FITCH SOLUTIONS Country Risk and Industry Research said policies adopted by the Department of Energy (DoE) are poised to accelerate the decarbonization of the power industry by raising investor interest in renewable energy (RE).
The positive outlook for the renewables sector was driven by changes to the regulatory environment such as the DoE’s Renewable Portfolio Standard (RPS) and the Green Energy Option Program (GEOP).
Fitch Solutions also noted a significant expansion of more than 10 times in the renewables project pipeline compared to the level recorded in March 2021. Pending projects include those participating in the DoE tender for 2 gigawatts of renewable energy for the Luzon, the Visayas, and Mindanao.
Under RPS, power distribution utilities, as well as electric cooperatives and retail electricity suppliers, are required to source portion of their energy supply from RE.
Meanwhile, the GEOP gives electricity consumers the option to tap RE for their energy needs.
In a virtual interview, DoE Director of the Renewable Energy Management Bureau Mylene C. Capongcol said that the department has also started examining how to mitigate risk for geothermal energy investors.
“Geothermal actually is 24/7 and can compete with other conventional (sources) like coal. Right now, the cost of developing geothermal is very expensive and the success rate is very low, so recognizing the value of that, we will be coming out soon with a risk mitigation policy for geothermal energy development,” she said.
Strong opposition to the use of coal as a fuel for power generation has led Fitch Solutions to revise downwards its forecast for coal-fired power generation in the Philippines.
Even with the moratorium on coal-fired power projects issued by the DoE in December 2020, coal remains the leading fuel for the industry, with coal-fired plants accounting for 61% of the power mix by 2031. — Ram Christian S. Agustin