DoE backs full foreign ownership of renewable energy projects

THE DEPARTMENT of Energy (DoE) said on Wednesday that it supports 100% foreign ownership of renewable energy projects to facilitate the Philippines’ shift to indigenous sources of power, making it less vulnerable to disruptions in the supply of imported fuels.

“We need to address the industry’s needs and definitely, one way of doing that is to open up renewable energy… to 100% foreign ownership so that foreign locators can actually also develop their own sources of power,” Energy Secretary Raphael P.M. Lotilla said at a Senate energy committee hearing.

The 1987 Constitution prescribes 60-40% ownership in favor of Filipinos for most renewable energy sources, excluding biomass and geothermal.

The DoE told the committee that the Philippine energy supply is generally adequate during the cooler months, with the only risk of disruption being unscheduled power plant downtime. The main problem is power supply during the dry season.

“My rule of thumb is for every one degree (the temperature drops), it’s a deduction (in consumption) of 100 megawatts. So, as we go into the cooler months, our reserves also go higher,” Mr. Lotilla said. “But for the summer months, I have to tell you that I’m beginning to have concerns about that and we will do our best precisely to address stranded power out there.”

The long-term solution, he added, is to shift to hybrid systems.

“We must end this overdependence on petroleum and petroleum-based fuels because otherwise, we’ll always experience volatility in prices,” he said. 

“We would have to invest in solar, wind, and even newer technologies. I hope down the road (to also develop) ocean, thermal, hydrogen, off-shore wind… these are the things that we would need to invest in so that our people don’t have to depend on petroleum-based fuels,” he added.

Senator Rafael T. Tulfo, who chairs the committee, proposed the use of tidal energy to harness power from ocean waves. Mr. Lotilla called this “promising” due to the Philippines’ archipelagic geography; however, he noted that the cost remains high.

He said viability will come eventually judging by the development timeline of solar and wind power, which have become progressovely cheaper with wider adoption.

He added that legislative reform is needed to successfully achieve a renewable-heavy power mix.

“We would like to work with you again in having a more definite roadmap towards achieving those targets,” he told senators.

Senator Joseph Victor G. Ejercito cited a bill he recently filed calling for a comprehensive master plan for infrastructure development, which had transportation and energy components.

“We need to have long-term planning that includes energy for the next 50 to 100 years,” he said, citing the possible role of nuclear energy in bringing power costs down.

Mr. Lotilla supports the use of nuclear energy, noting that his position remains, “we should not ban technlogies, but we should set standards.”

The Philippines has long been a supporter of the peaceful use of nuclear power, he added, so in this case, the government will need to incorporate a regulatory and policy framework, as well as work on vital bills for downstream natural gas.

“In putting the regulatory measures in place, we will have to think about the safety standards and that we will comply with all the strengthened requirements imposed by the International Atomic Energy Agency especially after the Fukushima incident in Japan,” he said.

“Perhaps a regional approach with other ASEAN (Association of Southeast Asian Nations) countries, because they are also planning to put up or explore putting up these nuclear power plants especially in modular form. We can come together, develop standards together, train people together, and in case of emergencies, we can pool our resources together, down to the disposal of nuclear waste,” he added.

The committee hearing was called to explore ways to reduce the price of energy in a way that serves the interests of both consumers and producers.

“We must make sure to ease the investment into the energy industry in order to avoid an impending energy crisis upon the depletion of our current largest natural gas source,” Mr. Tulfo said. “We must see to it that our government regulatory framework is streamlined and responsive to the needs of the people and put an end to abusive and self-centered practices.”

“And finally, with the guidance of our current administration, we must create a framework for our country to utilize novel means of energy such as nuclear energy and tidal power,” he added. — Alyssa Nicole O. Tan