Shared Business View

Addressing climate change is the responsibility of all. Luckily, big global brands are doing their share and choosing to make the shift to cleaner forms of energy.

 For example, last April, tech giants Apple and Google announced that their operations are already running on 100 percent renewable energy. Fortunately, other firms are also stepping up and working double time to source their power needs from greener sources of energy.

 In fact, there are more than 100 influential global companies who have publicly committed to 100% renewable energy through the RE100 initiative. This collaboration of the world’s biggest brands, mostly tech companies was launched in 2014 and have ever since been working on achieving their goals of powering up their operations with renewables.

Last year, other influential non-tech companies have also joined the drive to use greater RE  such as General Motors, Kimberly Clark, General Mills, Starbucks and Target. In total, some 2.78 gigawatts worth of renewables were bought by the RE100’s members in 2017.

These large global brands remain relentless in their pursuit of achieving their targets. This year, members of RE100 are set to break their record by purchasing 1.96GW of renewables. If sustained, corporate RE buying could surpass the peak of 3.12GW recorded in 2015 as reported by the Business Renewable Center.

 One of RE100’s members, Microsoft also made the headlines this April by announcing the largest solar power deal in the US corporate history after buying some 315 megawatts from sPower. The purchase will power the tech firm’s datacenter and cloud business operation in Virginia. To date, Microsoft has already invested a total of 1.2 GW of RE, an amount that can light up roughly 100 million bubs

The declining costs of renewables and companies’ desire for a sustainable energy solution are what drive big business to commit and purchase cleaner forms of energy according to  Kevin Haley, marketing manager at the Rocky Mountain Institute’s Business Renewable Center. “The corporate renewables market is now seeing deals from all industry sectors…… they believe they need to be part of the sustainability solution.”

Addressing climate change is just one of the reasons why large global brands are signing up for more RE purchases. There’s another reason: cost-effectiveness.

These brands’ leadership recognize that sustainable sources of energy will save them money in the long run.  Business leaders understand that choosing to invest in RE will save them money as it eliminates the risk of price volatility of fossil fuels.

 For example,  Urs Hölzle, Senior Vice President, Technical Infrastructure of Google stressed that  “Electricity costs are one of the largest components of our operating expenses at our data centers, and having a long-term stable cost of renewable power provides protection against price swings in energy.”

Autodesk’s President and CEO, Lynelle Cameron echoes the view of Hölzle when she said: “By powering our business with 100% renewable electricity we will not only reduce our carbon footprint but give ourselves a competitive advantage as we protect ourselves against future rises in energy costs.”

For years, I have been trying to convince a great number of people that RE is not necessarily the more expensive energy option. It is refreshing to know that big businesses around the world share my views.

Sadly, many in the Philippines fail to recognize the benefits of renewable energy and still subscribe to the notion of the least cost option, which only considers the upfront costs. We are still caught in the belief of many energy planners and even our regulators that RE will cost us more, and refuse to realize that price spikes and depletion of fossil fuels will set us back.

Lowering energy costs while saving the environment are the two benefits of choosing greener power. Global companies and governments around the world are already seeing the potential of renewable energy and making big bets on cleaner forms of power as RE technology prices drop fast. What else can we do to convince many Filipinos that RE is the key to sustainable and cheap energy?

References:

 https://www.cnet.com/news/renewable-energy-solar-wind-lures-us-big-businesses/

 https://www.weforum.org/agenda/2018/04/microsoft-just-signed-the-largest-corporate-solar-agreement-in-us-history/

 ACCELERATING CHANGE: how corporate users are transforming the renewable energy market. RE 100 Annual Report 2017

 

 

Hampering Our Growth

Southeast Asian countries are at different stages of economic development and will have higher demand for energy. In fact, according to the Global Energy & CO2 Status Report published by the International Energy Agency or IEA, Southeast Asia (SEA) accounted for eight percent of global energy growth last 2017.

An earlier report released by the same agency, the Southeast Asia Energy Outlook 2017  revealed that the region’s energy demand is likely to grow by roughly two thirds and account for a tenth of the world demand by 2040. Installed capacity is set to increase from 240 GW in 2017 to 565 GW by 2040 with coal accounting for  40 percent of the growth. This will push Southeast Asia to become a major importer of fossil fuels by 2040. The IEA predicts that the region’s annual net import bill will be over $300 billion, which is equivalent to four percent of the SEA’s total gross domestic product.

The IEA, however stressed that the region can still avoid incurring such a huge net import amount if governments implement policies that will reduce the demand for energy and increasing the use of renewables. Based on IEA’s estimates, Southeast Asia can lower the import bill by $180 billion if  the region increases Renewable Energy’s share in the mix by 20 percent.

The agency stressed that the increasing energy demand both pose as a challenge and an opportunity as governments can opt to go for affordable policy and technology options. ” The rapidly declining cost of wind and solar PV provides an opportunity to help meet growing electricity demand in a cost-effective and sustainable manner  while also helping spur local manufacturing industries.”

IEA also noted that attracting investments in RE will be crucial to meet the region’s energy requirements as Southeast Asia will need some $2.7 trillion to $2.9 trillion in investments by 2040.

For his part, International Renewable Energy Agency or IRENA director-general Adnan Z Amin noted that Southeast Asian countries should do a better job in attracting higher investments for RE development.

He stressed that despite the falling costs of RE technologies around the world, financing for RE in SEA countries remain a challenge given the lack of clear policy and regulatory frameworks for investors. He urges SEA countries’ leaders and regulators to come up with clear and reliable long-term policies to attract financing for the sector: “Basically what we’re lacking right now is a sense of government resolve and a sense of adequate, reliable policy framework that allows the private sector to come in…The market opportunity has to be created by policy and regulations.”

 

eco business

Southeast Asia can save $180 billion if more renewables are used by 2040. Photo c/o www.eco-business.com

 

Unfortunately, the observation of the IRENA president reflects the state of our policies and regulatory environment of the energy sector in the Philippines. The regulations here in the country are far from friendly to RE developers and do scare potential investors.

For one, the foreign ownership restriction in our constitution prevents investors from coming in to help us build more RE plants. As I have suggested in the past, it is time for us to consider allowing foreign investors to provide the equipment and technologies needed convert our resources into power while limiting their ownership on the natural resources. After all,  building RE power plants is an expensive undertaking and there are very few local businessmen who can afford to develop RE.

Aside from our problem in the foreign ownership, our regulators and even some of the players in the sector fail to realize the importance of renewables on the economy.  As I have been discussing thoroughly in this blog, we need to realize that the concept of least cost– where we only look at the upfront cost of building our power plants– hinders RE from becoming mainstream in the country.

We seem to forget that the risks of foreign exchange fluctuations, global fossil fuel prices and other market conditions will cost us more in the future. Our country cannot fully realize the benefits of RE unless we appreciate  the crucial role it plays in ensuring both energy security and equity. This is unfortunate for us as our country has been blessed with natural resources we can tap to help us achieve equitable economic growth.

Plus, the world is heading towards distributed generation and smart grids with the advancement of technology and yet the Philippines still rely on central generation. Unfortunately, we still lack rules on distributed generation and remain focused on distribution monopoly controlling the development of embedded generation. This hampers the development of RE.

Our government should pave the way for a more flexible design of a distribution system that can immediately supply the power demands and at the same time deliver the preferred sources of power to the customers.  Our distribution companies should have intelligent systems capable of accommodating renewable energy sources. We need to take a good look at our distribution system and make some drastic changes if we are serious in our desire to bring more renewables in our energy mix.

These are just are some of the problematic  issues that the sector needs to address and there are more.  Around the world, developments are taking place to accommodate greater use RE, and unless our country and regulators are able to address the myriad of problems hounding the energy and hampering more investments in renewable development, then the Philippines will surely be left behind by the rest of the world.

References:

Southeast Asia Energy Outlook 2017: https://www.iea.org/southeastasia/

Global Energy & CO2 Status Report
The latest trends in energy and emissions in 2017:https://www.iea.org/geco/

https://www.businesstimes.com.sg/asean-business/clear-reliable-policy-direction-in-asean-needed-to-attract-renewables-investment

A More Cost Effective Alternative

Even before he assumed office, US President Donald Trump vowed to bring back jobs to the coal sector. Shortly, after elections, he signed an executive order to overturn the Clean Power Plan to revive the coal industry.

However, it seems like his efforts did not stop US utilities from shutting down coal-fired plants. Last year, 27-coal-fired plants with a combined 22 gigawatts (GW) capacity were announced for closure and early this year, energy companies have said that that they will close down at least five coal plants with more than a 1000 GW total capacity.

These announcements of closure are not surprising. Coal generation in the US has declined by 28 percent from 2012 to 2015 as more energy companies realized that shifting to Renewable Energy (RE) is the most cost-effective solution in bringing down power rates. In fact, several US utility companies are set to retire their coal plants and replace them with RE ones.

For example, the Public Service Company of New Mexico (PNM), the largest energy company in New Mexico, which boasts of roughly half a million customers will start retiring coal by the year 2022. PNM, which generated approximately 56 percent of its power from coal in 2015 will begin shutting down coal plants as it plans to produce all its power from solar energy, natural gas and even wind power in a bid to improve their financials and lower rates.

PNM’s Integrated Resource plan for 2017-2023 released April last year concluded that phasing out coal completely was the best way for the firm to match the demand for power with the lowest cost in the coming years. According to PNM’s estimates, the company’s most cost-effective portfolio is to increase the use of renewables to 36 percent and 33 percent from natural gas by 2035 from 11% and 6% respectively in 2017.

Similarly, Wisconsin’s largest utility, We Energies decided to shut down its 1.2 GW Pleasant Prairie coal plant this year. The energy company with its 2.2 million customers, sourced 50.6 percent of its capacity from coal in 2015 and will replace a portion of the size with its 350 MW solar power plant by 2020.

Likewise, in Texas, Luminant, an energy firm that supplies some 18 GW of power has decided to close its 1.8 GW Monticello power plant in January as well as two other coal plants with a combined generation company of 2.3 GW and will replace the lost capacities from coal plants with wind power. So far, the firm can generate 21 GW of wind power and additional 14-27 GW solar power by the year 2030.

These are just some of the major utilities in the US that are now moving away from coal and shift to cleaner forms of energy, and there are more. After all, contrary to those opposed to RE, it is possible to go 100 percent renewables.

We do not have to look far to see such an example. Recently, the local government of Guimaras, the small island province in the Visayas announced its “Guimaras 100% Coal Free Declaration,” a ban on coal-fired plants in the province. In his speech, Guimaras Governor Samuel Gumarin said that “The people of Guimaras have embraced renewables over dirty, polluting energy. We want to show that a sustainable-development path, powered by renewable energy, is not only possible but more viable.”

guimaras

Windmills in Guimaras. The province declared a complete ban on coal power. Photo c/o http://www.evwind.es

 

Guimaras is not the only province in the country that favors RE. Last March, the Bohol local government through its Bohol Energy Development Advisory Group or BEDAG has decided to prevent the building of new coal plants in the province. In a statement, the BEDAG said: “the BEDAG and the entire Provincial Government of Bohol are fully intent on maintaining the sanctity and pristine condition of the environment.”

The development came after the provincial government via an SP ordinance has declared environmental impact as the most important consideration for the selection process for interested energy developers as part of the province’s energy development program. The provincial government will institutionalize its “No Coal” stand through an ordinance.

The above examples only show that it is possible to shift from coal power to cleaner energy. Unfortunately, while others are already shutting down coal-fired plants to lower energy costs, we in the Philippines are busy building them since 90 percent of the roughly 7300 MW capacity approved or already for construction by the Energy Department are coal-fired power plants. This despite calls from experts, world and business leaders to work extra hard to make the shift to greener forms of energy possible.

I wonder how long and what will it take to convince others that RE is the practical choice for all of us.

References:
https://www.forbes.com/sites/energyinnovation/2017/05/18/embracing-the-coal-closure-trend-economic-solutions-for-utilities-facing-a-crossroads/#1f05af1b1c99
http://www.iloilotoday.com/2018/02/guimaras-declares-coal-free-receives.html

http://www.boholchronicle.com.ph/2018/04/02/govt-blinks-no-to-coal-power-in-bohol/

Everyone Is Reaping The Benefits of Lower RE Prices, But What About Us?

The International Renewable Energy Agency (IRENA) says that all renewable energy technologies will be at par with fossil fuel costs by the year 2020.

In its report, Renewable Power Generation Costs in 2017, the organization noted the significant drop of prices from 2010 for both solar photovoltaic (PV) power, which dropped by 73 percent and onshore wind by 23 percent.

At present, onshore wind power average cost is at $0.06 per kilowatt-hour (kWh) while solar is to $0.10. These amounts are close to the cost of electricity generation from fossil fuels, which is somewhere between $0.05 to $0.17 per kWh.

The study predicts that solar prices will trim down by as much as 50 percent by 2020 and that in the next couple of years, both RE technologies are likely to cost $0.30 per kWh.

For the director general of IRENA, these falling costs are an indication that significant changes are about to sweep the energy sector: “These cost declines across technologies are unprecedented and representative of the degree to which renewable energy is disrupting the global energy system,” he noted.

The report also stresses that soon the RE sector will flourish even without subsidies and will continue to do so with the proper government support: “Already today, and increasingly in the future, many renewable power generation projects can undercut fossil fuel-fired electricity generation, without financial support. With the right regulatory and institutional frameworks in place, their competitiveness should only further improve.”

 

solar prices

Solar prices will trim down by half by 2020. Photo c/o http://www.wsj.com

 

Fortunately for the Philippines, we have access to plenty of sunlight. In fact, one study showed that the country could generate as much as 16.17 watts per square meter of solar power. However, our regulatory framework and support for the RE sector are weak. This means we cannot hope to lower down the costs of our renewables unlike what is happening in other countries.

We have to keep in mind that traditional sources of energy continue to dominate our energy mix and will continue to do so in the next 10 years. A BMI Report said that the share of coal is likely to increase by 10 percent over the decade, “The share of coal [is]actually increasing over our 10-year forecast period—from just under 50 percent in 2017 to over 55 percent by 2027,” BMI noted.

The Fitch-owned BMI also sees that RE will contribute around 20 percent of the total power mix in 2020 and a decrease to 16 percent in 2027.

Now, those figures are alarming since the above numbers do not reflect our government’s commitment to shifting to greater use of renewables, to as much as a third of the power mix. This is a point stressed even by BMI: “However the country has released few details on how they intend to reach its target, particularly given the dominance of coal in the project pipeline,”

So, while other countries around the world are enjoying lower costs of power because of RE, the Philippines is not only being left behind but will also have to endure the complete opposite of lower costs of energy: the higher cost of power.

As I have been saying again and again in this blog, our dependence on traditional sources of power comes at a high cost because we import our raw materials, particularly coal from other countries.

The BMI estimates that the Philippines imports around 75 percent of its coal supply from Australia and Indonesia. We pay for these imports in dollars.

Let us not forget that experts predict that the Philippine Peso will be the worst performing currency in Asia this year. The head of trading for the Asia Pacific at Oanda Corp. in Singapore, Stephen Innes even described the Philippine peso as “ the local whipping boy in the region.” Just in the middle of February, the Philippine Peso hit an 11-year low as it fell to P52.12 against the United States dollar.

And as the peso falls against the dollar, we can expect higher power rates. Last February, the biggest power distributor in the country, Meralco has announced a rate hike of P1.08 per kilowatt hour (kWh). This means that the average household consuming 200 kWh per month will need to shell out additional P216 for their monthly bill for January partly because of the depreciation of the peso against the greenback.

That’s just the problem with relying heavily on coal power plants. The Filipino people end up paying more for their power consumption for things beyond their control such as the peso depreciation or increase of costs of imported coal because these two are passed on costs to consumers. We could help alleviate the plight of the Filipino consumers if we can tap our natural resources and rely heavily on them for our energy needs instead.

It is ironic and sad that the Philippines, a country that has natural resources available for more development and use of RE, has to rely on imported coal for our energy needs. Clearly, something must be done about it to help alleviate the suffering of Filipino consumers.

References:

Renewable Power Generation Costs in 2017, IRENA

http://www.manilatimes.net/coal-top-55-ph-power-mix-2027/377594/

https://www.rappler.com/business/196059-philippine-peso-weakest-p52-us-dollar

http://www.manilatimes.net/meralco-hike-rates-p1-08-kwh-feb/378957/

https://www.bloomberg.com/news/articles/2017-12-21/philippine-peso-seen-as-asia-s-laggard-for-2018-as-deficit-grows

 

The Path to 100

Just recently, the International Renewable Energy Agency (IRENA) released a study titled “Accelerating the Deployment of Renewable Energy Mini-Grids for Off-Grid Electrification.” The research tackled how the Philippines can promote better access to basic electricity services as the government works on achieving total electrification in the country.

The study came up with five major recommendations ranging from defining roles and responsibilities, having a strategic and comprehensive planning for electrification, promoting the setting up of micro-grids, reviewing the regulatory frameworks for mini-grid projects and increasing support for project development and execution.

Of these recommendations, several caught my attention.

10891-cobardor-island-solar-panels-lines-wide-angle

Our government must now seriously consider using RE for off-grid islands. Photo c/o ADB

IRENA, in its conclusion, stressed that the country needs to prepare a definite plan for off-grid electrification, with the government revising the current Missionary Electrification Development Plan “to focus on reliable energy electricity access to small, remote and isolated areas.” Part of which is to aim for a 24-hour electricity service that can support both commercial and industrial needs to enhance livelihood opportunities to increase incomes.

The report noted that such goal could be achieved by “strategically using renewable energy technologies (RETs), selected based on a least-cost approach to lower generation costs, improve reliability, increase service hours and avoid the use of fossil fuels.”

The reason for prioritizing RE for small and remote off-grid areas was underscored: “These technologies can reduce generation costs and increase service reliability and service hours, while simultaneously mitigating climate change and improving climate resiliency.”

Now, don’t these conclusions and recommendations of advocating the use of RE Technologies for off-grid islands by the IRENA sound familiar? I have been in fact, advocating almost the same recommendations and conclusions above.
For one, as I have been saying, renewables are the cheaper option as generation costs from them are not subject to global price changes and foreign exchange adjustments. On the other hand, traditional sources of power cause consumers to pay higher when the peso falls against the greenback or when prices of coal or oil surge in the world market.

Plus, of course, RE is obviously the better option to use to mitigate the effects of climate change.

But I’m not the only one who echo the calls made by the IRENA report. There are other reputable organization, too that are calling out our government to transition to RE for our energy needs.

For example, The Energy Economics and Financial Analysis (IEEFA) and Institute for Climate and Sustainable Cities (ICSC) earlier this year released a study emphasizing the need for RETs in off-grid islands. The research, “Electricity-Sector Opportunities in the Philippines: The Case for Wind- and Solar-Powered Small Island Grids” noted that “Small island grids powered by solar, wind, and other renewable energy could reduce dependence on expensive imported fossil fuel generation without compromising the availability of power and grid reliability.” In fact, the country can save up to Php10 billion if off-grid islands use RE rather than traditional power sources.

The report stressed that off-grid islands in the country could transition away from fossil-fuels to RE except for the country’s policies and regulations, which are already outdated: “Barriers to small island grid uptake of modern renewable energy power include outdated regulations that have not kept up with technology.”

Time and time again, we have heard experts urge our government to invest in RETs for stable and secure supply both for those in the main grid supply as well as for off-grid islands especially since our government aims to achieve 90% household electrification by the end of this year.

As of July 2016, household electrification rate is at 89.6%, which means some 2.36 million homes are either without power or with limited electricity services of four to six hours daily. Such is still far from our government’s goal “that every Filipino family shall have an equal opportunity to access basic electricity service.”

There is no doubt, as many experts suggest, that the path to complete electrification is RE. But I will have to stress that RE can do more than just help us achieve our goal of 100 percent electrification. In fact, renewables are the long-term solution needed for our country’s energy security. And the sooner we learn how to implement RE systems, the more secure our future will be.

References:

Electricity-Sector Opportunities in the Philippines: The Case for Wind- and Solar-Powered Small Island Grids

“Accelerating the Deployment of Renewable Energy Mini-Grids for Off-Grid Electrification.” IRENA

 

 

 

 

 

Getting Closer to The Tipping Point

There have been various predictions on how and when renewable energy will soon displace coal as the most economical choice for the world’s power needs.

Just recently, Bloomberg New Energy Finance Michael Liebrich founder joined energy experts in saying that the time for renewables to take over will soon come. He estimated that renewable energy would gather roughly 86 percent of some $10.2 trillion investments in power generation by the year 2040.

His predictions do not end there. Liebrich further identified two tipping points that will push coal prices and natural gas to become unattractive.

 The first tipping point is “when new wind and solar become cheaper than anything else,” Liebreich said. And this may happen soon. He predicts that it will start by 2025 when it is cheaper to build a Solar PV plant than a coal-powered plant in Japan. Similarly, construction of wind power plants will be less expensive than building coal plants in India by the year 2030.

 The second tipping point, he says, is when operating the present coal and gas plants becomes more expensive than getting energy from wind and solar. This tipping point may take longer than the first and may happen first in Germany and China sometime between 2030 to 2040.

With all these forecasts or predictions, there is no denying that renewables will be the most economical source of energy all over the world.

 It is then crucial for us to seriously consider capitalizing on the price drops of these RE technologies and move fast in transitioning to heavy dependence on coal to renewable energy.

 Aside from being the cleaner form of energy, it is also essential for us to shift to RE because continued dependence on coal and other forms of fossil-fuel will hurt the pockets of our power consumers badly in the future.

 The above predictions only say that RE will be the cheapest option due to the declining cost of RE technology. However, there is another reason why coal will be more expensive for us Filipinos.

 As renewables take over, we can expect that coal and other similar fossil-based technologies will find it hard to acquire financing for their projects. With the growing clamor for greener technologies, it is likely that financial institutions will institute policies that avoid fuel technologies. Plus, of course, the declining costs of RE will make coal less competitive thus, pushing banks to lend–assuming they will– at significantly shorter maturity. The natural consequence is higher annuities. So, it is safe to say that around the world the cost of coal and other fossil fuels would sky-rocket.

We have to keep in mind that the Philippines only produces low-quality coal and our coal-fired plants are constructed for imported coal. In fact, in 2016, the Philippines imported a total of 20.79 million tons of coal, which is 47.8 percent higher than the imported figure in 2015. And a nation that depends heavily on imported coal will surely suffer from expensive power rates in the years to come as coal becomes more expensive in the world market.

 It is indeed time for our regulators and policy-makers to see the writing on the wall. Coal will be more expensive in the future, and our power consumers will pay much higher if we don’t shift our allegiance to RE.

 Our regulars have to act now. Otherwise, we will be paying more for our energy consumption, when in fact, cheaper energy has been abundant and available for us for a long time.

 Reference:

 https://www.rappler.com/views/imho/172064-sun-setting-coal

 https://www.bloomberg.com/news/articles/2017-09-19/tipping-point-seen-for-clean-energy-as-monster-turbines-arrive

Are We Getting Any Closer? Revisiting our Foreign Ownership Rules

IMG_0008

Changing our constitution to allow  more foreign investors is a must if we are to succeed in developing our nation. Hence, we must be fast  in doing so if we are to take advantage of the global development in RE including falling prices.

As early as last year, President Rodrigo Duterte already announced his plans to open various industries to foreign players.

In a speech made during a visit to New Zealand last year, the president said “The only way to make this country move faster to benefit the poor is really to open up the communications, the airwaves and the entire energy sector. My decision now is to open the Philippine economy to other players.

These days, foreign ownership of companies is in the headlines as the government is set to release the upcoming Foreign Investment Negative List ( FINL). The FINL defines which investment areas of the country are still off-limits to foreign investments and open to 40%  foreign ownership. 

Unfortunately, the government can only do so much with its FINL as they need to work within what’s allowed by our constitution.  Perhaps it’s also time to make amendments to the constitution given that times have changed. In this day and age of technology, we need to be more competitive. Unfortunately for us, our laws have not been updated to keep up with the times.

Many economists have already stressed the need for significant changes in our constitutional provisions on ownership

Just recently, former National Economic Development Authority or NEDA chief Cielito Habito has emphasized the need for these changes. “The hope is we will be willing to amend economic provisions of the constitution because that is what really is holding us back. It is outdated. Many of the restrictions in foreign advertising, mass media, education, are really out of date. Given the technology in recent years, those rationales don’t apply anymore to the information age,” he said.  

He further added that we are being left behind by our Southeast Asian neighbors because of the lack of participation of foreign investors. “The reason we continue we to  lag behind our neighbors, in spite of dramatic improvements already made, is still because of these legal constraints to more foreign participation in our industries.”  

The President back then said that he wants changes in the “regulatory requirement and institutional arrangements to hasten the entry of new players in the power industry and energy sector.

And I cannot wait for these changes to take place. We need this if we are determined to shift to cleaner sources of energy. Our progress in moving to more renewables for our energy has been quite slow. We are not getting any closer to our goal of using more RE for our needs. In fact, we seem to be heading in an opposite direction as coal fired power plants are seen to dominate our energy mix in the next 10 years as noted by BMI Research of the Fitch Group. The study revealed that 90% of the 7,300 MW of power projects in the pipeline are coal-fired plants. 

As I have been saying, the review of foreign ownership rules has been long overdue.  I have been vocal in my desire to open up the energy sector to more foreign investors, particularly the renewable energy sector. Mainly because putting up the RE plant has a high up-front cost and as such very few businesses can venture into this area. 

The government must consider limiting the ownership of foreigners of the renewable resources but increasing their ownership in owning the equipment required to convert these resources. 

Around the world costs of RE technologies are dropping. If we want to take advantage of this development in the hope of increasing the RE’s share in our energy mix, then we must act quickly and make the necessary changes in the foreign ownership rules. 

References:

http://www.investphilippines.info/arangkada/constitutional-amendments-needed-to-boost-fdi/

http://bworldonline.com/constitutional-amendments-needed-boost-fdi/