June 21, 2017

Lack of Clear Rules on Renewables Stalls Wind Development in the Philippines

Lack of clear-cut policies on the renewable energy sector hinder the further development of the wind sector in the Philippines, according to Vestas of Denmark, the world’s largest wind turbine manufacturer.

In a position paper, Vestas said the development of renewable energy, particularly wind and solar, is nearly at a standstill in the near-term due to the current policy vacuum, which follows the full allocation of the first two rounds of feed-in tariff (FIT) and the freeze of an expected third round of FIT.

The renewable energy policy gap is a concern among industry stakeholders as this delays installation targets.

“We are concerned about the near-term outlook for wind in the country. Since the FIT-2 came to an end, and until other policies come into effect, there is no operational wind regulatory framework. As a result, wind development has come to a near halt while conventional fossil fuel generation continues to grow significantly,” Vestas Asia Pacific president Clive Turton said.

Earlier, Department of Energy (DOE) Secretary Alfonso Cusi said the FIT system will not be expanded into another round since this adds burden to consumers and runs against the agency’s goal of bringing down the power rates.

Instead of a FIT system, the industry is supporting the implementation of Renewable Portfolio Standards (RPS) and any other policy tool, which aims to drive RE development and the fulfillment of binding Low-Carbon and RE Targets.

Turton said a wind energy pipeline of several hundreds of megawatts (MW) stands to be unlocked with clear policy in place.

“The Philippines has some of the most abundant wind resources in South-East Asia. And modern wind energy technology is able to generate more power, at a lower cost than ever before. This creates a real opportunity for the country to meet part of its growing electricity needs using competitive, independent, and clean wind energy,” he said.

However, the company acknowledged the fact that full implementation of RPS and a new procurement policy will around two years, giving way for other developers to put up more thermal power generation to meet growing power demand.

“In this context, the future RPS will need to reflect this reality and align its targets and assumptions to compensate for the delay being taken now, unless policy makers put in place immediate transition policy measures to allow RE development to continue until the RPS and Post-FIT mechanism are fully in place,” the company said.

Vestas also said wind energy also creates local skilled jobs. Currently, the firm employs over 400 people in the Philippines, where Vestas Services Philippines and Vestas Shared Service are located.

Despite the policy vacuum for the sector, Vestas remains committed in developing wind projects in the country.

“Vestas is committed to help write the next chapter of wind energy deployment in The Philippines, and work with all government and private sector partners to that effect,” Turton said.

So far, Vestas has delivered and are servicing 183 MW in the country, including the Burgos Wind Power Plant in Ilocos Norte – one of the largest wind energy project in Southeast Asia.

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