RE policies seen to pull down power rates, carbon footprint

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QUICK READ: Through the Green Energy Option Program, big businesses can now source power for their day-to-day operations through Energy Development Corporation’s BacMan Geothermal, Inc.



Eligible businesses and institutions can now take a stand for the environment and lower their carbon footprint by getting power directly from licensed Green Energy Option Program providers like EDC’s BacMan Geothermal, Inc.


Since the implementation of the Renewable Energy (RE) Act in 2008, the government has been pushing the private sector to further explore and develop cleaner energy sources in the country.


This aims to reduce our dependence on imported fossil fuels to minimize exposure to price fluctuations in the world markets.


Where we are

More than a decade after the enactment of the RE Act, the total installed capacity of all power plants in the country jumped 68 percent from 15,610 megawatts (MW) in 2009 to 26,286 MW in 2020. The combined share of RE power plants composed of geothermal, hydro, biomass, solar, and wind projects went up by 44 percent to 7,653 MW from 5,309 MW.


However, coal remains to be the biggest fuel source with a total installed generation of 4,277 MW in 2009 jumping by 155 percent to 10,944 MW in 2020.


In 2009, RE’s total contribution to the power mix was equivalent to 34 percent but dropped to 29 percent in 2020 while coal’s share in the power mix in 2009 was at 27 percent leaping to almost 42 percent in 2020.



With the country’s improving growth trajectory and strong projected power demands, the macroeconomic conditions are favorable for the development of more renewable energy projects in the Philippines.


The government introduced several support policies to entice more investors of clean energy sources.


Among them is the feed-in tariff (FIT) which provides power plants with a guaranteed market and offers a guaranteed purchasing price for the energy that they sell to the grid for at least 20 years, provided they complete their projects ahead of other participants as the incentive was patterned like a race.


Another policy is net metering where customers with their own RE installations can sell their excess generation back to their electric distribution utilities that can be paid via an offset to the monthly power bill.


Among the latest RE-focused policies introduced by the government is the Green Energy Auction Program (GEAP), where a special incentive will be introduced and auctioned off based on power plants’ ability to run power either as peaking or mid-merit capacity.


The Renewable Portfolio Standard (RPS) is also a newly- crafted policy that mandates electricity suppliers to source an agreed portion of their total power supply from renewable sources.


The DOE is likewise preparing for the Green Energy Option Program (GEOP) which will institutionalize a mechanism that allows end-users the option to buy electricity only from those who utilize cleaner sources of energy.


GEOP grants customers and businesses the chance to secure lower power rates.


All these policies aim to further promote the use of RE which benefits not just consumers but developers themselves in terms of lower costs and increased potential profits. At the same time, the use of RE helps address climate-related harms caused by power sources with high carbon emissions.


The use of RE also effectively drags down power rates as companies can choose indigenous RE sources over traditional baseload power and thus lessen reliance on imported fuel whose price is dictated by fluctuations in the international market movements and currency exchanges.


Full steam ahead

Interestingly, geothermal power producers are seen to have an advantage over other RE sources under GEOP as the resource can run and provide electricity for 24 hours a day and is not reliant on intermittent fuel such as wind, sunlight, and water.


As a result, the government is pushing for further development in this sector when it allowed 100 percent foreign ownership for geothermal exploration, development, and utilization projects with an initial investment cost of about $50 million capitalization through Financial and Technical Assistance Agreements (FTAAs) between foreign contractors and the Philippine government for the large-scale exploration, development, and utilization of natural resources and are signed by the President.


The Philippines used to have the second-biggest geothermal capacity in the world next to the United States but has been overtaken by Indonesia in recent years.


As of end-2020, the total installed capacity of geothermal projects in the Philippines reached 1,928 MW equivalent to 7 percent of the power mix with total power production at 10,757 gigawatt hours or almost 11 percent of the entire power produced in the country.


Leading the way

The Energy Development Corp. (EDC), the country’s biggest producer of geothermal energy, has secured a GEOP license to provide electricity to consumers with at least 100 kilowatts of average monthly electricity consumption once the DOE fully implements the program.


Companies are urged by the government to secure power supply from cleaner sources via GEOP to not just generate savings but more importantly, to reduce their carbon footprints and help in fighting climate change aside from establishing their brands as a model for sustainability. Through such mechanisms, GEOP aims to significantly contribute to energy sustainability and promote further competition in the electricity sector.


EDC also emphasized that GEOP will empower the needed collaborative effort between companies, organizations, and individuals for inclusive growth and environmental restoration as the problem of climate change and its manifestations are expected to worsen if no immediate actions are made.


Way forward

Federico Lopez, EDC chairman and CEO, pointed to the urgency of addressing the climate change problem, saying this requires “paradigm shifts” both in business and lifestyle as the energy sector contributes a lot to global warming and climate change.


“All of us need to go beyond incremental sustainability and transform into regenerative forces that align our profit engines with the need for a better world and a safer planet,” Lopez said.

In anticipation of an expanded role in RE, EDC is pursuing a program that will develop new hydro, solar, and wind power plants in the country as well as geothermal facilities not only in the Philippines but also overseas.


EDC is the country’s biggest 100-percent RE company with an installed capacity of 1,500 MW of clean and renewable energy.


The Energy Development Corporation (EDC) is a pioneer in generating 100% clean, renewable, and reliable power as an electricity supplier in the Philippines for over 40 years. With power plants all over Visayas and Mindanao, the company is one of the biggest producers of geothermal energy in Asia and is expanding its reach in the international market, allowing it to offer customers affordable energy rates. EDC also strives to provide the best customer service it can to all its clients by having helpful salespeople and easy to understand contracts. Because of all of this, it is poised to become the premier supplier of electricity for the Philippines’ Green Energy Option Program. EDC takes its mission as a renewable energy provider seriously and goes beyond sustainability by investing in programs that enhance the environment and empower its partner communities, thereby fostering regenerative development. The company has also been working toward being carbon-neutral by improving its energy efficiency, as well as implementing various greening projects to ensure that its mission to provide future generations with a better life remains intact.