Hot air and wind energyFROM

THE STANDS By Domini M. Torrevillas
Publication Date: [Thursday, September 28, 2006]

http://www.philstar.com/philstar/show_content.asp?article=277338

Kudos are in order to the House of Representatives for its speedy action on the Renewable Energy bill, a landmark legislation that places the Philippines among the world’s responsible stakeholders in the climate change campaign.

The move came on the heels of a multisectoral campaign by the Department of Energy, Philippine National Oil Co., Unocal and environmental groups urging lawmakers to rise above partisan interests for a good cause. Following a nationwide signature campaign, 120,000 Filipinos agreed that it’s about time for the country to have cleaner and cheaper energy. Our legislators’ response gives all of us something to smile about.

The Renewable Energy bill provides government incentives for the development and use of renewable energy sources, including hybrid systems. Under the proposed law, companies engaging in indigenous energy development will be exempted from tariff duties and value-added tax on imported machinery and equipment for the first 10 years of their operating contract; tax credit on their domestic capital equipment and services; special realty tax rates on their equipment and machinery; as well as income tax holiday and exemption for the first six years of their commercial operation.

It will all be worth it because the development of renewable energy sources — such as wind, geothermal, biomass, solar and hydropower — will minimize the country’s risk of plunging to an economic crisis due to the price fluctuations in the international markets. We all know how such fluctuations tend to overwhelm us with runaway prices not just at the local pump, but at the supermarkets, shopping malls, restaurants and our neighborhood sari-sari stores as well. Thank God we didn’t feel that pinch too much this year, despite zooming world crude prices at the height of the Middle East crisis two months ago. As they say, "nakaya ng powers natin."

Energy Secretary Raphael Lotilla points out that energy conservation has caught on in the Philippines, which had tempered the impact of the oil price volatility. Our net import bill during the first half increased by only 22 percent because we actually imported less crude, he noted. Lotilla revealed that our average daily consumption of petroleum products has actually been on the decline - from 314,100 barrels during the first half of 2005 to just 284,500 barrels as of June 2006. That’s certainly a long way off from our peak consumption back in 1997, when we were averaging 385,000 barrels per day.

Our increased use of alternative fuels has considerably helped us curb our oil dependence. For instance, biodiesel and bioethanol are available in all gasoline stations of Seaoil and Flying V nationwide, while Shell sells bioethanol in some of its stations in Metro Manila. With the impending legislation of the Renewable Energy bill, we will be closer to the goal of improving our energy mix to a more agreeable 70-30 ratio between indigenous and imported fuel sources. Currently, imported oil accounts for about 40 percent of our energy mix.

It helps, of course, that we have such a rich source of indigenous energy. According to international conservation group World Wildlife Fund (WWF), its PowerSwitch study for the Philippines shows that there’s more than enough renewable energy potential in the country: 1,200 megawatts (MW) for geothermal, 2,308 MW for hydro, 235 MW for biomass and 7,404 MW for wind.

Meanwhile, international environmental group Greenpeace recently indicated that the Philippines can play a leading role in Southeast Asia in wind energy development. According to the Global Wind Energy Outlook 2006 released by the group in Australia recently, we have the highest wind energy potential in Southeast Asia at 70,000 megawatts, which can meet the country’s energy demand seven times over, based on a study by the U.S.-based National Renewable Energy Laboratory. "The (Global Wind Energy Outlook 2006) report firmly places wind power as one of the world’s most important energy sources for the 21st century.

The Philippines has the potential to become a leading player in this field. But this requires political will on the part of the government to set legally binding renewable energy targets in the Renewable Energy bill," Greenpeace climate and energy campaigner Jasper Inventor was quoted to have said when the report was launched.

Greenpeace is urging the government to increase the share of renewable sources in the country’s energy mix to at least 10 percent by 2010, lamenting the current share of less than one percent in the overall mix. It also wants energy policies to overcome institutional and market biases for coal and fossil fuels. Currently, according to Greenpeace, we only have one wind farm of 25 MW, in Bangui, Ilocos Norte. What’s more, according to a recent study done by the University of the Philippines, which was commissioned by the Philippine office of international conservation group World Wildlife Fund (WWF), the country could save up to $2.9 billion from importing less fossil fuel such as coal and oil, if the government would increase the share of indigenous renewable energy in power generation mix to 41 percent.

Our solitary wind farm in Ilocos Norte is actually the first and largest in Southeast Asia, enhancing both the quantity and reliability of power supply in the northern region of the country. The project contributed significantly in reducing our dependence on imported fuel. Not only that, the 25-MW wind project of the Northwind Power Development Corp. recently emerged as the 1st runner-up in the on-grid category of renewable energy project competition for the Asean Energy Awards last August, for its significant environmental and societal contribution to the country.

The project’s emission reduction was the first carbon credit trading in the country under the World Bank Prototype Carbon Fund, through which an Emission Reduction Purchase Agreement was done last December 2004. "It is our hope that the application of energy efficiency concepts, systems and technologies become models not only here in our country but within the Asean region for wider replication and promotion of energy management practices and programs," Lotilla remarked when he lauded the Northwind Power Project’s citation for the Asean Energy Awards.

In citing the speedy political support for the landmark Renewable Energy Bill, WWF-Philippines Climate and Energy Programme acknowledged that the government is now more responsive to the needs of the communities. Which simply proves that sometimes, all that hot air circulating in Congress, when put to good use, can translate into something positive. Now, it’s the Senate’s turn at bat.

My email: dominimt2000@yahoo.com