Development of solar projects face numerous hurdles

MANILA, Philippines — The upcoming elections and land-related permits are seen as stumbling blocks for the development of solar projects, which are the fastest to deploy to boost supply to aid in economic recovery and avert possible brownouts in the grid, according to solar developers.

While securing of permits for solar power projects improved since the enactment of the Energy Virtual One Stop-Shop Act (EVOSS), the new computerized EVOSS system does not cover permits related to land, said Cleantech Global Renewables Inc. CEO Salvador Antonio Castro during the Asian Solar Summit last week.

“As of today, permits related to land, specifically land re-classification and DAR (Department of Agrarian Reform) conversion, aren’t part of the EVOSS system yet. That means you need anywhere between three to six months, or even eight months or longer, for us to be able to do both re-classification and DAR conversion,” he said.

That’s why the solar industry is asking for an interim moratorium on land-related permits to speed up the development of solar farms.

“In today’s world, we do not have the reserves wherein the pandemic is still present, and we have to ensure that vaccines are fully contained and kept at a certain temperature so that we’re able to distribute that all over the Philippines,” Castro said.

“We definitely need the power and perhaps for the next three to five years, we can have a moratorium on land re-classification and DAR conversion. Because if you’re able to do that, then we can shorten our development cycle by as much as eight months,” he said.

In the same event, MRC Allied chief public relations and business development officer Maria May Militante noted that LGUs are not expected to release permits in the next couple of months knowing that there is an impending change in administration.

An issuance of an executive order (EO) by the President and a department order from the Department of Energy could help address this concern.

These issues are on top of the lack of financing support long raised by the solar industry, especially for merchant plants or those plants that sell their capacity in the wholesale electricity spot market.

Currently, banks are only backing power plant developments with power supply agreements (PSAs) with power distributors.

The CSDP is finalizing a position paper on the financial viability of merchant plants, which will be sent to Philippine banks as a call for support.

Castro said the government needs to find a solution to achieve energy security since it is a state concern and financing is a critical concern which government banks can address.