16 renewable energy for energy security - prof. rowaldo del mundo
TRANSCRIPT
Prof. Rowaldo del Mundo College of Engineering University of the Philippines Diliman, Quezon City
Renewable Energy for Energy Security
ENERGY SECURITY 16th session of the UP Academic Congress
Feb. 16, 2010 Malcolm Theater, Malcolm Hall, U.P. Diliman
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Energy Security as National Issue
International Energy Agency (IEA) 1. Adequate 2. Affordable 3. Reliable
European Commission “Uninterrupted physical availability of energy products on the market, at a price which is affordable for all consumers (private and industrial)”
What is Energy Security?
Considering the above definition, one can say that the Philippine energy is NOT SECURED because we have been experiencing the cycle of power capacity deficiencies and high prices (3rd highest in Asia)
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Energy Security as National Issue
The dismal growth of our economy which lead to high unemployment and migration of many Filipinos as overseas workers can be attributed in part to unstable supply and high price of energy.
Electricity Demand of the Philippines
PERIOD Average Annual Growth Rate (%)
1999 – 2008 3.5% 2001 – 2008 3.4% 2004 - 2008 1.8%
The declining growth rate of electricity demand in spite of high population growth rate shows a declining economic activity
Source: DOE
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Energy Security as National Issue
Per Capita GDP and Energy Consumption in Southeast Asia
Source: Maria Nimfa F. Mendoza, “The Socioeconomic Impact of Energy Security in Southeast Asia”, School of Economics, University of the Philippines
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Energy Security as National Issue
Phases of Philippine Power Industry 1900 – 1935: Introduction of Electricity and Organization of
power industry (Regulated Monopoly Private Enterprise) 1936 – 1971: Government Initiatives in the Industry
Development (Power Generation/Transmission and Electrification)
1972 – 1984: Nationalization of Power (Generation and Transmission) Industry
1986 – 2000: Private Sector Participation in Power Generation (IPP Program)
2001 – present: Restructuring of Power Industry to introduce competition
Each Phase of the Industry has its problem or issue to solve.
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Energy Security Risks Energy Market Instabilities
Caused by unforeseen changes in geopolitical or other external factors (Political unrest and trade embargoes)
Compounded by uneven distribution of reserves (35 oil producing countries out of 220 countries and not all producing are exporting)
Technical Failures Power outages caused by plant or grid malfunctions
Physical Security Threats Terrorists, sabotage, theft, or piracy and natural disasters
Adequacy, Reliability and Prices are disturbed because of uncertainties
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Potential of Renewable Energy in Energy Security
Renewable Energy sources are INDIGENOUS resources and can reduce dependence on energy imports
RE is appropriate for archipelagic character of Philippines Can be dispersed (minimize impact of technical failures and physical
security threats)
2008 Power Generation Mix
(%)
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Potential of Renewable Energy in Energy Security
Renewable Energy Resources abound in the Philippines Hydro Power Resources
• Potential: 10,500 MW • Utilization: 3,2242 MW
Geothermal Power Resources • Existing Capacity: 1,900 MW (2nd Largest producer in the world) • Potential Additional Capacity: 1,200 MW
Wind Power Resources • Technical Potential: 7,404 MW (Grid-Connected) • Utilization: 33 MW
Solar Power Resources • Potential: 5.1 kWh/m2/day (5 sunshine-hours) • Major solar cell manufacturing hub in SEA
Biomass Power Resources • Sugar Cogeneration Potential : 540 MW • Rice Husk Potential: 360 MW Sources: DOE, NREL,
UPSL
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Potential of Renewable Energy in Energy Security
Policies that provide an environment for development and deployment of Renewable Energy are in place MARKET DEVELOPMENT MECHANISMS
1. Renewable Portfolio Standard (RPS) • Minimum percentage of generation to be sourced from eligible RE
resources 2. Feed-In-Tariff (FIT) • Guaranteed fixed price for electricity produced from emerging RE
Resources 3. Energy Market and Regulation • Submarket in WESM where RE certificates will be traded • Priority dispatch for Intermittent RE Power • Exemption from Deep-Connection Charging Policy
4. Off-Grid Development • Minimum Annual Production from RE and Cash Incentives for ME
Sources: DOE, Phil. Congress
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Potential of Renewable Energy in Energy Security
Policies that provide an environment for development and deployment of Renewable Energy are in place FISCAL INCENTIVES
1. Duty-free importation of RE equipment (within 10 years) 2. Special realty tax rates 3. Special corporate tax rate (10%) 4. Net Operation Loss Carry-over (7 consecutive years) 5. Tax Exemption of Carbon Credits 6. Tax Credits on Domestic Capital Equipment and Services
Sources: DOE, Phil. Congress
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Potential of Renewable Energy in Energy Security
Policies that provide an environment for development and deployment of Renewable Energy are in place Other Incentives
1. Commercialization • Tax and duty free importation • Tax credit on domestic components • Income tax holiday (7 years) • VAT zero-rated for all RE equipment transactions • Tax Rebate for purchase of RE Components
2. Consumption • Zero percent VAT on sale of fuel generated from RE • Green Energy Option • Net-Metering
Sources: DOE, Phil. Congress
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Potential of Renewable Energy in Energy Security
Declining Cost of Renewable Energy Technologies
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Conclusion and Recommendations
The Problem of Energy Security manifested in unstable supply and high prices of energy are inter-related
Renewable Energy provides potential for ensuring energy security of the Philippines Renewable Energy Resources are abundant Technology costs are declining Policy environment is in-place
The Challenge: Translating Incentives to Energy Security
How to translate the incentives for power developers and suppliers to ensure energy infrastructures are developed on time and the price of energy affordable to customers?
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Conclusion and Recommendations Changes in industry structure and market is not a
guarantee that the problems will be solved Market Competition and Regulation must work to assure us of
adequate, reliable and affordable prices. The challenges due to the following factors must be addressed:
• Asymmetrical positions in Power Supply Contracting • Capacity building • International Tendering • EPIRA amendment to remove Cross-ownership
• Small market for competition to work • Conversion of WESM from Gross Pool to Net Pool
• Appropriateness and Timeliness of Regulatory Interventions • Assure technically competence and independence of regulator
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