V. 2.7 Hydro Systems

2.7 Hydro Systems (see also Micro-Hydro)

2.7.1 Micro-hydro Systems

Micro-hydro systems are those with a capacity lesser than 100 kW. At present, there are 68 units of micro-hydro systems installed, generating an aggregate capacity of 233 kW, benefiting about 6,000 households. These systems are primarily utilized for decentralized applications.

The development cost of micro-hydro systems range from $3,000 to $6,000 per kilowatt. Micro-hydro systems are justifiable for remote, decentralized power application. There are about 436 potential micro-hydro sites all over the country with an estimated capacity to generate around 28 MW.

However, further activities that need to be undertaken shall include: in-depth studies on the potential of micro-hydro systems and site identification and assessment of socio-economic and environmental aspects. Currently, there are no specific incentives or privileges being granted by the government for micro-hydro activities.

3. INCENTIVES

The Philippine government has enacted and /or developed various legislative measures that are envisioned to level the playing field for the renewable energy sector in the local energy industry. These statutes would allay many biases against renewables in the local energy business environment such as unfavorable policies for renewable energy, distorted energy pricing and cross-subsidies for conventional energy systems and fuels if not totally removed. The following are the major legislative actions, which are deemed to give renewable energy the desired fair advantage over conventional energy.

EO 462 Enabling private sector participation in the exploration, development, utilization and commercialization of ocean, solar and wind (OSW) energy resources for power generation.

The program is focused on the intensive utilization of ocean, solar and wind energy resources. Tapping of these resources will serve as a means to achieve the goal of converting the Philippines into an energy exporter in the future. Under the program, activities to be undertaken include

a) technology assessment and generation through conduct of feasibility studies for wind power generation, tidal current and wave energy systems,
b) resource assessment on wind energy and ocean energy management,
c) promotion of OSW manufacturing industries through conduct of feasibility studies on the development of solar PV manufacturing and solar energy testing,
d) OSW market development through promotion of ASEAN power grid interconnection, demand side management (DSM) for solar application and OSW promotion and information campaign,
e) manpower development through trainings and seminars and scholarship grants, and
f) establishment of large-scale OSW energy systems.

R. A. 9136 or the Electric Power Industry Reform Act

The passage of Republic Act 9136 or the Electric Power Industry Reform Act is seen to benefit the NRE sector particularly those who would like to engage in large-scale renewable-based power projects.

First, NRE project proponents shall have an open access to the industry and could operate on its own pace without having much problems with regards to stringent process of project approval the industry is currently practicing. The burden of obtaining a Power Purchase Agreement will then be relieved from the NRE proponents. Those who can deliver the best offer shall have all the advantage of getting into business without being bothered by some regulatory policies and procedures being implemented by government dealing with power negotiations.

Second, the Actl proposes the complete unbundling of the electricity tariff rates. The unbundling scheme favors renewables as the removal of subsidies and inclusion of the socio-environmental levies shall reveal the true cost of conventional power rates. Third, the bill that would directly support the NRE industry is the establishment of the Countrywide Electrification and Missionary Service Company (CEMSCO). CEMSCO shall serve as a mechanism in promoting the use of indigenous and renewable energy as well as the energization of marginalized areas. CEMSCO shall be mandated to undertake these programs in a non-profit basis and in a transparent manner to avoid distortions in energy prices. Though initially a government-owned and controlled company, the bill strictly stipulates that CEMSCO shall bring its facilities to commercial viability in an area-to-area and system-by-system basis through privatization in the earliest possible date.

HB 4839 An act to further promote the development, utilization, and commercialization of new and renewable energy (NRE) sources and for other purposes.

The Lower House of the Philippine Congress has introduced House Bill 4839 with the corresponding support from the Department of Energy. The proposed legislation recognizes the need to provide adequate and sustainable energy services to the greater population still living in the country’s unelectrified barangays. Also, it shall give preferences to the development and utilization of NRE resources and technologies in view of its environmental and social objectives. Salient features of the NRE bill are as follows:

• Provision of incentives to NRE power producers
• Requiring private power producers to diversify power generation
• Establishment of green pricing mechanism to encourage consumer-user participation in NRE
• Establishment of NRE Trust Fund to finance various NRE activities
• Encouraging hybrid system installation to increase systems’ reliability

4. DEMAND

In 2000, NRE consumption is estimated at 72.114 MMBFOE. This is projected to increase to 90.124 MMBFOE by 2004. By 2008, biomass shall account for 88.070 MMBFOE or 97.72% percent in the total renewable energy share. Other NRE systems such as solar, micro-hydro and wind, on the other hand, shall provide 0.0114 MMBFOE contribution in 2000 and steadily grow to 2.054 MMBFOE by 2008.