PH Hydropower Market Analytics as of March 2018

Towards the country’s goal of national development, the Philippines continues to implement power market reforms which are found in the Renewable Energy Roadmap 2017-2040, where increasing the Renewable Energy portfolio to a total of at least 20,000MW is being looked at.

According to Guido Alfredo Delgado, a Power and Energy advisor and a Renewable Energy advocate, that RE will soon be displacing coal because of the declining costs of RE that will make coal less competitive in the years to come.

A diverse energy supply system is being promoted, too, and power market reforms such as the Green Energy Options Program (GEOP) is reaching completion, while still being finalized by the Department of Energy (DOE), is already being applied, where a number of industrial facilities already purchase power directly from RE Independent Power Producers (IPPs) or Power Generation companies. Soon consumers can directly contract to distribution utilities or electric cooperatives.

The country has now started doing studies for other sources of energy such as Ocean Energy, Floating Solar System and Battery Energy Storage with further development until 2030, as an addition to Biomass, Geothermal, Solar, Hydro and Wind sources.

With Hydropower having the largest number of players among the Renewable Energy sources including Biomass, Geothermal, Solar, Ocean and Wind, developing and investing on Hydropower Projects look promising, compared to before, especially with new Energy Reforms that are coming in, in which one of them is the Executive Order-30, mandated by the President of the Philippines, creating a committee to regulate the permit applications for speedier regulatory approvals for these RE developers if qualified as Energy Projects of National Significance (EPNS).

There are 445 awarded projects for Hydropower as of 30 June 2017 DOE data, with potential capacity of 13,419.73MW eyed up to Year 2030 and versus 965.04MW installed capacity. Excluded here are the Micro-hydropower projects (HEPs) or small off-grid HEPs connected to the cooperatives and HEPs of the National Irrigation Authority (NIA) and National Electrification Authority (NEA).

Of the 3,553MW indicative hydropower projects as of 30 November 2017 DOE data, 273MW is the potential capacity for small HEPs, with the Luzon Island catering to the most number of HEPs in the country. Of these HEPs, 67% is on the permitting stage, as to the acquisition of permits in the country takes around 6 months the least, and up to 2 years of processing up to approval. There are 93 pending applications for 2,270MW for hydropower alone, and it concludes the interest of developers and investors alike. Despite the ongoing laws for Hydropower development, having the Bilateral Scheme, with the Open and Competitive Selection Process (OCSP) to bid in the Distribution Utility, and implementation of the FiT of Php 5.8705/kWh, which however the FiT allocation for hydro is not yet fully subscribed, still attracts IPPs, though most of the IPPs are doing the 70-80% bilateral and 30-20% Wholesale Electricity Spot Market (WESM) mix. Another thing which attracts developers and investors now is the plan of adding the Wholesale Electricity Spot Market in Mindanao eyeing it implemented by July 2018, WESM, being the Market Operator, can really help control the power distribution in Mindanao.

Development of the Transmission Line to address the energy system is as much important. Included in the 2014-2015 Transmission Development Plan (TDP) are the proposed Major Transmission Projects for 2016-2025, with Metro Manila as the major load center in the Luzon area, where its electricity is being imported from the Northern and Southern parts. For the Visayas Grid, Cebu is considered the major load center. Cebu, as is composed of many islands, utilizing more of the conventional types of energy sources such as coal and bunker.

Quoting from Carlito Salazar, Vice President in one of the Power Generation and Distribution Utilities in the country, that developers and investors are still hopeful and making preparatory works for the eventual implementation of projects.

Philippines is of high potential, and our country, having that inclination to being environmental advocates, we tend to lean towards Renewable Energy more now. Hopeful that these power market reforms can lead us to our goal to getting that RE up in percentage value in our energy mix.

Sources: https://www.doe.gov.ph/