Leyte, Negros Occidental at forefront of $2-B PH renewables market

The head of a top Asian energy developer and investor is optimistic about the future of renewable energy in the Philippines, valuing investments over the past two years alone at $2 billion (P93 billion).

"In the Philippines we've seen over last couple of years, over 1100 megawatts of renewable energy, just in the wind and solar space installed. That's about $2 billion just flying into what was an industry that didn't exist till three years ago," Equis Funds Group’s chief executive officer David Russell told CNBC in a report Tuesday.

Equis has put its money where its mouth is: it developed the P10-billion, 132.5-megawatt solar plant in Cadiz City, Negros Occidental, the largest in the region, through its solar subsidiary Soleq. It has also invested in other solar, wind, and even bioenergy projects in the country.

However, a local expert insisted that $2 billion is a conservative estimate.

"The Philippine renewables market is worth even more than $2 billion, based on current costs and demand projections. The government and power producers alike would do well to follow the money flowing to clean energy," said Viking Logarta, energy policy advisor of the Institute for Climate and Sustainable Cities.

Both Leyte and Negros Occidental are not just benefiting from all these investments; they are also exporting clean energy to other parts of the country.

Leyte, fully powered by steam and sunshine

The province of Leyte runs entirely on renewable energy. Its governor also proudly shared that it is preparing for more investments by clean energy producers.

“[Typhoon] Yolanda was a product of global warming, and we here in Leyte were among the first major victims of global warming. People are more conscious now of protecting the environment so we are more conscious in promoting renewables,” Gov. Dominic Petilla told GMA News Online in an exclusive interview.

“I was just talking to someone in Manila who wants to come to visit us because they want to put up solar farms. Any investment in Leyte that will come in, which is environment-friendly and anti-global warming, will be welcomed by the local population. We are ready for it,” he added.

The province’s 107,625-hectare geothermal reservation, which spans Ormoc City and the town of Kananga, hosts the Unified Leyte Geothermal Power Plants run by Energy Development Corporation, a Lopez group subsidiary. The 650-megawatt (MW) complex supplies a third of Visayas’ power needs and even exports power to Luzon.

Both of the province’s solar farms were built in recent years. Ormoc City is home to the P2.9-billion, 30-MW facility of Philippine Solar Farm, which was also built by Helios, the Araneta-Soleq tandem behind the Cadiz farm.

The farm, which occupies approximately 45 hectares in Barangay Dolores, has 98,000 panels that can withstand wind speeds of up to 300 kilometers per hour (kph). It was built late in 2014 and inaugurated in July last year. Reports have mentioned plans for expansion of another 30 MW.

The Ormoc facility also recently qualified for the P9.68 per kilowatt-hour feed-in tariff (FIT) rate, a scheme of financial incentives for clean energy producers ushered in by the Renewable Energy Act of 2008.

“We’re now starting our production of solar energy, hopefully we can have more,” said Ormoc mayor Richard Gomez.

The newer 50-MW solar farm in the town of Palo, on the other hand, boasts of 188,000 solar panels. It can also endure wind speeds of up to 250 kph.

The P4.2-billion, 72-hectare facility is owned by Sulu Electric Power and Light Corporation (SEPALCO) and backed by SAS Sunrise, a subsidiary of the Taiwanese solar firm Sino-American Silicon Products. Its president Frank Huang has been linked to the Buddhist humanitarian group Tzu Chi Foundation, which mobilized in the aftermath of Yolanda.

Construction began last August 2015 and ended last March. It began feeding power into the national grid this April, according to SEPALCO’s administrative manager Joey Clarin.

“We have plans to expand, by about another 30 megawatts, but it would depend on the FIT,” Clarin said.

Negros Occidental, the country’s solar capital

Helios’ 132.5-MW farm in Cadiz is expected to increase the city’s annual revenues by about P45 million per year, said mayor Patrick Escalante. But it is just one of six solar farms in Negros Occidental which have a total generation capacity of 341.5 MW, making the Western Visayas province the Philippines’ center for solar power.

AboitizPower through its subsidiary San Carlos Sun Power (SaCaSun) inaugurated its first ever solar farm in the province last April 19; it previously only invested in coal, hydro, and geothermal. The P4.9-billion, 59-MW SaCaSun farm sits on 75 hectares of land in San Carlos City and has delivered solar power to the grid as early as March.

Citicore Power inaugurated its 25-MW solar farm in Silay City last February. The P2.2-billion project is composed of over 96,000 panels across 43 hectares, constructed by Citicore’s sister company Megawide Construction.

Negros Island Solar Power (Islasol) launched two solar farms early last April – a 48-MW plant in Barangay Sta. Teresa, Manapla town and a 32-MW one in Brgy. Cubay, La Carlota City. Islasol is a joint venture between Bronzeoak Philippines and the Philippine Investment Alliance for Infrastructure (PINAI).

PINAI is a private equity fund set up by Asian Development Bank, Dutch pension fund manager Algemene Pensioen Groep and Macquarie Group, the largest infrastructure fund manager globally. The Government Service Insurance System is also a big investor.

The PINAI fund has also a majority stake in San Carlos Solar Energy, which inaugurated its 45-MW farm back in May 2014. It is composed of about 175,000 panels across 70 hectares of land in San Carlos City.

Negros Occidental also hosts biomass power plants and is planning to develop hydro projects in its six major river systems. — BM, GMA News

Denise M. Fontanilla is the energy policy advocacy consultant of the Institute for Climate and Sustainable Cities, a policy group promoting low-carbon development initiatives in vulnerable countries.