RP turns to green energy

WITH record crude prices fading into the background, 2009 marked the year when green energy moved beyond being a promising technology for a cleaner environment in the Philippines. After decades of neglect because of high production costs and limited markets, the development of biomass, geothermal, solar, hydro, ocean and wind power—or what the Department of Energy called the Big Show—received serious attention.

What gave a boost to the once empty green promise was the passage of the Renewable Energy Act of 2008.

The law was passed amid record crude prices, which sent local electricity and pump prices shooting for the stars.

The landmark legislation gave investors reason to take a second look into the most expensive investment to date in the power industry.

Compared with conventional fossil fuel-based power plants, renewable energy sources remain more expensive on a per megawatt basis to put up. Furthermore, it takes years of studies to find feasible areas for the development of such projects.

One incentive under the law is the feed-in tariff, which calls for a pegged price of electricity sourced from renewable energy sources for 12 years. The law also gives priority to the purchase of, as well as transmission and payment of such sources in the power grid.

The law also requires electricity suppliers to source a certain amount of their energy supply from renewable resources.

Such incentives provided enough leverage for investors to look into this new business, judging by the more than 80 exploration and development contracts signed so far.

“Renewable energy is the wave of the future . . . We develop economic growth without increasing our level of carbon emissions,” said Jose Leviste, chairman of Constellation Energy Corp., a new player in the power generation sector.

Today, upstart companies like Constellation scour areas across the country to put up energy projects in an industry that once was the preserve of government and large independent power producers.

The downstream petroleum sector likewise turned greener in 2009 with the doubling of the biodiesel blend in diesel products—from B1 to B2.

Oil companies were also mandated to blend 5-percent ethanol in their gasoline products. By 2010, this blend will be raised to 10 percent.

The Biofuels Act of 2006 was crafted in line with government efforts to cut oil imports as well as to promote cleaner sources of fuel. Under the law, the biofuels to be blended with petroleum products should be indigenous crops.

“To me there is no other way but renewables. There is no other way. You have to substitute the fossil fuel with what is locally available. The technology is there. Can you imagine cassava becoming gasoline?

What more can you ask? You will be empowering farmers and you will utilize three million unutilized farms,” Fernando Martinez, Independent Philippine Petroleum Companies Association (IPPCA) chairman, said.

At present, local production of biodiesel is enough to meet demand from oil companies. Local ethanol supply is beginning to pick up with the entry of a number of producers. By 2011, industry officials estimate that the country will have enough local ethanol production to displace imports. –EUAN PAULO C. AÑONUEVO REPORTER, Manila Times