Difficult road ahead for renewable energy sector

The renewable energy sector in the Philippines is in danger of “dropping behind” its five other neighbors in the Asean given the delays in the implementation of the necessary mechanisms that will drive the growth of this industry, according to a global independent market research firm.

In a July 2012 paper titled “Meeting the Energy Challenge in South East Asia,” the Ipsos Business Consulting, the market intelligence and strategy consulting division of Ipsos, said the Philippines was still by far the most developed market with an existing capacity of 5,439 megawatts, or 56 percent of total installed RE capacity across the six key Asean countries, which also include Thailand, Indonesia, Malaysia, Vietnam and Singapore.

“The situation, however, can change rapidly as all Asean governments are committed to developing renewable sources of energy,” said Colin Kinghorn, head of consulting for Thailand, Indonesia and Vietnam of Ipsos.

“Though the formulation of the National Renewable Energy Program (NREP) by the Department of Energy affirms the government’s commitment to accelerate exploration and development of RE, remaining challenges for the Philippines include details of policies, programs, guidelines and support currently under development. These include feed-in-tariffs, renewable portfolio standards, net metering and an RE trust fund,” Kinghorn explained.

It was only last month that the feed-in-tariff rates were issued, almost four years after the Renewable Energy Law was enacted.

Ipsos said it still believed that the Philippines—one of only two countries in Southeast Asia where renewable energy approaches commercial viability—still had a strong potential of achieving its RE targets despite facing some regulatory hurdles that have slowed down the implementation of the Renewable Energy Law.

Based on the NREP, the Philippine government is pushing for a three-fold increase in the use of RE resources to more than 15,000 megawatts within a 20-year period, with expected investments seen reaching roughly a P1 trillion.