Biomass dev’t pushed to foreign investors
THE DEPARTMENT of Energy (DoE) has opened biomass energy development to full foreign ownership to encourage growth of the sector that has lured only a few investors even after the feedin tariff (FiT) scheme gave them a fixed, subsidized rate for their power output.
Marissa P. Cerezo, a director at the department's Renewable Energy Management Bureau (REMB), said the DoE was working on immediate publication of the “omnibus guidelines” for the award and administration of renewable energy contracts, signed earlier this month by Energy Secretary Alfonso G. Cusi.
“In these new guidelines, we opened up the biomass sector to foreign corporations," she told reporters, adding that the DoE has done away with the 60-40% ownership rule in favor of Filipinos.
She said the reason for allowing foreign ownership in biomass development is that this thrust
uses a natural resource, hence, no foreign ownership limitation should apply.
Biomass energy projects use agricultural waste to generate energy. The DoE has also classified waste-to-energy projects under biomass development, thus widening the sector's scope.
“We don't have the local technology on biomass yet so with this policy opening up to foreign companies, we believe that a lot more foreign companies will engage in biomass development or wasteto-energy development," she said.
DoE Undersecretary Felix William B. Fuentebella said the new guidelines have also removed the blocking system for biomass projects, which is akin to delineating the scope of a service contract in petroleum exploration projects. A block is equivalent to 81 hectares.
“You're not supposed to explore. There's no exploration stage. That's why in the award of the contract, it will start with operating stage,” he said.
Monalisa C. Dimalanta, chairman of the National Renewable Energy Board (NREB), said it was the biomass developers themselves who sought clarification from her office about whether technologies involved in wasteto-energy projects can be considered as exploration projects.
She said NREB, which advises the DoE on renewable energy issues, believes that these projects do not involve natural resources thus the nationality requirement should not apply.
“I think that's an indication that it will also unlock more interest or will realize more interest in the sector because… the request came from that sector itself," she said.
Mr. Fuentebella said he was optimistic that the new guidelines would encourage more investments in biomass projects.
“We're addressing one of the hindrances,” he said, referring to ownership restrictions.
He also said the problem of feedstock availability could be addressed by business models that allow the supplier of agricultural waste to be part-owner of the power plant projects.
Biomass development is among renewable energy technologies for which the DoE had set an installation target in a race to complete a project and qualify under the feed-in tariff program, an incentive scheme that grants priority connections to the grid, priority purchase and transmission of, and payment for, electricity generated.