October 7, 2022 | The Philippine Star
MANILA, Philippines — The hike in the country’s renewable portfolio standards (RPS) requirement is seen ushering in new investments as it creates a larger market for the renewable energy (RE) industry, according to Alternergy Holdings Corp.
Alternergy chairman and former energy secretary Vince Perez said that based on the company’s initial estimates, the increase in RPS requirement translates to about 2.65 million megawatt hours (MWh) of RE capacity per year.
This could also mean 1,500 MW of added solar capacity, or 1,000 MW of wind capacity, or 600 MW of run-of-river hydro capacity. “The increase in the mandated RPS requirement will create a massive demand for RE capacity moving forward,” Perez said.
The Department of Energy (DOE) has raised the percentage of the utilization of renewable energy for on-grid areas from one percent to 2.52 percent as part of the administration’s goal of transitioning towards a sustainable and clean energy future. “The increased RPS mandate from one percent to 2.5 percent annual increment will usher in new investments as this ensures a guaranteed market for the RE developers,” Perez said. The RPS is a policy mechanism under Republic Act 9513 or the Renewable Energy Act of 2008 designed to increase the use of renewable energy sources for electricity generation. It requires electricity suppliers, particularly the distribution utilities, to source or produce a specified fraction of their power supply from eligible renewable energy resources.
The market-based policy is also a mechanism designed to provide a guaranteed market for renewable energy.
According to Perez, current geopolitical development across the globe is another driver pushing the growth of the RE industry at a faster pace.
“The Philippines cannot continue being hostage to any jump in the world oil and coal prices,” he said.
“The policy directions being set by the DOE and the new administration to meet the country’s electricity requirements with more and cleaner energy solutions mitigate these risks at the same time ensure a sustainable energy supply for the country,” Perez said.
With robust expansion plans in the next five years, Alternergy aims to develop up to 1,370 MW of additional wind, offshore wind, solar and run of river hydro projects.
Alternergy’s three run-of-river hydro projects are currently under full-swing construction. The company also recently signed a power supply agreement with an electric cooperative for a solar farm project in Central Luzon.
“With our portfolio of renewable energy projects using wind, solar and run-of-river resources, we believe we are in a unique position to take advantage of the growth of the RE sector in the next five years,” Perez said.