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EuropeAid/136650/DH/SER/PH

4th EU-Philippines Meeting on Energy

and Launch of the

Access to Sustainable Energy Programme (ASEP)

October 7, 2016

Documentation Report


Contents Acronyms ................................................................................................................................................ 3

Background ............................................................................................................................................. 4

Participants ............................................................................................................................................. 5

Welcome and Opening Remarks............................................................................................................. 6

Plenary Presentation: An Overview on the Access to Sustainable Energy Program (ASEP) .................. 8

Keynote Address ................................................................................................................................... 11

Panel Discussion: Renewable Energy for Rural Electrification ............................................................. 14

Closing Remarks .................................................................................................................................... 17

Annex 1: Agenda .................................................................................................................................. 18

Annex 2: Participants’ List ..................................................................................................................... 19

Annex 3: Keynote Address ................................................................................................................... 24

Annex 3.1: Keynote Address of Senator Loren Legarda .................................................................. 24

Annex 3.2: Keynote Address of Prof. Dr. Christoph Menke, ASEP Advisor ...................................... 29

Annex 4: An Overview on ASEP by DOE Undersecretary F.W. Fuentebella ......................................... 34


Acronyms ARMM Autonomous Region in Muslim Mindanao ASEP Access to Sustainable Energy Programme CSO Civil Society Organization DOE Department of Energy EC Electric Cooperatives ECCP European Chamber of Commerce of the Philippines EEC Energy Efficiency and Conservation EPIMB Electric Power Industry Management Bureau EPIRA Electric Power Industry Reform Act of 2001 ERC Energy Regulatory Commission EU European Union FIT Feed-in-Tariff GHG Greenhouse Gases GIS Geographic Information System ICT Information and Communications Technology IEA International Energy Agency MERALCO Manila Electric Company MW Megawatt NEA National Electrification Administration

NEA-ORED National Electrification Administration - Office of Renewable Energy Development

NEDA National Economic and Development Authority NGO Non-Government Organization NPP New Power Producer PDP Philippine Development Plan PV Photovoltaic QTP Qualified Third Party RE Renewable Energy SHS Solar Home Systems TA Technical Assistance UNICEF United Nations Children's Fund WACC Weighted Average Cost of Capital WB World Bank


Background The European Union - Philippines Meeting on Energy is a high-level forum for exchange on latest topics and trends in the energy sector, hosted by the Energy Secretary of the Government of the Republic of the Philippines and the Ambassador of the European Union to the Philippines. Since 2012, the meeting has set the stage for a public energy sector dialogue between EU and Philippine policy-makers, administrators, private sector and civil society. This year’s event held on October 7, 2016 focused on how we can ensure “Electricity for a Better Life”. In the context of global and regional clean energy market development, participants discussed sustainable ways of providing electricity for socio-economic development to underserved and poor households in the Philippines. An expert panel debated viable business models and success factors for the provision of basic electricity services from renewable energy sources to remote and dispersed off-grid areas. The European Union - Philippines Meeting on Energy also officially launched the new “Access to Sustainable Energy Programme (ASEP)”. Through ASEP, the EU has allocated a grant of over 3 billion pesos (EUR 60 million)to assist the Government of the Philippines to meet its rural electrification targets by means of renewable energy, and to promote energy efficiency. As a focal sector for EU development cooperation with the Philippines, the EU has earmarked a total of EUR 190 million out of an overall cooperation budget of EUR 325 million to the energy sector for the period 2014-2020. This year’s EU Philippines Meeting on Energy is the fourth event since 2012. Previous topics discussed included the potential to replicate EU experience on renewable energy promotion in the Philippines (2012); energy efficiency and possibilities to reduce energy consumption and carbon emissions, whilst increasing jobs (2013) and ways to secure a sustainable and competitive energy future (2015).


Participants The 4th EU-Philippines Meeting on Energy was graced by high ranking officials from the EU Delegation led by Ambassador Franz Jessen, and the Philippine Department of Energy led by Undersecretary Jesus Cristino Posadas, representing DOE Secretary Alfonso Cusi. A total of 171 participants engaged in energy initiatives attended the event. The participantsrepresented various sectors, namely: the EU Delegation, ambassadors and heads of mission; national government agencies; industry players (ECs, utility associations, QTPs, NPPs); private sector (business, energy innovators, suppliers); development partners; banks & financial institutions; academe; civil society organizations, and the press/media. Among the total 170 participants, 109 consisted of males and 61 were females. Thus, the women representatives from the various sectors comprised 36% of the total participants.The event was moderated by Ms. Regina Hing-Lay from Bloomberg TV Philippines. Breakdown of number of participants per sector and gender is as follows:

Sector Number of Participants

Male Female

EU Ambassadors, Heads of Missions, EUD 26 18 8

Government Agencies 29 17 12

Industry Players (ECs, Utility Assn., QTPs, NPPs) 21 13 8

Private Sector (Business, Energy Innovators, Suppliers)

39 29 10

Development Partners 14 10 4

Banks & Financial Institutions 3 1 2

Academe & CSO (NGO) 9 7 2

Press/Media 17 10 7

Organizing Committee 12 4 8

Total 170 109 61


Welcome and Opening Remarks The Welcome and Opening Remarks were delivered byH.E. Franz Jessen, Ambassador of EU to the Philippines and Undersecretary Jesus Cristino Posadas of the Department of Energy.

Ambassador Jessen shared his enthusiasm about the current initiatives of EU in the renewable energy sector. For more than 30 years, the EU has been working with the Philippines in achieving its pro-poor agenda specifically on job creation, provision of clean water and access to energy. The following is a summary of Ambassador Jessen’s speech: The 4th Meeting on Energy focuses on the 2.5 million

households that do not have access to reliable energy. It is known that the lack of access to stable power holds people back, but when people do have access to these services, their lives improve, having the power to do better in life. With the theme of the meeting, Electricity for a Better Life, there are three dimensions of a better life through electricity. First is that people have access to modern forms of energy; second dimension gives emphasis on actions today to help preserve the future through promotion and utilization of clear and disaster-resilient energy systems; and the third dimension is securing the energy future of the country. The partnership with EU works around these three (3) dimensions. EU has committed PhP3 billion for the Access to Sustainable Energy Programme (ASEP), aiming to use renewable energy to achieve 90% household electrification and improve energy efficiency. Through ASEP, EU and the Philippines are pursuing to achieve three specific objectives. First is the provision of clean energy solutions to 100,000 households to roughly 500,000 people. Second is to add 20 megawatts (MW) of additional renewable energy projects. Third is to improve energy efficiency and generate savings of greenhouse gas emissions equivalent to a 50MW coal-fired power plant. There are two aspects of ASEP that are particularly important - development of viable business models for innovative energy solutions, and the technical assistance made available to the Department of Energy and the energy agencies. Both support components are seen to provide policy solutions to ensure that commitments to electrify the rest of the un-electrified households can be realized. EU continues to be the largest investor for renewable energy in the country. These investments amounting to PhP90 billion as of 2015 made up 70% of total investments in the renewable sector; hence, showing evidently EU’s dedication in promoting clean energy, along with its recent ratification of the Paris Agreement. The renewable energy sector plays a particularly important role in the country, considering that the Philippines is composed of more than 7,000 islands and has high vulnerability to natural hazards. Decentralized clean energy solutions can be provided through renewable sources like solar energy; while hybrid mini-grid can provide people with reliable access to power that increases economic activity. The support from ASEP enables the government to provide subsidies for 40,000 solar home systems through the electric cooperatives. Recipient-households will pay a fee determined by the Energy


Regulatory Commission (ERC) to ensure that future maintenance costs are covered. In addition, in remote islands that have no electricity or only have access through diesel generators, ASEP will support mini-grids through the PhP1 billion allocation for mini-grids or hybridized diesel mini-grids, thus expecting a total of 20,000 households to be electrified through such energy solutions. In terms of energy efficiency, the EU has supported the government in the development of the Energy Efficiency Roadmap and Action Plan. Through allocation of PhP6 billion in the ASEP, the implementation of the roadmap can lead to energy savings efficiency equivalent to adding one (1) 50MW coal fired power plant per year. Also, the investments on energy efficiency would create jobs and free the financial resources that companies can invest in new business opportunities. To conclude his speech, Ambassador Jessen expressed his confidence that the EU and the Philippines have put in place a strong programme to support access to modern energy. He expressed his excitement to go on joint visits to witness the first concrete outputs of the cooperation.

On behalf of DOE Secretary Alfonso Cusi, Undersecretary Jesus Posadas delivered the welcome & opening remarks. The following is a summary of Usec. Posadas’ message: The DOE thanks the EU for its untiring efforts to keep the annual tradition of holding dialogues on significant energy concerns. The 4thMeeting on Energy focuses on the the indispensability of electricity to having a better quality of

life. In fact, EU and DOE recognize the impact of the theme not only as a self-evident truth or an unchallenged truism, but likewise, as an elusive target and a continuing aspiration. It is very appropriate for the Philippine’s social situation, characterized by a burgeoning population, marked poverty permeating all areas of the country, and incomplete energization. The population of the country already exceeded the 100 million mark and keeps on growing. Around 25% of the population live below poverty line, with 60% of them situated in rural areas. By the end of 2015, 90% of the households were already electrified or equivalent to 20 million households; however, there are still a lot to catch up in this initiative, especially in Mindanao. President Duterte will not let the people down, and he is determined to address our systemic issues, especially the state of our energization, which again bears an impact on our social situation. DOE’s marching orders from the President is to increase energy capacity of the country’s industry and agricultural development, and to bring power to Mindanao – taking consciously and seriously in steps to lessen the country’s carbon footprint. Whether it provides basic lighting, a meaningful community application, or an enduring productive use, access to energy greatly improves lives and lifts the human spirit of the Filipino. Actions are gradual but great strides have been made. In fact, by 2015, the country’s installed capacity reached 18,765MW and for the first half of 2016, an additional capacity of 971MW was pumped into the system. DOE has awarded 724 RE service contracts, with a potential capacity of 14,498MW. It has also adopted innovative and cost-effective electrification solutions such as solar photovoltaic systems, especially for the benefit of the remote and dispersed households where operations and extension of distribution facilities could prove unviable or too costly.


The partnership with EU enables the government to actively pursue Energy Efficiency and Conservation (EEC) measures. Since 2008, there is an influx of additional RE capacities which not only generated a total of 3 million tonnes of CO2 emissions reduction, but also created 16,418 green jobs. While these are great accomplishments, DOE is still poised to further ensure energy security by fostering a safe and business-friendly climate for investors in the sector, whether in the main grids or in the off-grid areas. The government is grateful that EU remains to be an ever staunch and proactive partner of the Philippines in improving its energy policy and fortification of its energy infrastructures. With the formulation of the new programme, ASEP, will surely work wonders for the underprivileged and underserved people in the country. In the end, Usec. Posadas emphasized that the country greatly benefits from the friendly relations with the international community, particularly EU and its member-states; hence, the government is looking forward with much anticipation for more collaborative dialogues.

Plenary Presentation: An Overview on the Access to Sustainable Energy

Program (ASEP) By: Undersecretary Felix William Fuentebella, Department of Energy

As of 2015, rural electrification program at the household level reached at 89.62%, while barangay electrification already reached 99.9%. From this figure, Mindanao still remains lowest in terms of household electrification; in fact only 74% of the entire households in the island are electrified, compared to high household electrification rate in Luzon (95%) and Visayas (91%). Thus, the government aims to reach 90% household electrification in 2017 and 100% by 2020, specifically catering to 829,000 un-electrified

households, where 400,000 will be through grid electrification. Complying with these targets, there are already 14,000 and 37,000 households electrified within 100 days of the new administration under the Manila Electric Company (Meralco) and in off-grid areas, respectively; while, the National Electrification Administration (NEA) will continue to implement the sitio electrification and the barangay line enhancement programs. The Department of Energy has identified eight (8) thrusts, to which thrusts no. 2 (accelerate and expand household electrification level) and no. 3 (implement energy efficiency and conservation roadmap), fall under the new EU-Philippines joint undertaking program. Dubbed as Access to Sustainable Energy Programme or ASEP; the programme envisions to give poor and marginalized communities in the Philippine rural areas with sustainable access to electricity supply for socio-economic development. With the programme’s objective of generating more electricity from renewable energy, increasing efficiency of energy use, and increasing access for the poor to affordable, disaster-resilient energy systems, the following targets are seen to contribute to rural electrification and energy efficiency thrusts of DOE:

100,000 - 150,000 poor households in remote areas will be electrified, and/or will utilize innovative energy solutions

20MW of new clean RE generation will be installed


GHG emissions equivalent to that discharged by one 50MW coal fired power plant will be avoided

The program has three components, namely: 1) Technical Assistance and Capacity Building for Reform, 2) Investment Support, and 3) Call for Proposals for Pro-Poor and Climate-Resilient Innovative Energy Solutions. The first component focuses on policy and strategy advice, planning tools and business model development, and provision of targeted support to implementation of investment components, including innovative and disaster-resilient energy solutions. It directly supports DOE as programme manager and provides capacity building initiatives to strengthen the agency’s capacity, specifically the Electric Power Industry Management Bureau (EPIMB) in the implementation of energy reform programs. Also, this component provides tools for evidence-based decision making. The second component involves World Bank as the trust fund manager. Under the component, EU has allocated EUR29 million to support projects that are specifically designed to enhance the capacity of electric cooperatives (ECs) to implement rural electrification objectives and promote RE-based energy systems. These projects include the DOE’s PV Mainstreaming (40,000 solar home systems in two years) and the Rural Network Solar Program. It shall also provide technical assistance to the National Electrification Administration’s Office for Renewable Energy Development (NEA-ORED), ERC, and the ECs on IT information systems that will allow for improved planning for electricity generation through geographic information system (GIS), efficiency in EC management (EC connect), and improved disaster resiliency planning. The third component which is the Call for Proposals involves a maximum of EUR21 million funding assistance for interested stakeholders that would want to undertake innovative solutions and sustainable business models for providing access to electricity in remote households. These stakeholders may include ECs, private sector, social enterprises, microfinance institutions, CSOs and international donors. EU will co-finance selected projects up to 80%, specifically diesel-hybrids, mini-grids, electrification for livelihood generation in Bangasamoro areas through Solar Home Systems, basic supply model for the marginalized areas, capacity building and advocacy initiatives. The purpose of this component is to complement the selected Technical Assistance studies and World Bank managed projects with fresh ideas from other sources. Key stakeholders from the sub-national and national levels will be involved in the implementation of ASEP. The DOE will be the program manager, with support from the ASEP Steering Committee. Refer to figure 1 on Key ASEP Stakeholders.


Figure 1: Key ASEP Stakeholders

The presentation of DOE Undersecretary Fuentebella was followed by the formal launching of ASEP through the turnover of the ASEP Inception Report to the DOE. Photo shows DOE Undersecretary Jesus Posadas receiving the Inception Report from EU Ambassador Franz Jessen, as witnessed by Ms. Simone Rolfe and Mr. Achim Tillesen of the EU Delegation, Mr. Ernesto Silvano, Jr. of NEA, and Ms. Sharon Montaner of ERC.


Keynote Address Senator Loren Legarda and Professor Dr. Ing. Christoph Menke

1. Universal Access to Electricity as Key to Delivering the Promise to Change By: Senator Loren Legarda - Chairperson of the Senate Committee on Climate Change

Senator Legarda acknowledged the presence of EU Delegation, DOE Officials, and Energy Stakeholders. She thanked EU for the opportunity given to the Philippines in pursuing its goal on providing access to affordable and reliable energy. There are varying accounts on access to energy in the Philippines: the International Energy Agency (IEA) estimated that 79% of the country’s population have access to

electricity, while World Bank pegged it at 87.5%. However, both accounts show that Mindanao is the most impoverished with regard to access to electricity. In fact, Mindanao has the lowest percentage of electrified households compared to Luzon and Visayas. In terms of urban and rural electrification, 94% are electrified in urban areas and only 73% of the rural areas are electrified, which leaves the country with 4.4 million un-electrified households generally located in rural and remote areas. According to UNICEF, 6.6 million Filipino children, or 2 out of 10 are living in homes with no electricity. Thus, placing these sets of data in a global perspective, 21 million out of the 1.1 billion people with no electricity are situated in the Philippines. As the theme of the event, Electricity for a Better Life, captures Senator Legarda’s message, she pointed out that electricity directly correlates to development. Senator Legarda said she fully supports the energy reform agenda of DOE but this should be aligned with the low carbon objective. Hence, the sustainable development-energy nexus revolved around achieving universal access to clean energy is within reach and promoting low carbon economy as means to create job and curb carbon emission. Moreover, it is equally important to train the communities in bigger goals to improve their lives, while meeting the targets of rural electrification. Tools should not just be provided to communities, rather it should be developed with them, with the aim of creating a culture of responsibility among recipient communities. Senator Legarda who is concurrent Chairperson of the Senate Finance Committee stated,“I will look into the NEA and the Sitio Electrification budget and see where ASEP can come in. As soon as I see where the loopholes are or where to plug the leaks for faster electrification sooner than 2020, perhaps I can double, triple or augment the NEA budget, as long as you show me that the DOE and the NEA have the absorptive capacity to utilize its budget for 2017 and beyond.” To that end, Senator Legarda emphasized three (3) key takeaway points for the energy reform program. The program should: 1) improve the livelihood and living conditions of the poor, particularly those who currently have no access to electricity;2) be sensitive and cognizant of the needs of the communities; and 3) help create a culture of responsibility among the recipient communities. Senator Legarda sincerely expressed her gratitude to EU, for being a friend and for always being there for the country.


2. How Worldwide Energy Developments support Access to Sustainable Energy By: Prof. Dr. Ing. Christoph Menke - ASEP Strategic Advisor

Professor Dr. Christoph Menke emphasized that ASEP is bounded by a sustainable development framework. Specifically, it works on a framework that economic development is a requirement for peace, at the same time peace is needed for economic development. And the new government has put a strong focus on achieving targets around peace and economic development framework. One of the key preconditions to economic development for

rural communities under ASEP is the reliability and affordability of electricity, which can be addressed by the new advances in energy technologies for off-grid sector. Sustainability for energy access needs more technologies and require new business models. Professor Menke gave examples of clean energies in creating “disruptive technology trends”. He cited that solar PV’s cost fell dramatically in the last years and will continue to fall further. In Germany, cost of solar accounted for 80% of cost reduction in the last 10 years, while Abu Dhabi had the world’s lowest bid in September 2016 amounting to PhP1.16 per kWh for a 350 MW power plant. Energy storage technologies are also following the learning curve of PV module costs. Likewise, electric vehicles are entering the market, along with self-driving cars and shared mobility concepts. According to Professor Menke, these developments will lead to massive “clean disruption” of the energy and transportation sector by the years 2020-2030. Meanwhile, investments in renewable at the global level have outplayed conventional since 2012 and there is no indication that this investment pattern will reverse, instead it will continue to increase dramatically. PV market grows rapidly, in US alone 10GW is currently under construction, while China plans to put up a 135GW of solar facility. Energy storage is becoming competitive for grid operation and short-term stabilization because the distribution, transport, and energy markets are pushing the same thing. Hence, with the probable disruption to existing power generation and energy market, a smooth transition without too much economic costs and damages is essential. At the EU level, most EU countries are turning to renewable at a potential scale and preparing to do more, mainly because of the developing cost of technology, economic development, support to climate change initiative, and energy security. In fact, EU has 29% electricity generation from renewable, while Denmark, the world leader generates 42% of its electricity from wind annually. He discussed the energy transition in the Philippines, specifically: the generation from RE which is still at 30%; the successful start of the RE Law implementation; private sector participation in RE market that resulted to cost reduction in the recent RE systems. Menke identified an urgent upcoming task, which is to get flexibility into the existing power system to realize the lowest system costs in the long run. He explained that this is not just about changing one kind of power to another, but rather, it is about changing the entire system setup. Professor Menke presented the energy challenges in Philippine rural electrification, such as the low electricity supply vis-a-vis the economic development, energy costs, energy efficiency and security, technology developments, and access to climate fund with implied carbon emission restrictions.


Then he discussed the new approaches possible to address these energy issues and challenges, such as the 3 Ss for Power namely: stable, sustainable, “sulit” (Filipino term for value for money); reduce the burden for consumers and businesses; support rural development; and focus on Mindanao, especially the ARMM region. Dr. Menke stated that changes in technology and business models can jumpstart access to sustainable energy. He stressed that the expected output of ASEP is beyond the concrete electrification numbers: and that is to develop and confirm viable business models and success factors for sustainable energy access and services. If this output can be realized, together with DOE and other partners, Menke said that it shall pave the way for more work and more funds for the energy sector, on the condition that there is enough absorptive capacity. To that end, Dr. Menke concluded that the future is bright and electricity for a better life is possible, given the available technologies, innovative business solutions, private sector participation, financing, and energy efficiency schemes.


Panel Discussion: Renewable Energy for Rural Electrification

A panel discussion on best practices and viable delivery mechanisms of renewable energy for rural electrification was carried out. The panel was composed of Mr. Roderick Planta, NEDA Director of Infrastructure Staff; Mr. Romeo Montenegro, Deputy Executive Director of the Mindanao Development Authority; Mr. Ernesto Silvano, Jr., Head, Office of Renewable Energy Development of NEA; Mr. Hubert D’Aboville, representing the European Chamber of Commerce of the Philippines; Mr. Yuriy Myroshnychenko, Senior

Energy Specialist of the World Bank; and Prof. Dr. Ing. Christoph Menke, ASEP Strategic Advisor. The discussion was moderated by Ms. Regina Hing-Lay of Bloomberg TV Philippines. The discussion evolved around the following key questions:

What can we all do to ensure that the Philippines would achieve its household electrification targets?

How do we turn these targets into tangible inclusive growth?

Can a country like the Philippines afford to shift its energy system? 1. On closing the gap on electrification targets Director Planta, NEDA: The targets under the Philippine Development Plan (PDP) are formulated by various stakeholders through proper governance process, like stock-taking and consultation. And based on standards, it started at documentation of accomplishments as said to be 86.9% electrification in 2015, followed by a realistic plan to address the development challenges in the energy sector. The development thrust for 2017 should be aggressively translated to investment plan and reflected in the budget, taking into consideration possible cooperation with development partners. The government should also draft policies creating an enabling regulatory environment for the entry of the private sector in the energy and electrification sector. Finally, the oversight agencies should try to address the institutional rigidities, enhance absorptive capacity, address procurement concerns, and establish proper M&E systems to ensure that desired results are achieved. Mr. D’Aboville, ECCP: Since the time of former President Estrada, rural electrification is extremely difficult to conduct on the ground. Based on experience in the Mindanao electrification initiative financed by the French government, there is a need to stress on security concerns especially in the most remote areas and simplify the regulations for this. Mr. Montenegro, Mindanao Development Authority: Mindanao’s energy situation is quite different from Luzon and Visayas and it is very much unfortunate that it has the lowest level of electrification especially in conflict and remote areas like Basilan, Sulu, and Tawi-Tawi, apart from not having much economic activity. And while the way forward for power development and rural electrification in Mindanao is focused on these areas, such initiative should be done in an integrated manner beyond lighting; other requirements of the communities, such as livelihood and basic services should also be addressed.


Mr. Silvano, NEA-ORED: The track record of NEA would show that it has been doing 100% as far as the target set for the electric cooperatives. NEA presumes that targets for energy nexus is doable, specifically for Mindanao, since there is an initiative with LASURECO that can be replicated to other areas. Under this initiative, an inter-agency Task Force composed of DOE, NEA, NGCP, Transco, DILG, DBM, and DOF was formed to oversee the operations of Lanao del Sur Electric Cooperative (LASURECO). The initiative intends to reform the electric cooperative, capacitate the management, and pursue massive information drive to involve the consumers and stakeholders in supporting the electric cooperative. The government believes that the solution should involve the communities to instill ownership on the system. In terms of rural electrification, NEA is in partnership with EU for off-grid electrification, mainly relying on renewable energy. It is also looking at clusters beyond the grid and possible provision of subsidies for off-grid to enable the ECs to cover more areas. Mr. Myroshnychenko, World Bank: As far as electrification is concerned, 89.6% are those households connected to the grid; however, electrification makes it even harder without the grid connection. Thus, there is a need to qualify what electrification means in the current energy situation of the country, and be mindful that there are different levels of services and options. For instance, can a household with three lights and a radio be considered electrified or not? There are challenges and lessons in the past PV mainstreaming efforts of the government, which are essential in developing the delivery mechanism that makes sense for the current and future days. The 40,000 SHS target is seen as a pilot for trying a delivery mechanism to make it more sustainable and to ensure that services provided are useful services. Dr. Menke, ASEP: To complement the global aspect, there is a term called “productive use of technology”, like in Argentina, energy works in tandem with a livelihood activity that can be used to pay for the household’s electricity. 2. On finding balance and improving energy forecasting

Dr. Menke, ASEP: Forecasting is one of the difficulties of energy planners because energy price uncertainty is built on many factors. However, an incremental planning can be done taking into consideration the certain price range of the future and how much need is required. The good thing about renewable is that all costs are upfront - once the system is up and running, the future costs can already be computed. Hence, if this kind of adequate planning can deliver electricity at acceptable cost, the uncertainties of other technologies can be taken out. The best option is to factor in the uncertainties and make small decisions because more investments on renewable would equate to more energy, hence having lesser influence to price fluctuation. 3. On the country’s plan to build more coal plants Dr. Menke, ASEP: Coal plants should be built in a flexible manner using world class technology and on a fewer scale. Otherwise, problem will arise if the coal plant is built to run for 24 hours with no flexibility under a contract for the next 20 years. The challenge for the current government is to address the concern of, “How much is too much?” For instance, in China, 150 gigawatt coal plants became on line this year but nobody needs them because five (5) years ago, they were projecting that energy would


grow by 6% percent per year, but it actually only grew by about 1.5%. Now, they are rethinking about these coal plants not to mention the pollution they bring in the city. Mr. Montenegro, Mindanao Development Authority: About 20 years ago, Mindanao is 90% RE, powered by hydropower facility, but it went down to 60% in 2015. And this year, coal power plants of Aboitiz and San Miguel started to kick in, which is seen to deliver a 70-30 energy mix in 2018, wherein 80% of the generation come from coal. This is something Mindanao wants in terms of base load capacity given that hydro power is no longer reliable especially during El Niño. Hence, there is a need to have a direction of diversified energy mix and to identify the kind of technology needed for such energy mix. By 2030, Mindanao wants to wrestle back the dominance of fossil to RE by at least 50-50 by accelerating the deployment of renewable energy projects (about 280 current applications with aggregate capacity of 3000MW). 4. On concerns of congestion and voltage with too many solar power farms i.e in Negros. Is there a

way to consolidate all efforts to be able to distribute the energy efficiently? Director Planta, NEDA: These are challenges that need to be addressed to figure out the way forward. There is a need for coordination among agencies to look on these challenges. Mr. D’Aboville, ECCP: There is the FIT and cap on the FIT, and everyone wants to become part of it. However, there is no sharing of information and everyone is hiding their respective work in order to become part of the FIT regime. Thus, it all boils down to having an open communication, transparency, and information sharing to harmonize efforts in the RE sector. 5. On various policies like Feed-in-Tariff (FIT) Dr. Menke, ASEP: The experience of Negros was a result of the first come-first serve scheme under FIT. While the lesson learned is that the private sector is very capable to get things moving fast, policy should be smart in order to provide clear guidance. The RE law itself is very comprehensive, but at the same time complex and things like the first come-first serve scheme has created such experience which should not have been necessary in the first place. Hence, this points to the question of making an optimization of the evacuation of the demand and supply in the energy sector. Moreover, the lesson in Negros shows that there is a need to assess each policy very carefully because the government does not only invest on power but also provide incentives or disincentives for the private sector to react. FIT is a good solution for wind, biomass and hydro, but for solar which has a disruptive technology development, it may not be the best solution. 6. On incentivizing private sector engaged or who wants to engage in RE/Sustainable Energy Mr. Myroshnychenko, World Bank: Playing in transparency is a key condition given the keenness and willingness of the private sector in providing capital for RE. While technology is developing fast and cost is rapidly going down, the right policies and regulations need to be set in place.


7. On encouraging more private companies to participate Dr. Menke, ASEP: There are various relationships in market development. For instance, the German government designed its policies in such a way that it would be able to bring more energy participants in the market. And for that, the design of policies should gear towards encouraging more companies to participate and creating more opportunities to be able to achieve the country’s target under its energy reform agenda. Mr. Montenegro, Mindanao Development Authority: The reality on the ground is that, different needs require different solutions. Hence, there is no one size fits all, especially in ARMM areas, where development of different approaches has to go hand-in-hand with peace process. Since the passage of EPIRA, power has been led by the private sector and although the government is taking the lead in providing electrification services, the ability of sustaining such service remains a challenge especially for the electric cooperatives. And the current paradigm shift in Mindanao shows that many of the investors are looking on smaller/bite-sized systems to be able to serve 12 more hours in off-grid areas. Thus, the government should take advantage of this in order to encourage more players in the energy sector. Mr. Myroshnychenko, World Bank: In the case of ASEP, the 40,000 SHS will be provided by the private sector. However, the private sector needs to work with the electric cooperatives to capture the market, which is a first step in developing such mechanism to become sustainable in the long run. 8. Is there a need to redefine rural electrification, from just building the transmission lines to having a

stable, reliable and affordable energy supply? Mr. Silvano, NEA-ORED: Initially, NEA defined rural barangay electrification as only getting to the center of the barangay, however, the institution wants to redefine this in terms of going as far as it can reach to further understand the different market segmentations. Therefore, several tiers in the energy planning aim to address these market segmentations. In fact, mini-grid and SHS are already included in the rural electrification program of NEA. To conclude the panel discussion, Ms. Hing-Lay gave emphasis on the energy paradigm shift currently happening, and while challenges are immense, there are a lot of opportunities both at the national and local levels. With the support from the EU, she said it is impossible for the country not to leapfrog from its target on energy reform.

Closing Remarks The end of the panel discussion concluded the event. Ms. Hing-Lay thanked all the participants for attending the event and hoped for a successful implementation of the country’s energy reform agenda through the partnership of EU and the Philippines.


Annex 1: Agenda

European Union


"Electricity for a Better Life" 7 October 2016, 8:30 am - 1:30 pm, Makati Shangri-La

Agenda

08:30 – 09:00 AM Registration (Manila A and B)

09:00 – 09:30 Welcome and Opening Remarks

H.E. Franz Jessen, Ambassador of the European Union to the Philippines

Secretary Alfonso G. Cusi, Department of Energy

09:30 – 09:45

09:45 – 10:00

Presentation on the Access to Sustainable Energy Programme (ASEP) Undersecretary Felix William B. Fuentebella, Department of Energy Ceremonial Launch of ASEP

10:00 – 10:15 Keynote Address 1

Senator Loren Legarda

10:15 – 10:30 Keynote Address 2

Prof. Dr. Ing. Christoph Menke, Strategic Advisor, ASEP

10:30 – 10:45 Coffee Break

10:45 – 11:45

11:45 – 12:00 PM

Panel Discussion

"Renewable Energy for Rural Electrification: Best Practices and Viable Delivery Mechanisms" Panelists:

Mr. Roderick Planta, Director, Infrastructure Staff, National Economic and Development Authority Mr. Romeo Montenegro, Deputy Executive Director, Mindanao Development Authority Mr. Ernesto Silvano, Jr., Head, Office for Renewable Energy Development,

National Electrification Administration

Mr. Florian Gottein, General Manager and Executive Director, European

Chamber of Commerce of the Philippines

Mr. Yuriy Myroshnychenco, Senior Energy Specialist, World Bank Prof. Dr. Ing. Christoph Menke, Strategic Advisor, ASEP Open Forum

12:00 – 12:15 Wrap-up

11:00 – 12:00 NN Press Conference (Mandaluyong Room)

12:15 – 1:30 Lunch

*Moderator: Regina Hing-Lay, Bloomberg TV Philippines


Annex 2: Participants’ List

No. Organization Name Gender

EU Ambassadors, Heads of Mission; EU Delegation

1. Embassy of Austria Josef Muellener M

2. Embassy of Austria Lisa Koscak F

3. Embassy of Belgium Xavier Leblanc M

4. Embassy of Czech Republic Benjamin Ziga M

5. Embassy of Denmark Jan Top Christensen M

6. Embassy of Denmark Rohima Sarra F

7. Embassy of France Laurent Estrade F

8. Embassy of France Thiery Mathou M

9. Embassy of Germany Dr. Andree Buhl M

10. Embassy of Italy Carlo de Rosa M

11. Embassy of Italy Massimo Roscigno M

12. Embassy of Netherlands Jaco Beerends M

13. Embassy of Netherlands Marion Derckx M

14. Embassy of Spain Juan Pita M

15. Embassy of Spain Luis Calvo M

16. Embassy of Spain Pedro Pascual M

17. Embassy of United Kingdom Asif Ahmad M

18. Embassy of United Kingdom Roslyn Arayata F

19. European Union Delegation Franz Jessen M

20. European Union Delegation Gabriel Dayre M

21. European Union Delegation Noa Sainz-Lopez F

22. European Union Delegation Matthew Yabut M

23. European Union Delegation Rose Pamittan F

24. European Union Delegation Simone Rolfe F

25. European Union Delegation Thelma Gecolea F

26. European Union Delegation Willy Hick M

Government Agencies

27. DOE Alicia De Guzman F

28. DOE Araceli Soluta F

29. DOE Bayani Agabin M

30. DOE FWB Fuentebella M

31. DOE Jesus Posadas M

32. DOE Mario Marasigan M

33. DOE Rosalina T. Rapi F

34. DOE-EPIMB Mylene Capongcol F

35. DOE-EUMB Patrick Aquino M

36. DOE-EUMB/EECD Art Habitan M

37. DOE-OUSEC Raul Aguilos M

38. ERC Sharon Montaner F

39. League of Provinces of the Phils. (LPP) Angelica Sanchez F

40. National Commission on Indigenous Leonor Oralde-Quintayo F


Peoples

41. NEA-ORED Jayson Corpuz M

42. NEDA Christine G Danao F

43. NEDA Roderick Planta M

44. NGCP Anthony Almeda M

45. NGCP Darryl Lou Ortiz M

46. NGCP Mark Joseph Andeo M

47. NPC Edmundo Veloso Jr M

48. NPC Urbano Mendiola Jr. M

49. PNOC-Renewables Arwin Ardon M

50. PSALM Lourdes Alzona F

51. Senate Office Loren Legarda F

52. Senate Office of Sen. Legarda Jene Fulgencio M

53. Senate Office of Sen. Legarda Lyka dela Cruz F

54. Senate Office of Sen. Legarda Rachel Sibugan Herrera F

55. Transco Generoso Sene M

Industry Players (ECs, Utility Association, QTPs, NPPs)

56. AMRECO/SIARELCO Sergio Dagoc M

57. Bantayan Island Electric Cooperative Lee Rivera M

58. Batalec II Arvin Barbosa M

59. BISELCO Ruth Galang F

60. CELCO Emmanuel Suarez M

61. DASURECO Godofredo Guya M

62. LUBELCO Precila Balibay F

63. MARELCO Gaudencio Sol Jr M

64. ORMECO Patrocinio Panagsagan Jr M

65. ORMECO Ronie Morales M

66. PHILDECA Wendell Ballesteros M

67. PHILFECO/NUVELCO Narciso Salunat M

68. Province of Siquijor Electric Cooperative Emely Gom-os F

69. Province of Siquijor Electric Cooperative Laureen Malolot F

70. ROMELCO Rene Fajilagutan M

71. SIASELCO Althea Anuddin F

72. Sulu Electric Cooperative Peraida Jalani F

73. SURELCO Claudia Pondales F

74. SURNECO Narciso Caliao Jr. M

75. SURNECO Virbuen Ladaga M

76. Tawi-tawi Electric Cooperative Habibiya Sangoyo F

Private Sector (Business, Energy Innovators, Suppliers)

77. Aecid Spanish Coop. Carlos Gallego M

78. Aecid Spanish Coop. Ignacio Cabria M

79. AKS Italian Cooperation Carlo de Rosa M

80. ASEI Markus Dietrich M

81. BDO Alba Romeo and Co. Menchie Briones F

82. Bronzcoak Phils. Don Mario Dia M


83. CSI Energy Solutions Intl Laurie Navarro F

84. European Chamber of Commerce of the Philippines Archie Diaz M

85. European Chamber of Commerce of the Philippines Florian Gottein M

86. Gigawatt Power Inc Anthony Shibley M

87. Greenlight Planet Sanaullah Fathi F

88. Hybrid Social Solutions, Inc Jim Ayala M

89. Hybrid Social Solutions, Inc Julius Bautista M

90. ICF Gabriella Bazzano F

91. ICF Ian Collins M

92. ICF Ravi Kantamaneni M

93. IED-WB PVM Salome Soriano F

94. La Camara Barbara Apraiz F

95. Makati Business Club Paolo Montero M

96. MATEC Caldwell Hoey M

97. One Renewable/REAP Erel Narida M

98. OPI Jefferson Yao M

99. PAMATEC/European Chamber of Commerce of the Philippines Hubert D' Aboville M

100. Pazifik Power Wilhelm Hug M

101. Power One Ma. Cristina Yrang F

102. Powerhive Erwin Tindoc M

103. Powerhive John Herrman M

104. PowerSource Lumen Balboa F

105. PowerSource Victor Ceniza M

106. PV Energie Brenda Baylon F

107. Quisimbing Torres Felix Sy Jr M

108. SIDCOR Mark Alburo M

109. Spanish Chamber of Commerce Mylyn Garcia F

110. TOFI Ricky de Castro M

111. UPC Renewables Logan Knox M

112. UPC Renewables Mark Tagum M

113. WEC Japhet Kariuki M

114. Wenergy Power Pilipinas Allen Ramsundersingh M

115. Xilia Rene Moerman M

Development Partners

116. AFD Cynthia Mela F

117. GIZ Bernd-Markus Liss M

118. GIZ Ferdinand Larona M

119. GIZ Michael Vemuri M

120. GIZ-ASEP Prof. Dr. Christoph Menke M

121. IFC Hanna Pacua M

122. JICA Amanda Bacani F

123. JICA Chihiro Baba M

124. UNIDO Jose Ernesto Wijangco M


125. UNIDO Fakhruddin Azizi F

126. UNIDO Oscarlito Malvar M

127. USAID B-Leaders Divina Chingcuanco F

128. World Bank Ronaldo del Mundo M

129. World Bank Yuriy Myroshnychenko M

Banks & Financial Institutions

130. Land Bank of the Philippines Cecilia C. Borromeo F

131. Oikocredit International Maria Theresa Pilapil F

132. Philippine National Bank Allan Ang M

Academe & CSO (NGOs)

133. Asian Institute of Management Fernando Y. Roxas M

134. Biomass Renewable Energy Alliance Bert Dalusung M

135. De La Salle University Alvin Culaba M

136. Development Academy of the Philippines Mary Sagapon F

137. Mapua Institute of Technology Jonathan Salvacion M

138. Phil. Energy Efficiency Alliance Alexander Ablaza M

139. Preferred Energy Inc. Grace Yeneza F

140. University of the Philippines Jay Layug M

141. WWF Raphael Dorilag M

Press/Media

142. Bloomberg TV Philippines Regina Hing-Lay F

143. Business World Victor Saulon M

144. Daily Tribune Joyce Rocumora F

145. GMA 7 Don Morales M

146. GMA 7 Sonny Tiulu M

147. GMA News Online John Ted Cordero M

148. Malaya Jed Macapagal M

149. Manila Bulletin Madelaine Miraflor F

150. Philippine Star Danesa Rivera F

151. PNA Sammy Martin M

152. Radio Veritas 846 Rey Letran M

153. SMNI Pinas Ternijane Bumanlag F

154. Sunshine TV Janette Africano F

155. TV 5 Michelle Ople F

156. TV 5 Rhic Dizon M

157. TV 5 Ric Dreon M

158. TV 5 Teddy Balanza M

Organizing Committee

159. GIZ-ASEP Ernesto Terrado M

160. GIZ-ASEP Josephine Mangila-Tioseco F

161. GIZ-ASEP Irma Larona F

162. GIZ-ASEP Abigael dela Cruz F

163. GIZ-ASEP Kristine Anne Urquia F

164. GIZ-ASEP Ellen Doroja F

165. GIZ-ASEP Brando Tioseco M


166. GIZ-INS Florian Seeger M

167. GIZ-INS Georg Seidl M

168. GIZ Office Manila Evelyn Anago F

169. GIZ Office Manila Keziah Faith Calaranan F

170. GIZ Office Manila Andrea Katerina Llave F


Annex 3: Keynote Address

Annex 3.1: Keynote Address of Senator Loren Legarda

OFFICE OF SEN. LOREN LEGARDA

2/F Rm.209, Senate of the Philippines, GSIS Bldg. Pasay City www.lorenlegarda.com.ph

Speech Pls. Refer to: Tere Robenta

October 7, 2016 0928-5046017

Keynote Address of Senator Loren Legarda


7 October 2016 | Makati Shangri-La Hotel Allow me first to congratulate the organizers of the 4th EU-Philippine Meeting on Energy. This meeting could not have come at a better time as our government is currently undertaking a review of the Philippine energy policy. I also welcome the launching of the “Access to Sustainable Energy Programme (ASEP)” which seeks to assist the Philippine Government towards meeting its rural electrification targets through renewable energy and energy efficiency interventions. State of Philippine Energy There are varying accounts on electricity access in the country. The International Energy Agency (IEA) estimates that 79% of the population have access to electricity[1]; while the World Bank places it at 87.5%[2]. Let us drill down these figures further and we will discover that across geographic areas, the most impoverished -- both in access to electricity and economic opportunities – is Mindanao. The country's electrification profile shows that 89% of households in Luzon have power, 79% in the Visayas, and a very low 56% in Mindanao.[3]

http://www.lorenlegarda.com.ph/

https://mg.mail.yahoo.com/neo/launch?.rand=7416eh2erpvs9#m_3659477585580578229__ftn1




What are these figures telling us? The poor are particularly disadvantaged when we speak of accessing the most basic necessities, including electricity. Most of those who have no access to electricity primarily live in the rural areas. While urban electrification stood at 94%, rural electrification in the country stood at a low of 73%. According to the DOE, “the remaining 4.4 million unelectrified households are generally located in the rural and remote areas of the country, as well as in the outskirts of Metro Manila and Davao City.” A study done by UNICEF shows that 6.5 million Filipino children or almost 2 out of 10 children are living in homes without electricity. Again, most of the children were from rural areas.[4] Lack of access to electricity is a fundamental issue that keeps our poor in the bondage of poverty. Education needs electricity. Functioning health clinics and pumps for water and sanitation require electricity. The economic life of a community necessitates electricity. Access to Electricity and Development Energy drives economic growth and yet 1.1 billion, globally, have no access to electricity. Asia accounts for 615 million. The Philippines accounts for 21 million people with no access to electricity.[5] Access to electricity correlates with economic development. People who have no access to electricity are consequently deprived of the opportunities that can help improve their welfare. Eleven of the twenty poorest provinces in the Philippines are in Mindanao, including Maguindanao, Bukidnon, Sultan Kudarat, Zamboanga del Norte, Lanao del Norte, North Cotabato. These are the provinces with some of the lowest household electrification rates in the country. In Maguindanao, only 21.8% of households have access to electricity, and in Sultan Kudarat, only 36%. Growth is difficult to imagine without energy.




The Philippine Energy Plan for 2016-2030 outlines the target of 100% household electrification by 2020 and tripling of renewable energy installed capacities by 2030. As Chairperson of the Senate Finance Committee, I fully support these targets, but would hasten to add that these electrification goals would need to be aligned with a low-carbon objective in the energy sector. Energy that does not take into consideration the needs of future generations, can only destroy and not build.

Energy security and energy access are vital goals, but we should not lose sight of the more compelling goal of ensuring sustainability and resilience as we seek to provide for the basic needs of our people, including electricity. The Philippines is said to be one of the strongest economic performers in the region; but 26 million Filipinos remain poor, with almost half, or a little more than 12 million, living in extreme poverty. Most of them have no access to electricity. This brings me to the point I made at the onset. Development, progress and quality of life cannot be the exclusive domain of a few. Progress brings immense opportunities, but unless universal access to electricity is achieved, the prosperity that economic growth aims to deliver will amount to nothing but an empty promise. Not Just Electricity, but Clean and Sustainable Electricity

The theme of your meeting, “Electricity for a Better Life,” captures the essence of my message. Deprivation happens when one is denied access to basic needs, including electricity. Destruction, however, happens if electricity is provided without regard for its impact on our environment. Clearly, the sustainable development-energy nexus requires an urgent examination of how the country can tap on cleaner forms of energy to provide for the region's requirements in a sustainable and inclusive manner.


It is for this reason that I welcome the ASEP for it offers a definitive pathway to universal access to electricity under a sustainable framework. There are two points I wish to make as the ASEP is pursued:

First, providing our rural poor with access to electricity is a major challenge, but given technological innovations in energy and the abundance of indigenous energy resources in these areas, achieving universal access to clean energy is within reach. Clean and indigenous energy sources abound in our rural areas. Let us develop these to provide energy access among the poor.

Second, it is time to walk the talk. We cannot promote a low carbon future, as called for in the Philippine Energy Plan, in isolation from the bigger picture of building a sustainable future. As a Filipino, my resolve on this subject is deep and personal. The Philippines bears much of the brunt of climate change. The United Nations ranked our country the fourth in the world among countries hit by the highest number of disasters over the past 20 years, many of which are weather-related disasters. Only the uninformed will reject the link between the planet’s changing climate and extreme weather events. Renewable Energy and Energy Efficiency

In the Philippines, earlier estimates indicate that we have some 246,000 megawatts of untapped renewable energy capacity. Failure to develop these capacities would be unforgivable. We need to focus on promoting the growth of the low-carbon economy as a means to create jobs and curb carbon emissions. To further support the country’s low-carbon energy thrust, I introduced a bill that will institutionalize policies on energy efficiency and conservation. Energy efficiency has the greatest potential to reduce the level of energy use, thus minimizing environmental hazards emitted by coal-fired power plants.


Conclusion

Finally, allow me to offer some insights, which I hope you will consider as you undertake the ASEP. First, while it is important to focus on meeting rural electrification targets by means of renewable energy and energy efficiency, let us not forget to train our sights on the bigger goal -- which is to improve the livelihood and living conditions of the poor, particularly those who currently have no access to electricity. As such, it is important that concrete actions that capacitate communities for economic activities are also pursued. Second, let us be sensitive and cognizant of the needs of the communities we want to serve. While it is true that providing access to electricity to these communities will enable them to harness the vast development opportunities that electrification brings, designing solutions would require the cooperation of the community. Do not just provide and deliver the tools to communities, but rather, build with them. Lastly, do not create a mindset that electricity is free. Instead, help create a culture of responsibility among the recipient communities. We are grateful for your assistance, but giving requires that we enable and empower communities to assume responsibilities, not in the future, but beginning the day we start sitting down with them to discuss the help we want to extend to them. Thank you and I wish you success in this programme.***

[1] International Energy Agency, Southeast Asia Energy Outlook 2015.

[2] http://data.worldbank.org/ indicator/EG.ELC.ACCS.ZS

[3] 26th EPIRA Implementation Status Report

[4] UNICEF Philippines, How Access to Basic Needs Eludes Poor Children, Policy Brief 2015.

[5] International Energy Agency, Southeast Asia Energy Outlook 2015

-- Office of Senator Loren Legarda RM.209, Senate of the Philippines, GSIS Bldg. Pasay City Philippines 833-1434 http://www.lorenlegarda.com.ph

https://mg.mail.yahoo.com/neo/launch?.rand=7416eh2erpvs9#m_3659477585580578229__ftnref1


http://data.worldbank.org/indicator/EG.ELC.ACCS.ZS




http://www.lorenlegarda.com.ph/


Annex 3.2: Keynote Address of Prof. Dr. Christoph Menke, ASEP Advisor

How Worldwide Energy Developments support

Access to Sustainable Energy – Keynote Address

Christoph Menke (Prof. Dr. – Ing.)

Strategic Advisor to EU ASEP

Manila, October 7, 2016

Framework for Access to Sustainable Energy

Economic development is a requirement for Peace, but Peace is needed

for economic development as well

Reliable & affordable electricity is one of the key preconditions to

economic development for rural communities

Thanks to advances in energy technologies new possibilities are finally

available

Off-grid electricity sector is receiving a new worldwide push

Sustainability of energy access programs needs more than technology: new business models, which are available due to new information/communication (IC) technologies.

4 Clean Energies - Disruptive Technology Trends

Solar Photovoltaic (PV) costs fell dramatically in the last years and will continue to fall further!

o Germany: by 80% in 10 years

o World’s lowest bid: Abu Dhabi, 09/2016: 1,16 PHP/kWh for 350 MWp

Energy Storage Technologies seem to follow the learning curve of PV module costs

Electrical Vehicles (EV) are entering the markets

Self driving cars and shared mobility concepts start Will lead to massive “Clean Disruption” of energy and transportation sector by 2020 -2030

Worldwide Energy Transition

Investments in renewable power have outplayed conventional power by capacity additions since 2012

No indication that this trend will reverse due to continued dramatic cost

reduction, especially of PV


PV Market will grow rapidly: US: > 10 GW PV under construction;

China: until 2020 > 135 GW planned • Energy storage is becoming

competitive very soon!

Consequences:

Disruption of existing power generation!

Change of electricity markets

Emergence of new business models/market participants European Energy Transition

Most European countries are turning to renewables in a substantial scale and prepare for more due to:

Development of costs of technologies

Economic development (GDP contribution; Jobs/MWh)

Energy Security aspects

GHG impacts

Renewable electricity generation EU is at 29% of total gen.

Increasing share of vRE (Wind and PV)

Denmark > 42% of total electricity generated from wind

Germany > 29% RE generation (> 6% from PV)

Energy Transition in the Philippines

Generation from RE is still at 30%

Successful start of the RE Law implementation

Development of private sector in renewable energy market

Cost reduction of recent RE systems due to learning curve

Upcoming task: Getting flexibility into the existing power system to realize

lowest system costs in the long run!

Necessary Measures:

Increase flexibility options on supply and demand side

Need to adopt grid management

Improve forecasting supply and demand to reduce reserve power

Improve power planning and integrate different parts

Adapt electricity market to cope with requirements

Energy Challenges in the Philippines - 1

Electricity supply is still partially below demand

Rapid economic development requires more power!

2015 > 4,6% demand growth => 821 MW Energy Efficiency is good compared to other ASEAN countries, but a lot

remains to be done => National EE Road Map

How to satisfy demand? in light of:


o Lowest costs/kWh now and in the future?

o Energy security (Reliability, imports, price predictability)

o Worldwide RE power technology developments and their impact on

power markets, especially PV?

o Access to climate fund but with implied carbon emission restrictions?

New approach to Energy issue?

Three Ss for Power:

1. Stable (reliable)

2. Sustainable

3. “Sulit” (value for money)

Reduce burden to consumers and businesses

Support rural development through rural electrification

Focus on Mindanao and especially ARMM

Excellent, but in the decision taken now, we need to consider the long term

implications of the decisions

We shall consider the impact of worldwide “paradigm change” in energy

technologies and their implication

Energy Challenges in the Philippines - 2

The country is at a cross-road:

More conventional power and/or more renewables? How much is too much

from Coal, Gas and RE?

Adopting to new paradigm requirements (flexibility, distributed generation,

batteries and smart grids) or continue existing pathway for how long?

What are the consequences in the near & in the far future if we move is too

late, too little?

Who will cover the costs of stranded investments or power plants that can

not operate anymore because they are not flexible?

How do we distribute the transition costs fair and socially acceptable?

Who shall pay for the learning and the transition costs?

Challenges in Rural Electrification

Currently 89.6% of households (HH) are energized

Until end of 2017 additional 800,000 HH are targeted 300,000 HH can be connected to the grid 500,000 HH will be served by off-grid systems Stand-alone systems (e.g. household-level solar systems)

Micro-grids which are mainly powered by diesel generators

Cost to operate diesel grids are high and lead to a burden to the consumer through UC-ME


Special focus: Mindanao

Most of the un-energized households are located in remote off-grid and/or conflict affected areas in

o Mindanao

where 26% of households are still without electricity

Even where access to electricity exists frequent power cuts/brown outs hamper economic development!

Peace and Electricity are both needed to support economic development for Mindanao

Changes in technology & business models can jumpstart access to sustainable energy

PV Systems on Solar Home level are reliable and affordable

Batteries & charge controllers finally work

PV Hybrid systems & Mini Grids are reliable and cost effective!

IC technologies and mobile internet offers opportunities for better management of

systems

Technology: Maintenance and service

Business operation: Prepaid systems & mobile payment

Productive use of electricity has wider opportunities

Internet based business • Mobile banking, etc.

EE technologies are ready: LED, Efficient appliances, etc.

ASEP – Objective and Setup

generate more electricity from renewable energy, increase efficiency of energy use, and

increase access for the poor to affordable, disaster resilient energy

ASEP’s three Components:

Technical Assistance and Capacity Building

World Bank – managed Investment Support

Call for Proposals for Pro-Poor and Climate-Resilient Innovative Energy Solutions

Opportunity: ASEP testing the way forward

60 Mio EUR to establish sustainable ways of providing electricity for socio-

economic development to underserved and poor households

Solar Home Systems via the PV Mainstream (WB managed)

Hybridization of existing diesel mini grids (EU managed)

Renewable based mini-grids for unserved communities (EU)


TA and capacity building to DOE, NEA and ECs to plan, implement and monitor the electrification program

Expected output of ASEP is, beside concrete electrification numbers, to develop and confirm viable business models and success factors for sustainable energy access and services

The future is bright - Electricity for a

Better Life is now finally possible

Reasons

Key technologies are now finally ready for use (PV, batteries, controller, LEDs, ICT,

etc.)

Innovative business solutions exist and are proven

Private sector is willing to invest into off-grid solutions, if:

Policies are predictable and reliable

Regulation is adequate and supportive

Administrative requirements are minimized

Financing is available at acceptable costs (WACC)

Energy Efficiency is built in through modern technologies

The future is bright

- Electricity for a Better Life

Thank you very much for your kind attention!

Christoph Menke (Prof. Dr.- Ing.)

[email protected]


Annex 4: An Overview on ASEP by DOE Undersecretary F.W. Fuentebella

The EU-Assisted Access to Sustainable Energy Program (ASEP):

An Overview

Undersecretary Felix William B. Fuentebella Department of Energy


7 October 2016, Makati Shangri-La

Republic of the Philippines

DEPARTMENT OF ENERGY



ELECTRIFICATION ROADMAP

% household 90

electrification by 2017

HEDP

SEP *

% 100

household

electrification

by 2020

* NEA has completed electrification of all sitios targeted under the PNoy Administration

Medium - Term

(2018 - 2020)

Long - Term

(2021 - 2030)

Short - Term

(2016 - 2017)

• Energize 3,150 sitios in 2016

• Energize 6,321 emerging sitios in 2017

Energize an average of 4,000 sitios per year until 2030

FU

LL

EL

EC

TR

IFI

CA

TI

O

N

N

AT

IO

N

WI

DE

OVERALL OBJECTIVE

BY 2030


EU ASEP

Programme


Specific Objectives of ASEP that Address DOE Thrusts

In Rural Electrification and Energy Efficiency

100,000 - 150,000 poor households in remote areas will be

electrified, and/ or utilize innovative energy solutions

20 Megawatt (MW) of new clean RE generation will

be installed

GHG emissions from the equivalent to that discharged by one

50 - MW coal fired power plant will be avoided



Comp. 1: TA & Capacity Building for Reform

Sub-components

Thematic Technical Assistance:

Rural Electrification

Energy Efficiency

Cross-Cutting Technical

Assistance:

Capacity Development

IEC Activities

Implementation Support to other ASEP

components

ASEP Secretariat Role

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External Fund Source EU

- approx. EUR 7 million

Type of Assistance

Technical Assistance

Implementation Management

Directly managed by EU

Delegation

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Investment: Renewable Energy Hybrids & Minigrids— ASEP Call for Proposals Component

Innovative clean technologies and business models for remote, decentralized areas. Priority: ARMM communities…



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