ECCP statement on the implementation of the Renewable Energy Act of 2008

The European Chamber of Commerce of the Philippines (ECCP), in cooperation with the European National Chambers, noted with deep concern the views expressed by the PCCI and — surprisingly — by the BOI, undermining the country’s move towards renewable energies, alternative fuels and a wider energy mix.

We fully agree with PCCI and the BOI that energy cost have to become more competitive; this is the reason why ECCP strongly supports energy conservation and energy efficiency and why ECCP and the European national chambers have strongly promoted renewable energy.

Part of BOI’s mission should be to reassure investors which will not happen if we have previously invited investors for opportunities in renewable energies and today we ask for a postponement of the implementation of the Renewable Energy Act.

Most of the foreign investors when assessing country risk are looking at “CONSISTENCY” in government policies. The Philippine government announced its policy towards the implementation of renewable energy projects. If the administration were to change the policy soon after that statement, it loses the trust from not only foreign investors in the power sector but also in other sectors. Lack of consistency will definitely make the Philippines less competitive.

We reiterate our full support for the implementation of RA 9513, or the Renewable Energy Act of 2008. We believe that the policy adopted by the Philippine government to harness and utilize the rich natural resources and to promote renewable energy brings the country closer to greater energy security, as well as contributes to the global challenge of reducing carbon emissions to mitigate climate change.

The RE Law is comprehensive in character. Its provisions offer tariff and non-tariff incentives that enable the country to develop water (mini-hydro), wind, solar, ocean and agricultural residues (biogas / biomass) as energy resources. Such policy initiatives covering different RE technologies minimize the exposure of the Philippine economy to international fuel price fluctuations and to energy shortages in general.

Moreover, the country successfully created a platform to capture the growing global investments on clean energy offered by the OECD countries. Through the RE Act of 2008, the Philippines effectively positioned itself as an emerging leader of Southeast Asia in the field of renewable energy, providing mechanisms for private investors to scale up and replicate the country’s initial efforts in building a 25MW wind farm in Ilocos Norte, as well as the 1MW solar power plant in Cagayan de Oro and the 180KW solar rooftop in Batangas.

We urge the national government neither to turn back on this sustainable path to economic development, nor to be distracted by the issue of rate impact to electricity consumers. The experience of European countries like Germany and Denmark are shining examples of how the feed-in tariff mechanism successfully increased deployment of renewables, created jobs for its people and reduced carbon emissions. It has also shown that promoting the different technologies (energy mix) makes for increased efficiency, thus reducing costs. Finally, this will also lead to consumers generating energy for their own use, i.e. outside the scope of the feed-in tariff.

Undeniably, the public will invest money to build the infrastructure for renewable energy. But, taken in the macro-perspective, this amount of two centavos rate increase, for solar energy for example, pales in comparison with the expected inflow of about P33.6 billion worth of investments, should the proposed 269MW capacity of solar power plants be installed. Such financial inflow to the country will create jobs, increased business activities for small enterprises and build new capacity to the grid, especially in Mindanao where there has been a power shortage since two years ago. The two-centavo investment is expected to push economic development and sustained growth for the Philippines. Of course, the “investment level” for mini-hydros and biomass/biogas is marginal compared to traditional energy feedstock like oil and coal.

Grid parity is expected in less than five years for solar energy. As the technology develops, and volumes of megawatts triple in installation, levelized cost of solar energy is expected to drop dramatically. The decentralized generation of solar energy does not only avoid further investments in the national grid but also makes power available at a fixed rate when WESM trades at the highest levels. The constant cost of solar installation will benefit the five million Filipino people currently without access to electricity and relying on fossil fuels, particularly diesel. The continuous use of expensively sourced energy condemns the people in remote locations into a perpetual state of poverty, and expose them to greater health risks.

In conclusion, let us not delay the implementation of the Renewable Energy Law, let us take advantage of the new technologies and learn from the experiences in many European countries, let us reinstate the caps for solar (100MW or more) and for the other renewables, and let us work jointly on energy-savings (energy conservation and energy efficiency). — HUBERT D’ABOVILLE, President, European Chamber of Commerce; RICHARD ELRIDGE, Vice Chairman, British Chamber of Commerce; REINER ALLGEIER, President, German Chamber of Commerce; ERNST WANTEN, President, French Chamber of Commerce; MIGUEL ROMERO-SALAS, President, Spanish Chamber of Commerce. –(philstar.com)