Energy potentials and FPIC

HAPPY WEEKEND

BY Gina Dizon

BONTOC, MOUNTAIN  PROVINCE – Mountain Province along with other provinces of the Cordillera with its rich renewable energy sources comes as an attractive potential of energy reserve waiting to be tapped in the midst of power fluctuations hitting the Province anytime  of the day, and severe power crisis  by 2016 as noted by energy expert  Professor Rowaldo del Mundo of the University of the Philippines due to lack of power plants commissioned by power distributors in the country.     

Renewable  hydropower  potentials of  3,587 megawatts in the Cordillera  add up to  27 percent of the country’s energy potential with  392 MW  in  Mountain Province composing  297 MW of hydro, 80 MW of geothermal and 15 MW of wind capacity, Rimando pointed out in her talk, potentials of energy generation in the Cordillera focus Mountain Province, during the  energy forum here last July 8.

Rimando forwarded that the Cordillera Energy Producer Master Plan aims to harness mini and micro hydro projects with local power corporations with the local government units, electric cooperatives, the private sector and host communities as incorporators and experienced power developers.

Of  the 297 hydropower potential in Mountain Province spread out in the 10 towns of the Province with Sadanga practically posing a 237 MW reservoir potential.

To date, the national Hedcor energy company is currently constructing a 14 megawatt hydro power in Sabangan operational by 2015.

The Bimaka Renewable Energy Development Corporation (BREDCO), a local company composed of mostly from Besao proposed an accumulated 20.9 megawatt capacity to be constructed along the Layugan River.

Rimando  said that of the 3,587 megawatt potential hydropower of the Cordillera, Apayao has the biggest potential of   1,327 MW followed by Abra at 671 MW, Kalinga of 601 MW, Benguet of 534 MW, Mountain Province of 297 MW, and Ifugao of 154 MW.

Wind power is estimated at 100 to 600 watt per square meter with Mountain Province along the Sagada-Besao boundary at 15 megawatts.

There are currently 15 power plants actively operating in the region with a totalled installed capacity of 337 MW providing 13.7 percent of the Luzon’s grid hydropower generation. Fourteen plants are   found in Benguet with 12 operated by Hedcor, two by SNAP-Aboitiz, and one in KianganIfugao operated by the Ifugao Provincial Government.

Seventeen  proposed hydropower projects for exploration  with a total potential of 56.7 megawatts  or 14.4 % of the energy potential 0f  the Province were approved for  exploration by the Department of Energy.  

These form part of the Department of Energy’s  approved various renewable energy developers to generate 633.5 megawatts  of electricity which will make its way to the country's power mix  in 2014.

Hydropower energy projects are proposed along the Kadipo River in Bauko by KadipoBauko Hydropower with a capacity of 5.2 MW, along the Tanudan River in Barlig by AsiaPac Green Renewable Energy with 2.5 MW, by the Bimaka Renewable energy Corporation of an accumulated 20.9 MW located in a series of 6 mini dams along the Layugan river in Besao, 10 MW by Asia Pac in Natonin along the Siffu River. 

A capacity of 1.2 MW along the Pantor River in Natonin and .80 MW along the Malig River in Paracelis are proposed by Southeast Asia Renewable Corporation including 7.2 MW in Tadian along the Mabungo and Malecom rivers proposed by the same company. Also in Tadian is a 2 MW potential proposed along the Dicapan River.

In the midst of energy  investors aggressively proposing energy projects in different part of the Cordillera comes the requirement of a free prior and informed consent (FPIC) before any project is  constructed in a community.

Bontoc Mayor  Franklin Odsey  in his closing remarks during the energy forum  forwarded that while welcoming development introduced in communities said FPIC is an indispensable requirement to answer queries and note consent or no consent of the affected people before a project is constructed in any part of their respective localities.      

xxx

A power crisis by 2016  and the lack of  power plants as noted by Prof del Mundo comes as an invitation for energy investors to establish new power projects in the country. The feed in tarrif (FIT) provision of the energy law of  2008 comes as an attractive offer to investors from other countries.  

As it is, the DOE - approved FIT rates are P5.90 per kilowatt hour for hydro; biomass at P6.63/kWh; wind at  P8.53/kWh; and solar at P9.68/kWh.

The FIT rates ensure that  RE developers earn and recover their expenses within 20 years and paid by the energy consumer in a nationwide scheme. This means an additional cost to the electricity  bill. DOE computes adding less than two centavos to the electric bill.  

RE developers while they are assured of the recovery of their capital  also enjoy income tax holidays for 7 years and then when that's finished, they pay an income tax rate of only 10%. If they procure technologies from abroad, they get duty-free importation for 10 years.

They are also entitled to carbon credits. But are communities sharing in the carbon credits was the question posed by Gwen Longid of Nordis during said forum.

Hedcor  assistant  vice president for   communications and   regulatory affairs  Darlene  Arguelles  said  carbon credits  are not yet availed of by Hedcor  saying that the process is too tedious in applying for  carbon offsets and renewable energy certificates (RECs).  Carbon credits specially form part of the benefits that energy corporations get in their renewable energy generation projects.

RECs help companies meet corporate sustainability goals for reducing their carbons. Each REC is equivalent to a single megawatt-hour of electricity generated by a renewable energy source such as solar or wind power.

With  attractive  offers to energy investors where mostly are foreign companies with big money, equally comes as a fresh challenge to local companies to invest in this enticing  industry already started by some local companies including BREDCO.

Finance is the big question needed by this equally big billion peso-capital industry. Engineering consultant  DavidTauli forwarded that this non-recourse projects where LGUs  embark with private energy developers makes  loans incurred  to be paid by revenues from the project.

Energy  developers are coming in big time in the Province and it is up to targeted communities  to  accommodate them or not. The important thing is that  communities are informed of what the project is all about, what disadvantages it can bring and what benefits they can get. And if they like the project  weighing the advantages and disadvantages, what arrangements will they enter in and fully  benefit and justly from  their own resources in an industry needed in the 21st century and onwards, that is electric energy.