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Concern on Philippines Lack of Wind Regulatory Framework

Vestas Wind Systems, Danish manufacturer and service provider of wind turbines, expressed concern on the future of wind power development in the Philippines citing the absence of an operational wind regulatory framework at present.

“We are concerned about the near-term outlook for wind in the country. Since the FIT2 (second round of feed-in-tariff) came to an end, and until other policies come into effect, there has been no operational wind regulatory framework,” Clive Turton, Vestas Asia Pacific president, said in a statement.

“As a result, wind development has come to a near halt while conventional fossil fuel generation continues to grow significantly. A wind energy pipeline of several hundreds of megawatts stands to be unlocked with clear policy in place,” added Turton.

He cited the country’s potential, having “some of the most abundant wind resources in South-East Asia.”

“Modern wind energy technology is able to generate more power, at a lower cost than ever before. This creates a real opportunity for the country to meet part of its growing electricity needs using competitive, independent and clean wind energy. Wind energy also creates local skilled jobs,” Turton said.

Vestas employs over 400 in the Philippines, where Vestas Services Philippines and Vestas Shared Service are located,and services a total of 183 megawatts of capacity in the country, including the Lopez Group’s Burgos wind power plant in Ilocos Norte.

Earlier, a study released by BMI Research warned that growth of renewable energy (RE) projects in the country over the longer term will be hampered due to industry specific risks including an underdeveloped grid network as well as restricted access to finance and pertinent legal risks.

But despite the warning, the group said the country will be one of the largest RE markets by installed capacity in Asean in the next five years, as projects are already in the pipeline and gradually commissioned.

The report specified that among the problems RE investors might face in the Philippines are ease of access in financing on both domestic and international markets, legal risks and overall strength of the rule of law, as well as the extent of corruption and investor protection.

It can be recalled that Alfonso Cusi, Department of Energy (DOE) secretary, had said he is not keen on having another round of FIT unless the premium can be sourced from other forms aside from the consumers, as it is not in line with the government’s goal to lower power rates.

Cusi said: “I do not want it (another round of FIT.) It is too much because FIT runs up to 20 years and it’s overburdening our consumers. We want to bring down our electricity rates. How can we bring it down if we keep on giving FIT?”

However, Cusisaid his stance might change only if the premium given to FIT-certified plants would not be taken from the consumers.

According to DOE data, installed capacity of wind projects remained unchanged at 427 MW last year from the 2015 figures.

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