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Interview

Mario Marasigan, Director, DOE Renewable Energy Management Bureau, Philippines

Mario Marasigan, Director of the Department of Energy’s Renewable Energy Bureau, speaks about the resource development projects his office is supervising and why he is unconcerned by the fact that none have yet to reach the construction phase. He outlines his hopes and optimism for a lead entity to pioneer the rush to renewables, and explains how the Filipino power model is fast becoming a regional trailblazer with regard to climate change mitigation and low carbon emissions.

 

What do you consider have been the main milestones and achievements of the Renewable Energy Bureau so far?

We work alongside other public sector bodies such as the Electrical Industry Management Bureau, which oversees actions arising as a result of EPIRA (Electrical Power Industry Reform Act). Since the establishment of the bureau, its principle objectives have been to fully implement the Renewable Energy Act and to locate private investors and participants for resource development. No investors have as yet emerged but we hope the first project will be completed in the very near future. The Philippine government’s ambition to triple renewable energy capacity is simultaneously demanding and exciting: realising this ambition hinges on successful resource development and private sector action.

Currently, the Renewable Energy Bureau is supervising over 300 important projects that are undergoing feasibility studies with private sector players. There is a strong possibility renewable projects will be initiated by innovative businesses in the near future and the Renewable Energy Bureau as a regulatory body will work with these businesses overseeing commercial production of renewable power. The bureau will ensure companies comply with government regulations.

Massive public investment in renewable energy is required to reach the government’s 2030 renewable energy targets and for reasons of energy security. What, in your opinion, is hindering further investment in this sector?

At the moment, none of the projects within the Renewable Energy Bureau’s schedule are operating or under construction. All the projects currently remain in the pre-development stage, though action from several private companies appears imminent. The Philippines is looking for a lead entity to pioneer the rush to renewables. However, we have not sought out an individual player to initiate the first project because we are confident that private players will emerge without prompting. Every project that is developed will be useful in increasing the Philippines renewable energy capacity. Policy currently means the Renewable Energy Bureau does not give special treatment to a developer because they propose a particularly large development.

While the vast majority of projects are proceeding smoothly, a few have been dropped because they are not considered to be economically viable. This is not because the cost of installing a project is prohibitive, but rather it is most commonly because developers do not predict the rate of return on investment will be high enough to make the project attractive in the short-term.

Do you think additional costs associated with renewable energy are holding back the development of the sector?

As stated, project developers are moving forward with renewable energy schemes and it is only a matter of time before further schemes are up and running. Once a certain level of capacity has been reached, costs associated with these industries will fall and more excitingly waste or agricultural by-products can power bioenergy, representing an chance to turn costs into opportunities. If all Manila’s waste were used to fuel power plants, it would be likely that the energy produced would satisfy the entire city’s energy demands. Renewable energy simply needs more lateral thinking and further innovation in this sector will see costs continue to fall.

Are there enough incentives and focus on renewable energy?

There are some areas where government support is absent but this is not necessarily a critical problem for renewable energy development. Geothermal energy is excluded from the feed in tariff here, though to be fair, I am not aware of any country which has a feed in tariff for geothermal energy and geothermal is already price competitive, perhaps not needing further support. Geothermal energy can be sold as soon as a plant is built and is already competitive with other traditional sources of energy, such as coal power. The Philippines has the second largest geothermal resource in the world, and it is the cost effectiveness of this technology that has resulted in the technologies wide spread across the country. Geothermal also reduces the need to import fossil fuels, giving the Philippines greater energy security. Simply put, the Philippines is fortunate to have such a cheap and abundant resource. Government support is not the complete answer to the problems facing renewable energy here: what is required is for private companies to take up the opportunities that exist here.

What competitive advantages does the Philippines have with regard to renewable energy that are particularly attractive to investors?

Due to the country’s constitution, only Filipinos can develop renewable energy sources in the Philippines. A foreign partner can invest and act as an active partner in any project, but cannot own more than 40 percent of the initiative. For this reason, Filipino companies spearhead our renewable energy schemes. Local companies and conglomerates are eagerly trying to pursue projects here in the Philippines and if they demonstrate that their project is legally, technically and fiscally viable, the Renewable Energy Bureau will allow them to proceed with development.

Renewable energy in the country’s energy mix is registering a significant and growing share, however, the country is still largely dependent on imported fossil fuels. What will be the perfect scenario in terms of the country’s energy mix?

The power department in the bureau works with the planning department to decide the optimal energy mix and thus where support should be directed. There are many different sources of energy and over-reliance on a single technology is unwise. We have the target of tripling the current capacity of renewable energy by 2030 from 5,000 MW to 15,000 MW. This leap forwards will be taken by the private sector because as far as EPIRA and regulation of this sector is concerned, there should be no government intervention in this industry.

What lessons can the Philippines provide for other countries in this region that wish to develop a renewable energy program?

The Philippines has long been sharing information based on the country’s practical experience with renewable energy. Filipino representatives are listened to extensively in intergovernmental discussions with our Southeast Asian neighbours about developing renewable energy systems, and this is particularly encouraging because the Filipino power model means that the Philippines has some of the lowest carbon emissions in Southeast Asia, with around 20 percent of our generation coming from geothermal sources alone. There are some who question why the Philippines should pursue sustainable development, given that the nation emits comparatively few greenhouse gases, but the fact remains that emissions from other countries will impact on the Philippines, and if developing green energy systems here can provide a working model for a green economy elsewhere, we will be helping address an international problem.

We also learn from our neighbours as the Southeast Asian countries all have differing strategies promoting renewable energy. For example, the Philippines is the only country that requires the use of biofuels by law—indeed the legal route principally followed by the Filipino Government is unique. Comparing the impacts of other countries’ policies with results here in the Philippines will result in better, more refined policy in the future. We anticipate that working to innovate and improve renewables policy with other countries will be in the interests of both parties.

Do you think that the Philippines will reach 100 percent electrification by 2030?

I do not think so. The target in the near future is to have 90 percent of households connected to main power by 2017. In my opinion, there is not enough time till 2017 to achieve even this goal and even in the longer term it will be very difficult to reach 100 percent household electrification rate because of the archipelagic nature of the Philippines. The current government is pushing as hard as it can to realise this target.

Looking towards the immediate future, how will the Philippines pursue its renewable energy goals?

The Philippines is already the biggest consumer of renewable energy in Southeast Asia. We are the second largest gross geothermal energy producer globally. The proportion of energy consumed in this country derived from geothermal is higher than in the US, which makes the industry here more remarkable.

In terms of energy planning, the Philippines is rapidly diversifying the sources of power available to the consumer. This means that we are not solely dependent on a single source of power and the Renewable Energy Bureau is seeking to involve and engage the private sector to make sure we achieve this aim.

 

To read more interviews and articles on the Philippines, and to download the latest free report on the country, click here.  

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