EU, Phl in exploratory talks on RE investments

MANILA, Philippines - The European Union (EU) has began exploratory talks with the Philippine government on possible renewable energy investments in the country.

EU Ambassador to the Philippines Guy Ledoux said no investment commitments were made yet but European companies have expressed interest in investing in geothermal energy, wind and, solar power, and ocean technology.

“We are not in that stage yet (committing investments) but European companies have demonstrated interest in the renewable energy market in the Philippines,” he said in press conference after the 1st EU-Philippines Meeting on Energy.

In his speech at the meeting held in Makati City, Ledoux recognized the Philippines’ strength in the geothermal energy sector which provides for 20 percent of the country’s energy requirements while 35 percent of the Philippines’ total power requirements, comes from renewable energy sources.

“That is how advanced the Philippines is in this sector. What is still experimental in many countries around the world has become a thriving industry in the Philippines,” he told delegates in the energy meeting.”

Ledoux said the provisions contained in the Renewable Energy Act of 2008 provides a good platform for potential EU investments in the renewable energy sector.

The Renewable Energy Act of 2008 mandates the establishment of a feed-in-tariff for qualified renewable energy projects. The incentive basically provides guaranteed rates over a period of time for green power developers.

However, the higher cost of green energy would still be shouldered by consumers.

The law aims to encourage the development of renewable energy generating facilities, which have been hampered by high investment costs and limited markets compared with traditional power plants that run on fossil fuels.

It is widely feared that if the feed-in-tariff rates are implemented, power rates are expected to rise 12 centavos per kilowatthour (kwh).

Ledoux told delegates to the energy meeting that fears of power rate increase should not prevent the government from implementing the feed-in-tariffs because EU nations like Germany became one of the largest renewable energy market worldwide.

“Germany, for instance, as a result of the implementation of aggressive feed-in-tafiffs and tax incentives has become the third largest wind market globally and is home to almost half of the world photovoltaic installed capacity,” he said.

“The EU and the Philippines share the same ambition in the renewable energy sector...The Philippines sees a tripling of its renewable energy capacity by 2030,” he said.

“It is encouraging to see that the Philippines has chosen to rely on a set of instruments common to many of the EU member states,” he added.

Ledoux said that net-metering, another feature of the Renewable Energy Act, is being implemented in Denmark, Italy and Spain.

The EU, under the 2009 Directive on Renewable Energy, is targeting to source 20 of its energy requirements from renewable energy sources by 2020, and 10 percent specifically in its transport sector. This is in line with the regional goal of reducing greenhouse gas emissions to at least 80 percent below 1990 levels by 2050.

Ledoux noted that the renewable energy industry in EU had a total turnover of 127 euros in 2010,” comparable to the GDP of a country like Pakistan,” and employs more than one million people, many of whom are employed as highly-skilled workers.

During the press conference, Energy Secretary Jose Almendras said using renewable energy sources is not expected to immediately lower cost.

“I would be lying if I say that the effects will be felt immediately...Maybe in the long-run,” he said.

In terms of possible investments in the renewable energy sector, Almendras recommends the harnessing of energy sources abundant in the country like wind power and ocean technology.

Senator Edgardo Angara, principal author of the Renewable Energy Act of 2008, said renewable energy sources in the country, if effectively tapped, can supply 90 percent of the country’s energy requirements.

“That’s why we look to EU for transfer of technology and investments,” he said.