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Philippines Renewables Report Q1 2013
Business Monitor International, October 2012, Pages: 35
The Philippines Renewables Report provides industry professionals and strategists, corporate analysts, banking associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Philippines' renewables industry.
Major developments within the Philippines renewables industry have led us to slightly revise our forecasts for the sector. The introduction of a Feed-in-Tariff programme, although lower than initially proposed by the government, has created more certainty within the market for investors and has been factored into our outlook. We believe that geothermal will maintain its dominant position in the nonhydro renewables industry. However, without government subsidies on offer to geothermal developers,
we expect to see higher growth rates within the solar and wind segments.
The Renewable Energy Act of 2008 aims to encourage renewable expansion by introducing a target and adopting subsidies that endorse investment in the sector. The National Renewable Energy Program
(NREP), established in June 2011, set a target of reaching 15,304 megawatts (MW) of installed renewables capacity by 2030, including geothermal, solar, wind and biomass technologies.
Although we believe this target is overly ambitious, we still expect robust growth in the non-hydro renewables industry across our forecast period (2012-2021), and a number of developments within the sector underline our forecasts:
- Almost four years after the Renewable Energy Act was signed into law, the final rates for the country's first FiT mechanism were approved in July 2012 - a proposal for FiTs had originally been submitted in 2011, with were extremely generous rates. However, in an attempt to cushion the impact on the electricity rates, the ERC approved much lower rates.
- International financial institutions are becoming increasingly involved in the renewables sector,
with the Asian Development Bank selecting the Philippines, along with two other countries, as the location for its pilot wind power project, and the Export Import Bank of Korea committing to making loans of up to US$150mn to support wind power projects in the country.
- Philippine renewable energy company Alternergy has secured a deal to directly supply Manila Electric Company (Meralco) with power from its planned 90 megawatt (MW) wind farm in Pililia, Rizal. Other developments within the wind segment include a 300MW wind project being proposed by Manila Electric in August 2012.
- Although inadequate power infrastructure presents a significant challenge to the renewables industry, grid operators are beginning to invest into the T&D network. For example, the construction of $US400mn underwater cable connector for the Leyte geothermal power plant was announced in December 2011.
BMI Industry View 5
SWOT Analysis 6
Philippines Renewables SWOT 6
Industry Forecast Scenario 7
Table: Philippines Total Electricity Generation, Historical Data And Forecasts, 2010 – 2016 7
Table: Philippines Total Electricity Generation, 2015 - 2021 8
Table: Philippines Electricity Generating Capacity, Historical Data And Forecasts, 2010 - 2016 10
Table: Philippines Electricity Generating Capacity Forecasts, 2015 - 2021 11
Renewables Projects Database 17
Table: Major Projects - Renewables 17
Sustainable Energy Policy and Infrastructure 20
Table: Renewable Feed-In Tariffs In Philippines 22
Renewables Risk Reward Ratings 24
Philippines Renewables Risk/Reward Ratings 24
Competitive Landscape 26
First Gen 26
Ayala Corporation 27
Glossary of Terms 28
Table: Glossary of Terms 28
Methodology and Sources 29
Industry Forecasts 29
Renewables Industry - Data Methodology 30
Generation Data 30
Electricity Generation Capacity Data 30
Power Risk/Reward Ratings Methodology 31
Table: Power Risk/Reward Indicators 33