DOE eyes 100% foreign RE ownership to spur manufacturing investments

by Myrna M. Velasco, Manila Bulletin

The Department of Energy (DOE) is studying prospects of opening up the renewable energy (RE) sector to 100 percent foreign ownership, primarily in the domain of solar and wind farm installations, for the manufacturing sector.

Energy Secretary Raphael P.M. Lotilla raised this possibility as he acknowledged the need to address the high cost of electricity for the manufacturing sector, which investment potential has been hampered by the country’s high cost of electricity.

“One way of doing that is to open up renewable, for example, to 100-percent foreign ownership; so that foreign locators can actually also develop their own sources of power,” said Lotilla.

The energy chief further noted that subsidizing the cost of power for the manufacturing sector is not a feasible option given the fiscal situation of the government, hence, there must be alternative ways to pare electricity rates for industrial users in the country.

In other economies, deployments of solar tech solutions are largely embraced by commercial and industrial (C&I) end-users because that has been a way for them to save on costs – especially for energy-intensive industries.

For the Philippines, however, the restrictive policy on foreign ownership is weighed up as a major hurdle to capital flow when it comes to RE investments.

Under the Duterte administration, 100 percent foreign ownership to other RE technologies, primarily geothermal which had been classified as “mineral resource”, had already been permitted within the ambit of the Financial and Technical Assistance Agreement (FTAA) albeit that came with a condition that the minimum capital to be funneled by foreign investors must top $50 million for integrated steam resource exploration and power plant installation.

For hydro, full foreign ownership is allowed in the power plant component while water resource utilization still has restrictions, in favor of Filipino companies or entities. Biomass technology is also open to a hundred-percent foreign equity.

On the sphere of solar and wind farm developments, however, energy officials are still assessing if they can come up with “technical justification” that will allow higher percentage of foreign investors’ shareholdings in RE projects.

The DOE and the National Renewable Energy Board (NREB) previously indicated that any policy adjustment to be carried out shall be in keeping with the prescriptions of the Philippine Constitution relative to the exploration and exploitation of indigenous resources.

It was emphasized that if a technical legal justification could not be established, the only way to widen foreign ownership in these emerging RE technologies shall be through Constitutional amendments.

In many RE projects in the country, capital injection and technology rollout are often buoyed by foreign investors, but until the ownership limitation is addressed, it may take longer time for the Philippines to win back its allure on RE investments given the stiff competition that it has been facing with Asian neighbors.

A world without fossil fuels?

SAT, NOVEMBER 18, 2017 BY THE MINDANAO DAILY MIRROR LEAVE A COMMENT

IN MY OPINIONKlaus Doring

A world without  fossil fuels?

As today's Editoral in MINDANAO DAILY MIRROR (November 17, 2017)  goes: "President Duterte has changed heart and now gave the Department of Energy the green light to consider plans to reactivate the mothballed Bataan Nuclear Power Plant. This after the Philippine and Russian governments agreed to cooperate in the development of national nuclear infrastructure in the country... ."

Allow me to ask: Is it possible to fulfill all our global energy needs with renewables only? And which technologies work best to help us transition to a world without fossil fuels? Scientists give answers at COP23, which is still ongoing in Bonn/Germany at this moment.

"A full decarbonization of the electricity system by 2050 is possible for lower system cost than today based on available technology," said Christian Breyer, who heads a team of international researchers at Lappeenranta University of Technology (LUT) in Finland.

Breyer and his team looked at data from all over the world, such as energy consumption, demographic development and weather. They also analyzed which technologies are expected to be the cheapest in the next three decades.

"Energy transition is no longer a question of technical feasibility or economic viability, but of political will," Breyer added. Breyer's team and NGO Energy Watch Group (EWG) presented their findings at COP23 in Bonn.

And I learned: falling costs give rise to solar power. Why? Due to rapidly falling costs, solar photovoltaic (solar PV) and battery storage are the main drivers of securing the global energy supply. Solar PV's share of total power supply is expected to rise from 37 percent in 2030 to almost 70 percent by 2050, the study said.

Wind energy would make up 18 percent, hydropower 8 percent and bioenergy 2 percent of the total global energy mix by 2050, according to the scientists' estimates.

The energy mix would of course look slightly different in areas with a lot of wind and fewer hours of sunshine, such as in Europe's and Asia's northern regions. 

  

And here are several Germany's climate innovators: A sunny future for e-cars? To guarantee access to electricity day and night reliable storage is of course a must. According to Breyer's simulation, about 30 percent of overall demand in 2050 will be met by storage output and 95 percent of that, in turn, will be covered by batteries alone. The study's authors have calculated with a global population of almost 10 billion people by 2050 - that means the world's hunger for power is expected to double as a result.

Twice as many new jobs? Maybe These changes are obviously helping with air quality and overall a more healthy environment, but they also help with jobs. At the moment, there are about 19 million people who are employed in the energy sector - half of those are working for the coal industry. These jobs will be made redundant by the transition to renewables; however, twice as many new jobs would be created as a result, according to estimates.

Huge strides towards cutting down emissions - another headline nowadays!  At COP23 in Bonn, delegates are trying to come up with ways to reduce carbon emissions to limit global warming well below 2 degrees Celsius and help mitigate climate disasters.

Global energy production - especially coal - contributes to 20 percent of all carbon emissions. If the electricity system were to only be powered by renewables, emissions could drop by 60 percent by 2025. By 2030, they could drop by 80 percent.

"Such a scenario is indeed realistic, since renewable energy sources are becoming cheaper and cheaper," said climate economist Claudia Kemfert of the German Institute for Economic Research in Berlin (DIW) when the study was released.

Now, is it utopia or realistic scenario?

"We've seen in the past that all studies did underestimate the development of renewable energy. That's why it's going so much quicker than anticipated and we are looking ahead to the next three decades, where we can meet the target of 100 percent renewables in our energy mix," Claudia Kemfert added.

Energy Watch Group head Hans-Josef Fell agrees with that assessment and says the finance sector also plays a huge role in accelerating this dynamic. "Financial institutions now regard investments in coal, nuclear, oil and gas as risky and terminate their commitments," he said.

Renewable energy sources are regarded as safe alternatives. That is a fact!

"This scenario is essentially the basis if we want to fulfill international responsibilities as laid out by the Paris agreement," said Stefan Gsänger of the World Wind Energy Association. But he was also quick to point out that this is by no means a market-driven self-seller. "I hope we'll build up enough pressure on political decision makers all over the world," he added.

European Member of Parliament Arne Lietz of the Social Democrats says there is still a huge deficit.

"This scenario shows that we must urgently rethink current politics," he said. "But politics are not there yet." Lietz added that "big lobbyists trying to influence the government to keep investing into fossil fuels and ruin economies" were blocking efforts.

Back to nuclear power - and please allow me again to quote today's MIRROR-Editorial:  After the Chernobyl nuclear disaster in the Ukraine back in 1986 all governments should really think twice and act with caution.