Renewable Energies Sought in the Philippines and ASEAN

Andreas Klippe*, Associated Business Partner of ECCP, Manila15.05.2010

An information presentation of the East Asian Association, with the subject being the export initiative “Renewable Energy,” with the target area “The Philippines” was held on April 22, 2010, and led by Dr. Stärk from the Federal Ministry for Economics and Technology. In focus was wind, solar, water and biomass energy.

The Philippines are an archipelagic state with 7,107 islands, of which 880 are inhabited. The country can be divided roughly into the northern part, Luzon, with the capital metropolitan region of Manila, the middle region, Visayas, with the second largest metropolitan area, Cebu City, and the southern part of Mindanao.

====>Shortages in the energy supply are already evident in Visaya and in Mindanao. These shortages will be on a dramatic rise in the Manila metropolitan area in 2011 and 2012. In fact, it is too late to effectively counteract the problem. However, there were the intentions by the former government during the administration of President Gloria Macapagal Arroyo to counter the shortages. An investment in renewable energies will be supported. It is to be expected that this trend will be re-intensified with the recently elected government under the probably newly elected President Benigno "Noynoy" Aquino III.It will be vital how wide the current land tenure and the feed-in remuneration investments come into effect in June are supported or hindered. Now, therefore essential stretches of land are already "occupied" by investors, without beginning the implementation of the project for three years as with German land tenure. For German companies it is therefore called itself to hasten and to begin with preparations. It could be very difficult to build its own solar or wind parks otherwise.The Undersecretary of the Renewable Energy Management Bureau of the Department of Energy, Director Mario C. Marasigan, presented the government incentives. With these incentives the renewable energies are very competitive with the “old” energies. In particular, one is lured with long repayment periods of over 50 years. The government PNOC, for example, just worked on 8 large projects for hydropower plants. However, the Philippines need many decentralized power plants to supply energy because of its island regions. Therefore, all available forms of renewable energies must be used.Dipl.-Ing. Herbert Schambeck, chairman of e.terras AG. München, offered information regarding the possibilities of geothermal energy:"The Philippines is the most interesting country in the world with the highest geothermal energy resulting from volcanic sources."

However, e.terras activity is currently confined to Bali in Indonesia. How could we in Europe put geothermal energy in the front of the line? It is difficult to comprehend how no vehement additional efforts for the strengthening of this technology are being made by the European government.

As compared to a gas power plant which cost around 1 million Euro/megawatt, a geothermal power plant is calculated at 5 million Euros per megawatt. However, this is only due to the high capital costs. This is the basic problem. In the Asian way of thinking, long-term planning often is only available for 2 years, eventually 5. But, building times are longer and often longer than legislature terms. The network team should therefore be established and adhere to government winners. Mr. Schambeck, who has represented e.terras AG for quite awhile in Asia, addresses this subject:

„If you don’t have a steady partner for a locale, ethnic and religion,
for law and family affairs,
then your project will go wrong!“

But, as motivation Schambeck also mentions

“that the renewable resources are completely sufficient to cover all of the energy needs for the 600 million inhabitants of Southeast Asia.”

Funding for private companies on the part of DEG Bank or IPEX Bank from the KfW Bank Group is possible. Andreas Ziesmann and Paul Heinemann from the DEG as well as Andreas Thermann from the KfW Development Bank gave detailed information. Schumacher closed the event with some encouraging words for German companies:

„The government will get out of this business. The Philippines want to privatize the energy sector.
That’s the good news.”


© DR. KLIPPE Consult 2010


(*) Dr. Andreas Klippe ist Associated Business Partner of the Euroüpean Chamber of Commerce of the Philippines.


Image above: Dr. Andreas Klippe, Mario C. Marasigan, Dr. Monika Stärk, Henry J. Schumacher