by year 2040, the aggregate installed capacity of power plants in the country must reach 102,231 megawatts comprising of existing, committed and new build capacities.
“Simulations showed that new-build capacities from RE, with a total of 52,826 MW, have to be added,” the RE plan released by the energy department had shown.
It was expounded that the targeted RE developments shall comprise of 27,162MW of solar; 16,650MW of wind; then hydro capacities shall be at 6,150MW; geothermal at 2,500MW and biomass is seen relatively marginal at 364MW.
The NREP similarly recommended the installations of flexible gas plants by as much as 18,859MW, because this still serves as the perfect technology combination to the on-and-off electricity generation of renewables.
Nevertheless, the RE plan acknowledges the multiplicity of hurdles that could hamstring targeted investments in the RE sector, therefore, it is recommended that the policy and regulation fixes to be carried out by the Marcos administration shall focus on these concerns.
Industry players reckoned that the delayed implementation of enabling policies under the Renewable Energy Act – such as the Renewable Portfolio Standards (RPS) and the Green Energy Option Program (GEOP) – hobbled investments in the sector; hence, the country is now on catch-up mode when it comes to installation targets.
“Out of the total number of awarded RE service contracts, only 183 projects or about 17-percent were completed. This reveals that the Philippines’ RE sector faced several issues and challenges which significantly hampered its supposed development,” NREP stated, noting further that “their late implementation contributed to the slow growth of RE capacities.”
The other concerns raised by investors had been those on: complex permitting processes; grid interconnection issues; high upfront capital outlay for some RE technologies like geothermal and offshore wind; limited access to financing; as well as exposure to climate-related risks, such as the frequent strike of strong typhoons that typically affect work flow at construction sites.
On concerns of wheeling the generated capacity of RE facilities, it was emphasized that “existing grid infrastructure have limited remaining capacity and the needed grid expansion projects are usually delayed. These result to the inability of the grid to immediately absorb new RE projects and delays in its commercial operation.”
The State-underpinned RE plan similarly highlighted that “the high cost and lack of model projects for offshore wind and ocean technologies made initial development a challenge.”
In terms of project funding, it was specified that “the country’s largest banks have mostly financed the RE projects of major developers and industry players, which are often part of conglomerates,” therefore, that places start-up RE firms on the marginal end of the equation.