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Financing Renewable EnergyBeyond Micro-Enterprise Financing:
Innovations in Microfinance
Apo View Hotel Davao City
30 July 2010
By: Ronnie N. SargentoDepartment of Energy
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ENERGY SECTOR AGENDA
I. Energy Security Increase indigenous oil and gas reserves development Strengthen and enhance energy efficiency and
conservation program Aggressively develop renewable energy potential
such as geothermal biomass, hydropower, solar, windand ocean energy resources
Increase use of alternative fuels Form strategic alliance with other countries
II.Power Sector Reforms Create a transparent privatization process Create an investment climate attractive to investors
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The 2009 RE Policy Framework Increase RE-based capacity by 100% within the next
10 years (2008-2020) Increase non-power contribution of RE to the energy
mix by 10 MMBFOE in the next ten years
Be the number one geothermal energy producer inthe world (additional 1,070 MW)
Be the number one wind energy producer inSoutheast Asia (additional 515 MW)
Double hydro capacity by 2018 (addl 3,400 MW) Expand contribution of:
biomass 200 MW
solar 30 MW
ocean energy 120 MW
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Moving Towards Accelerated Development
A Quick Look at RE : (2008 2030)
CurrentREactivities4.8%demandgrowth rate
Approval of RE Bill2008
52 3 4
Small capacity REprojects are added to
the grid; big REprojects are in thepipeline
2010
Policy is in place; salient
provision of the law willspur Interest; activities onRE development isexpected to accelerate
1
5-year continuing REproject packaging and
Intensive promotionalactivities
Emergence of ocean
energy projects, e.g.OTEC, wave, marineand tidal
Diversification of REresources; databasepreparation andProject packaging ofemerging technologies
Development
Of ocean energyprojects
2-year development of REdatabase and
enhancement of techlexpertise of REstakeholders
2015 2020 2030
Commercialization
of ocean energyproject options
Double RE capacity (4.8% growth rate)
- 8,072.3 MW capacity available in Luzon
- 2,442.6 MW capacity available in Visayas- 2,963.6 MW capacity available in Mindanao
Optimization ofRE Resources
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Summary of Resources
Geothermal Resource 1,200 MW
Hydropower - 10,500 MW
Wind resources 76,600 MW
Solar Energy untapped vast potential asa tropical country
Ocean energy - 170,000 MW
Biomass (bagasse) total potential of 235.7MW
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The 2009 RE Policy Framework
RESOURCEEXISTINGCAPACITY
08 (MW)
TARGETCapacity
(MW)
TOTAL
in 2030
Investment($Bn/MW)
Geothermal 2,027 1,070 3,097 2.14
Hydro 3,367 3,400 6,767 6.80
Wind 33 515 548 1.29
Solar 5 30 35 0.09
Biomass 57.2 200 268 0.40
Ocean 0 120 120 0.42
Total 5,489.2 5,355 10,835 10.88
USD 2.0 M/MW (Hydro, Geothermal & Biomass)
USD 2.5 M/MW (Wind);USD 3.5 M/MW (solar & ocean);
Source: DOE REPF
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The Impact of the RE LawAs of July 2010
RESOURCE
EXISTINGCAPACITY
2008 (MW)
TARGET
Capacity
2030 (MW)
AwardedContracts
to date
EstimatedCapacity ofthe Contract
Geothermal 2,027 1,070 20 2,388
Hydro 3,367 3,400 122 850
Wind 33 515 44 1,000
Solar 5 30 1 1
Biomass 57.2 200 11 131.9
Ocean 0 120 2 5
Total 5,489.2 5,355 218 4,375.9
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Why RE is key to Development?
Energy Security Power is a vital element for
development;
Reduce oil importation
Philippines is anarchipelagic country;
200,000 MW of
estimated RE potential RE can be develop through
grid and off-grid
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Challenges
Establishments of the following methodology underRA 9513;
Feed-in-Tariff Renewable Portfolio Standards
Financing RE Projects Perceived investment risks are still an issue
Technical Expertise Available to do technical studies Limited engineers and technical consultants to conduct
feasibility studies
Social Acceptability Price Environmental Effects Safety
Sustainability
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How Much is RE?
Type of Plant Investment(in USD per kW)
Generation Cost
(PhP per kWh)
Oil 991 7.8
Mini-hydro 2,000 4.8
Geothermal 2,000 6.4
Biomass 1,900 6.2
Wind 2,000 5.8
Source: CBRED Policy Study - 2003
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Report Card of the DOE
Programs and Accomplishments
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DOE-UNDP Project on Capacity BuildingTHE SIX (6)
COMPONENTS
1. Policy, Planning &InstitutionalCapacity Building
2. Market ServicesInstitutionalization
3. Information andPromotionProgram
4. Delivery &FinancingMechanisms
5. RE TrainingProgram
6. RE Technology
Support Program
BARRIERS TO BE ADDRESSED
Policy, Institutional, Financial, Technical, Market,
Information and TrainingEXPECTED OUTCOMES
Passage of enhanced RE Bill
Implementation of innovative RE programs andactivities
Establishment of sustainable Market Service Center
Accessible and updated RE-related information
Financing windows accessible to project developers
Enhanced capacity of RE sector in policy making,
planning, project implementation, and technologyextension.
Enhanced services to RE end-users.
PROJECT IMPACTS
Increased Utilization of RE from 2002 levels
29.6 MMT Equivalent GHG Emission Reduction
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RA 9513:Renewable Energy Act of 2008
Accelerate the development of the countrys renewable energyresources by providing fiscal and non-fiscal incentives to privatesector investors and equipment manufacturers / suppliers.
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One-Stop-Shop Framework
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Innovative Financing Mechanisms
Introduced fiscal and non-fiscal incentivesthrough RA 9513
Implement CBRED Project
Project Preparatory Fund USD 0.321 Million
Loan Guarantee fund
USD 2.6 MillionMicro-finance Fund
USD 0.536 Million
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The Role of Microfinancing for RE
Decentralized ApplicationCommunal Projects
Barangay, Sitio and Household
ElectrificationEquipment and supply Financing
Technical Services
Livelihood ComponentPrivate Sector initiatives
Own-use
ESCO
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