combating climate change & energy poverty in the philippines

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Combatting Climate Change & Energy Poverty in the Philippines Alexander Ochs Director of Climate and Energy Manila - 24 June 2013

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The Philippines have an extremely high vulnerability to climate change and high levels of energy poverty (17% of 16 M people nationwide without electricity access). They also have a high dependence on fossil fuel imports, unsustainble use of fuelwood, and an economically, socially & environmentally unsustainable energy system. This presentation discusses current trends, future challenges, and insights into bringing sustainable energy to the Philippines.

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Page 1: Combating Climate Change & Energy Poverty in the Philippines

Combatting Climate Change & Energy Poverty in the Philippines

Alexander Ochs

Director of Climate and Energy

Manila - 24 June 2013

Page 2: Combating Climate Change & Energy Poverty in the Philippines

Current Situation: Key Problems

• Climate change vulnerability: extremely high

• Energy poverty: 17% of 16 mio. ppl nationwide w/out electricity access; Mindanao (40%), Visayas (23%)

• High dependence on fossil fuel imports: imported coal and oil for power generation and transportation

• Unsustainble use of fuelwood

• Economically, socially & environmentally unsustainable

Page 3: Combating Climate Change & Energy Poverty in the Philippines

Current Situation: Encouragements

• Renewable leader: 27% of power generation, geothermal, hydro

– But: solar and wind<0.1%, geothermal growth has stagnated

• Enormous unused potentials for energy efficiency and ALL mainstream renewables

• National Renewable Energy Program, Feed-in-Tariffs as important starting points; political commitment

Page 4: Combating Climate Change & Energy Poverty in the Philippines

Future Challenges & Opportunities

• Identify technical solutions: Harvest enormous potential for RE, EE & smart grid solutions

• Use socio-economic benefits to their fullest; communicate alternating electricity scenarios to generate widespread support

• Attract necessary investments; reform financial sector

• Create efficient & effective policies

Page 5: Combating Climate Change & Energy Poverty in the Philippines

Sustainable Energy Roadmaps

Page 6: Combating Climate Change & Energy Poverty in the Philippines

Our Work

Page 7: Combating Climate Change & Energy Poverty in the Philippines

Key Insights (1)

• Strategy of change: Local knowledge & ownership; sandwich strategy

• Technological solutions: It’s all in the mix; need for integrated short- and long-term energy planning

• Socio-economic: Need for paradigm change: BAU is the luxury path!

• Need for capacity building in financial & political sectors; human & institutional resources

Page 8: Combating Climate Change & Energy Poverty in the Philippines

Key Insights (2)

• Political feasibility and regulatory fit: one size does not fit all!

• Available tool box of tested policies, measures &administrative reform

• MRV-T: measured, reported, verified – transparent

• Stakeholder inclusion; mainstreaming

• Need for implementation

Page 9: Combating Climate Change & Energy Poverty in the Philippines

Renewable Resource Assessments: Solar Potential in Haiti

Page 10: Combating Climate Change & Energy Poverty in the Philippines

Sustainable Energy Roadmaps: Technical Analysis

Diurnal Wind Speed Variability and Load Profile in Jamaica

Page 11: Combating Climate Change & Energy Poverty in the Philippines

Sustainable Energy Roadmaps: Socioeconomic Analysis

0

51015

202530

354045

5055

Oil Steam OilCombustion

Turbine

OilCombined

Cycle

DieselGenerator

PetroleumCoke

Subcritical

CoalSubcritical

Natural GasCombined

Cycle

Bagasse Wind Small-ScaleSolar PV

Large-ScaleSolar PV

Hydro

USc

/kW

h

Generation Fuel Cost Pollution Climate Change

Levelized Cost of Electricity + Externalities (LCOE+) for Jamaica

Page 12: Combating Climate Change & Energy Poverty in the Philippines

Scenario Analysis for Jamaica

-

5,000

10,000

15,000

20,000

25,000

30,000

Total Investment Required to Meet Annual Demand Total Cost of Electricity Generation Total Savings Over Business As Usual

USD

(In

Mill

ion

s)

Business As Usual 20% Renewable Energy 30% Renewable Energy 50% Renewable Energy 70% Renewable Energy 94% Renewable Energy

Page 13: Combating Climate Change & Energy Poverty in the Philippines

Sustainable Energy Roadmaps: Financial Analysis (1)

• High installment vs. low life-cycle costs

• Finding the right project sponsors at the right scale; underperforming domestic banking sector

• Many projects are not finished on-time or on-budget

• The necessary regulatory systems or financial mechanisms (e.g. FiT) needed to encourage financing

Page 14: Combating Climate Change & Energy Poverty in the Philippines

Sustainable Energy Roadmaps: Financial Analysis (2)

• Bureaucratic hurdles; e.g. permitting process

• Indebtedness/creditworthiness of the country key; ways to overcome

• A lack of institutional capacity to apply for international finance

Page 15: Combating Climate Change & Energy Poverty in the Philippines

Sustainable Energy Roadmaps: Policy Analysis

Barriers

Systemic Vision Energy sector and industry vision

Policy and Regulatory

Misplaced incentives, policy/regulatory uncertainty

Cost High LCOE, unaccounted costs, market and currency fluctuations

Finance Cost of capital, unavailability of financing, unmanageability for banks, upfront costs

Political Politicization of key issues, short-term priorities

Entrenched Interest Monopoly/vertical integration, anti-RE lobby

Infrastructure Unsuitability of infrastructure, high cost of development, intermittency/storage

Innovation Patent protection, lack of R&D

Public Acceptance NIMBY, cost of RE to consumers

Knowledge Knowledge gap, capacity building, deficient and uncoordinated dissemination of information

Trade Tariffs, trade disputes

Enablers

National renewable energy targets

Visio

n

Regulatory policies (Feed-in tariff, RPS, etc.)

Co

ncrete P

olicie

s

Fiscal incentives (tax incentives, subsidies, grants)

Public financing (public investment, loans, grants)

Energy market regulations

Trade agreements

Streamlining processes (planning, permitting)

Go

v. &

Ad

min

.

Page 16: Combating Climate Change & Energy Poverty in the Philippines

Governance & Administrative Efficiency

Application for a provisional concession at

CNE

CNE publishes the concession

request in a national

newspaper

CNE publishes the granting of the provisional

concession

Application to Electricity

Supervision Board (SIE)

CNE includes the applicant in the Special

Regime Production

Facilities Register

Granting of provisional concession

Application for a permanent concession

Environmental Impact Study (SEMARENA)

Resource and production

analysis by a company

authorized by CNE

Grid study CDEEE

guarantee of PPA

Guarantee

CNE receives the reports of

the SIE and SEMARENA

Definitive concession

Page 17: Combating Climate Change & Energy Poverty in the Philippines

Next Steps

• Identifying appropriate islands and communities

• Finding the right partners

– Government, local organizations, businesses

• Finding the right funding organizations

Page 18: Combating Climate Change & Energy Poverty in the Philippines

Thank You! [email protected]

Alexander Ochs and Shakuntala Makhijani,

Sustainable Energy Roadmaps: Guiding the Global Shift to Domestic Renewables

Worldwatch Report #187: March 2012