POWER CAPACITY provided by renewable energy is expected to hit 5.4 gigawatts (GW) in 2026, making the Philippines one of the “outperformers” in the region, BMI Research said.

“Increasing investor interest in the [Philippine] renewables sector, supportive government policy and renewed efforts to channel investment into grid infrastructure underpin our constructive growth forecasts for non-hydropower renewables capacity in the Philippines,” BMI Research said in a report released on Tuesday.

The firm said it had made “a slight upward revision to our renewables forecasts for the Philippines this quarter, as we have seen increasing investor interest in the market and rising support from the government towards the sector.”

It said its previous forecast placed the country’s non-hydro renewables capacity at 4.3 GW. It said the project pipeline had strengthened across the wind, solar, biomass and geothermal sectors.

“We now expect non-hydro renewables generation to total just over 19 terawatt hours (TWh) by the end of our 10-year forecast period in 2026, up from the previous forecast of 17.5 TWh,” it said.

BMI Research’s report comes amid recent developments in the sector, including an announcement in October by the US Trade and Development Agency that it awarded a grant to Philippine company Tayabas Geothermal Power.

The US grant is to help in the development of a 60 to 100 megawatt (MW) geothermal project in Luzon. Drilling operations are expected to begin in the first half of 2018.

It also cited a contract signed by Sunray Power with the Department of Energy (DoE) in October for the development of a 100-MW solar photovoltaic plant.

“It was reported in October that the National Renewable Energy Board of the Philippines is looking to propose renewable portfolio standards (RPS),” it said about the body’s recommendation to the DoE.

“The RPS would mandate distribution utilities to source a part of their power portfolio from renewable energy,” it said.

“Besides these positive developments, we have also seen the government take steps to reduce bottlenecks in project development and channel investment into improving the grid infrastructure, which is essential to the ongoing integration of renewable energy into the power network,” it said.

“For example, in July 2017 it was announced that the government reduced the time required for renewables projects to secure permits and licenses,” it said.

It also said that in April, the Energy Regulatory Commission had approved the National Grid Corp. of the Philippines’ $138.04-million transmission-backbone project in Mindanao.

“While visibility on the project pipeline post 2020 is still fairly limited and, as such, our forecasts post 2020 remain muted, we note that the Philippine government has renewed its commitment to integrating renewable energy into the domestic power sector,” it said.

“The government has a target of deploying 15.3 GW of renewables capacity by 2030, which is in line with the country’s wider aim of reducing carbon emissions by 70% by 2030, as part of the UN Paris Agreement which the government ratified in March 2017,” it added.

BMI Research, a unit of the Fitch Ratings group, said the Philippines’ long-term commitment to renewable energy supports the firm’s constructive outlook for the sector and “will cement the country as one of the outperforming markets in ASEAN (Association of Southeast Asian Nations) for market attractiveness and growth.” — Victor V. Saulon

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