2 more years of ‘policy uncertainty’ for RE investors

By Myrna M. Velasco – October 2, 2017, 7:20 AM

from Manila Bulletin

Local and foreign investors have been batting for clarity and certainty on policy issues in the renewable energy (RE) sector, but the Department of Energy (DOE) had dropped the bombshell that it will take two more years for new set of rules and market mechanisms to be concretized.

At a recent forum, Energy Assistant Director Marissa P. Cerezo told industry players in the Southeast Asian region that the RE market, which will be the key for the operation of the proposed new RE policies, will not be up until 2019.

She said all discussions about the Renewable Portfolio Standards (RPS) and Green Energy Option Program (GEOP) are just preparatory to the setting up of the RE market, and even these she indicated, are still provoking multitudes of questions from various stakeholders.

Former Energy Regulatory Commissioner Rauf Tan, who now sits as a member of the transition committee of the Philippine Electricity Market Corp. (PEMC), confirmed the 2019 implementation timeframe for the RE market, while asserting that public consultations would yet start on this process.

Asked if the RE market will just deal with paper transactions or if there would be physical trading of capacities, Tan noted the “final details shall depend on the feedback” that would be generated from stakeholder consultations.

Aside from the initiatives of very few “brave investors” who are navigating the sector without subsidies or feed-in-tariffs or even without the new set of policies, RE investments in the Philippines, primarily for solar and wind facilities, have thus far come grinding to a halt.

The only other twist being awaited by investors would be a policy pronouncement from Energy Secretary Alfonso G. Cusi as to the final fate of the Feed In Tariff (FIT) system, as this is set for review by his department around yearend.

The DOE is targeting 9,874 megawatts of RE installations by 2030, but given the tough competition for capital it will have to hurdle even in the Asian region, the Philippines might eventually be losing out with two more years of policy vacuum and fickleness confronting investors.

The country is “big on numbers” when it comes to its investment targets, but getting there would be a real tough dilemma for the energy department and its policy collaborator-entity National Renewable Energy Board.

As set on blueprint, the Philippines is targeting to be “the number one wind energy producer in Southeast Asia with an additional 2,345MW capacity,” and is also aiming to be at the top spot for geothermal with target of additional 1,495MW capacity.