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Philippines

Talks bring time for action closer -- Philippines plans

Discussions have started between a California company and the World Bank over funding for 39 MW in wind-diesel projects at 19 sites in the Philippines. The World Bank's International Finance Corporation (IFC) confirms that it is in early talks about the demonstration project, proposed by BreezElectric LLC, a developer near San Diego, new to the wind industry.

"We're potentially interested in the BreezElectric project," confirms Peter Cook of IFC's power department. He cautions, though, that the IFC -- which promotes private sector investment in the developing world -- talks with many wind developers. It is, however, very interested in investing in wind and other renewables, though the only investment so far is in one wind project, in Costa Rica, some years ago.

The Philippines $50.3 million hybrid project on the mainland area of Luzon and 14 smaller islands would start commercial operation in the second quarter of 2002, says Douglas Wert of BreezElectric, whose background is in power plant development. BreezElectric received a small grant from the California Energy Commission almost four years ago for wind assessment in the Philippines and now intends to team up with a major wind company. It will use turbines of less than 1 MW that are variable speed, variable pitch and made by a manufacturer with a track record, says Wert. They could be retrofitted models, it seems.

Hybrid grid systems

BreezElectric is planning "hybrid systems" rather than autonomous hybrids and expects this to become a major market for the wind industry in remote areas such as Alaska, northern Canada or Siberia as well as on islands from Greece to Tasmania. At the same time, the Philippines is already tipped as an area of potential growth for the wind industry by the American Wind Energy Association.

Electricity from the wind-diesel projects will be sold to electric co-operatives, says Wert. The initiative is backed by the Philippine government, he says. As of mid-October, 50% of the contracts needed with co-operatives had been inked. And that figure was expected to be 90% by the end of the month. The electricity produced will cost half of that from diesel over 25 years, according to BreezElectric estimates. The average cost of energy in the islands is currently over $0.11/kWh. On some, it is as high as $0.20-$0.40/kWh.

BreezElectric says it is negotiating with the IFC for as much as 70%, or $35 million, of the capital cost. The company has also approached the Renewable Energy Efficiency Fund (REEF) for up to 50% of the equity interest. REEF, in which IFC is a lead investor, is a new global private equity fund exclusively for renewables and energy efficiency (Windpower Monthly, May 2000).

Using more renewables and less imported oil is a priority in the Philippines. In February, the government identified at least 11 sites for wind plants as part of its wind resource mapping. It is also attempting to ease regulations for renewables investment, from both foreign private parties and international donors.

The changes, in part based on a year and a half of co-ordination with the US government's National Renewable Energy Laboratory (NREL), included the elimination of specified back-up requirements for operators of renewables plants. NREL -- with backing from US-AID, the energy department and the Environmental Protection Agency -- has also been working on grid connected wind projects. The national utility, National Power Corp, now being deregulated, has been encouraging small wind using retrofitted machines for isolated grids. Much of the country has no electricity.

First decade potential

As much as 500 MW of wind could be developed in the next decade, according to NREL. Its Philippines Renewable Energy Project, with a budget of $100,000-200,000, has been working on market barriers and policy questions, says NREL's Laura Vimmerstedt. The investment is targeted in three areas, "hyrbridisation" -- its highest priority -- agricultural water-pumping, and hydro power. Utility scale wind farms are a near term possibility too, says Vimmerstedt. Several private entities have drawn up plans for projects of as much as 30-50 MW (Windpower Monthly, October 2000).

Renewables have been taking some time to get off the ground in the Philippines. A bill enacting financial incentives for renewables was stalled in the nation's congress earlier this year, although President Joseph Estrada has said he hopes to bring electricity to almost 10,000 small communities by 2004. "We are looking for partnerships, joint ventures or sole distributors," Rueban Quejas of the government's non-conventional electricity department told a recent renewables conference.

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