In Dasmariñas, Cavite, Filipino-owned Euro-Med Laboratories Philippines Inc. invested P1. 324 billion for the setting up of a fuel cell plant – a move not only expected to help the company itself reduce its dependence on commercial fuels, with the use only of compressed natural gas (CNG) and hydrogen to produce electricity, thereby allowing the company to save about P48 million a year in fuel costs; but is largely expected to help promote environmental solutions in the Philippines, too, since the fuel cell technology (which converts the chemicals hydrogen and oxygen into water, producing electricity in the process) is considered as one of the most environment friendly energy sources available.

Understandably, the Philippine government itself – not just the local government unit (LGU) – cites the pharmaceutical company’s pioneering project, recognizing the “magnitude of the investment” in the project to employ just under 1,000 people by the time it is completed by mid-2010. Thus, also to encourage other investments in the same vein, the Board of Investments (BOI) gave the Euro-Med fiscal incentives for its plant that will generate 400 kilowatts to supply 25% to 30% of the company's average electrical load; just as the Department of Energy (DOE) also assured it will provide not only income tax holiday for six years, and low tariff, but also “non-fiscal incentives to pioneering project in CNG or the natural gas vehicle program for public transport and energy-related projects,” says DOE Secretary Angelo Reyes.

Many of the existing incentives are, actually, mandated by the law.

In the Executive Order (EO) 462, titled Enabling Private Sector Participa-tion in the Exploration, Development, utilization and Commercialization of Ocean, Solar and Wind Energy Re-sources for Power Generation and Oth-er Energy Uses, former Philippine President Fidel V. Ramos acknowledges that “ocean, solar and wind (OSW) energy resources are forces of potential energy which are nonconventional, indigenous renewable, environment-friendly, and of such abundance that could provide the Philippines self-sufficiency in energy and possibly surpluses for export in the future despite high energy demand due to rapid economic growth.” Thus, it is “in the national interest to accelerate the development and utilization of OSW energy resources by enabling private sector participation.”

As such, Ramos mandated that the contractors for the exploration, development and utilization of the OSW energy resources “shall be granted incentives and privileges that are allowed in existing laws; and government will further assist, if necessary, pioneering projects on OSW energy development and commercialization to make them viable.”
Among others, the country has the Republic Act 7156, the Mini-hydroelectric Power Incentives Act, approved in 1991 to provide various tax incentives to private individuals and/or corporations that have efforts to tap the country’s indigenous energy resources. This is mainly to encourage entrepreneurs to facilitate in the development of hydroelectric power facilities thereby helping the government that provides them help, too.

A win-win situation.

The DOE has already noted an increase in the number of permit and contract applications, showing the viability of the hydropower as an alternative resource in the country. Of the 51 existing mini-hydro facilities all over the Philippines, annually generating power around 200 gigawatt-hours (GWh), over 14 of the mini-hydroelectric power players have operating contracts awarded by the DOE, with a combined generating capacity of 45.66 megawatts (MW).

Yet another move is in the promotion of investing in wind farms, especially since according to the US Department of Energy, the Philippines has a 76,000 MW wind potential capacity in an area of 11,000 square kilometers. Going into specifics, the World Wide Fund identifies 28 provinces in Luzon can produce 4,900 MW in 686 wind potential sites; 2,168 MW in 305 possible wind sites in Visayas; and 336 MW in 47 more possible sites in Mindanao. To lure investors to actually take steps to tap these, various financial assistance have been made available, including loan guarantees from the United Nations Development Programme-Global Environment Facility’s (UNDP-GEF) and the Philippine Export and Import Bank (PhilEXIM), and wind energy financing program from the Development Bank of the Philippines.

There are already six wind farm projects in the country, operated by the PNOC-Energy Development Corp. (140 MW facility in the province of Ilocos), UPC Asia (100 MW), Energy Logics (40 to 60 MW), and projects in the provinces of Burgos, Aklan, and Bulalacao.
Since there is no expected slump in the growing need for energy, a continuous growth in tapping renewable energy sources is to be expected, too.

For hydropower, for example, the DOE estimates that an addition of 76.79 MW of capacity are needed for 2008, as cited by the Philippine Energy Plan (1998 to 2008). And as for wind power, the DOE has already been promoting 16 sites ideal for the establishment of wind farms, including in Carmen and Oslob in Cebu; Bago City and Cauayan in Negros Occidental; Allen-Lavesares and Calbayog City in Northern Samar; Siquijor; Pasuquin, Ilocos Norte; Bantay, Ilocos Sur; Bani and Bolinao in Pangasinan; Maconacon, Isabela; Tagaytay, Cavite; San Andres, Quezon; and Mercedes and Daet in Camarines Norte.

Success, however, can only come from public and private sector partnerships.

Already, and seemingly immediately following Euro-Med’s P1. 324 billion investments for a fuel cell plant in Dasmariñas, Cavite, the Cavite Biofuels Producers Inc., in partnership with the Cavite Sugarcane Planters Multi-purpose Cooperative, expressed its own plan to invest P3.3 billion to develop a 125,000 liter-per-day bioethanol distillery in the nearby town of Magallanes. It was, as Reyes says, a welcome development as the country urges energy stakeholders to invest in environment-friendly renewable energy projects like biomass, solar and wind energy, bio-ethanol, and fuel cell plant – a “bold response to the rising oil prices, and the looming adverse effects of climate change,” he ends.

For more information, visit www.doe.gov.ph.