the national renewable energy program: the...

THE NATIONAL RENEWABLE ENERGY

PROGRAM: The Road Starts Here European Union-Philippines Meeting on Energy

Mandarin Oriental, Philippines February 27, 2012

JOSE M. LAYUG, JR. Undersecretary

Department of Energy Republic of the Philippines

DISCUSSION OUTLINE

•  The National Renewable Energy Program (NREP) – Statutory Basis

•  The NREP Basics –  Fundamental Principles –  Energy Supply and Power Mix –  Resource Targets –  Comparative Resource Production and RE Utilization

•  Policy Considerations

STATUTORY BASIS

This Act shall establish the framework for the accelerated development and advancement of renewable energy resources, and the development of a strategic program to increase its utilization…Section 3, Renewable Energy Act of 2008

STATUTORY BASIS

NREB shall recommend specific actions to facilitate the implementation of the National Renewable Energy Program to be executed by the DOE and other appropriate agencies of government and to ensure that there shall be no overlapping and redundant functions within the national government departments and agencies concerned…Section 27, Renewable Energy Act of 2008

NATIONAL RENEWABLE ENERGY PROGRAM

•  Launched on June 14, 2011 •  Signals big leap from fragmented initiatives into a

focused and sustained drive towards energy security and improved access to clean energy

•  Sets indicative interim targets for delivery of RE within timeframe of 2011-2030 – a “Living Document”

•  Requires periodic review to ensure it confirms to policy objectives of Renewable Energy Act of 2008

•  Issues on transmission, grid integration for intermittent RE resources, social and economic impact


•  Seeks to increase RE-based capacity to an estimated 15,304 MW by the year 2030, almost triple the 2010 level of 5,369 MW

•  Institutionalizes a comprehensive approach to address challenges and gaps that prevent wider application of RE technologies in a sustainable manner

•  Outlines action plans necessary to facilitate and encourage greater private section investments in RE development


RE-based On-Grid Capacity Installation Targets

BIOMASS PLANTS

GEOTHERMAL PLANTS

HYDRO PLANTS

WIND AND SOLAR PROJECTS


•  Increase geothermal by 75% •  Increase hydropower by 160% •  Deliver additional 277 MW biomass power capacities •  Attain wind power grid parity with 2,345 MW

additional capacities •  Mainstream additional 284 MW solar power and

aspirational target of 1,528 MW •  Develop 1st ocean energy facility


FUNDAMENTAL QUESTION: WHY DOES THE PHILIPPINES HAVE AN AGGRESSIVE RE TARGET?

COMPARATIVE RE UTILIZATION !"#"$%&'()$*+,-(+.$/01+2.$3455).6$,0$7%8/$

Source: BP Statistical Review of World Energy, 2011

Share of RE and Non-RE

PRIMARY ENERGY SUPPLY MIX

Imported Ethanol, 0.10%

Imported Coal, 8.70%

Imported Oil, 31.70%

Oil, 2.40% Coal, 6.30%

Natural Gas, 8.10%

Hydro, 6.20%

Geothermal, 22.50%

Biomass, 13.60%

Wind/Solar, 0.01%

CME/Ethanol, 0.30%

Indigenous Energy , 59.41%

2009

PRIMARY ENERGY SUPPLY MIX

Imported Ethanol, 0.3

Imported Coal, 8.6

Imported Oil, 33.6

Oil, 2.3 Coal, 8.6

Natural Gas, 7.4

Hydro, 4.8

Geothermal, 21

Biomass, 13.1

Wind/Dolar, 0.01

CME/Ethanol, 0.3

Indigenous Energy, 57.51

2010

POWER GENERATION MIX

Biomass, 0.04%

Natural Gas, 28.8%

Coal, 34.4% Solar, 0.002% Wind, 0.09%

Oil, 8.0%

Hydro, 11.5%

Geothermal, 14.7%

2010 Biomass, 0.02%

Natural Gas,

32.1%

Coal, 26.6%

Solar, 0.002%

Wind, 0.1%

Oil, 8.7%

Hydro, 15.8%

Geothermal,

16.7%

2009

CRUDE OIL IMPORTATION

Others, 7 Indonesia,

0.5

Malaysia, 8.2

Saudi Arabia, 45.1

UAE, 20.3

Qatar, 16.7 Oman, 2.1 Iraq, 0.2

Middle East, 84.4

2009

CRUDE OIL IMPORTATION

Others, 8.2

Indonesia, 0.7

Malaysia, 10.2

Saudi Arabia, 45.3

UAE, 27

Qatar, 6.4

Oman, 1 Iraq, 1.2

Middle East 81%

2010

COMPARATIVE ENERGY DATA

Country Oil Production Gas Production Coal Production

RE Target

China (coal 70%) 3.99 mb/d (5th) 94 bcm (8th) 3,240 Mt (1st) 30% (2035)

Vietnam (coal) 300 kb/d (35th) 9.4 bcm (42nd) 44.1 Mt (17th) 5% (2020)

Thailand (natural gas 66%)

380 kb/d (32nd) 30.8 bcm (25th) 17.9 Mt (25th) 25% (2021)* (currently 2%)

Indonesia (coal and oil)

1.09 mb/d (21st) 82.8 bcm (12th) 305.9 Mt (6th) 25% (2025)* (currently 4%)

Malaysia (natural gas 60%)

693 kb/d (27th) 58.6 bcm (16th) 78 Mt 17% (2030)* (currently 5%)

Taiwan (nuclear, oil and natural gas)

276 kb/d (37th) 310 m3 (71st) N/A 15% (2025)* (currently 8%)

India (coal 53%) 878 kb/d (24th) 120 bcm (5th) 569.9 Mt (3rd) 15.9% (2022) (currently 11%)

South Korea (oil, coal and nuclear)

48 kb/d (65th) 532 m3 (66th) 3 MMst (short tons)

10% (2022)

PHILIPPINES (coal and gas)

9 kb/d (85th) 3.1 bcm (52nd) 7.2 Mt (31st) 50% (2030) (currently 30%)

Final Installation Targets: •  Maximize cheaper technologies (run-of-river hydro and

biomass) •  Manage more expensive RE resources (wind, solar, ocean)

RPS and FIT: •  Bi-annual review of installation targets •  Annual assessment of FIT and FIT-Allowance, Degression •  Encourage cheaper RE resources development •  DOE conducted separate FIT study with lower amounts

22

DOE OPTIMIZATION


The expected milestones over the period 2011 to 2030

POLICY CONSIDERATIONS

•  Constraints in promoting RE –  Current state of electricity prices –  Bureaucratic process and litigious orientation

•  Current policies to promote RE – RE Law fiscal and non-fiscal incentives

•  Appropriate electricity pricing policies •  Future policy requirements to commercialize RE

–  Bidding for allocation and FIT? –  Capping RE targets?

THE ROAD STARTS HERE

THE NATIONAL RENEWABLE ENERGY

PROGRAM: The Road Starts Here European Union-Philippines Meeting on Energy

Mandarin Oriental, Philippines February 27, 2012

JOSE M. LAYUG, JR. Undersecretary

Department of Energy Republic of the Philippines

the national renewable energy program: the...

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