Norway says RE investments depend on PHL’s openness to foreign capital

The Ambassador of NORWAY said the Philippines is a potential destination for Norwegian companies, but their interest in renewable projects here will depend on the industry’s openness to foreign investment.

“In the coming years, Norwegian companies are planning huge investments in offshore wind energy and floating solar energy and see the Philippines as a promising market,” said Ambassador Björn Jahnsen business world in an email. “However, the Philippines competes with Europe and other countries in the region, where the trend towards renewable energy sources is bigger than ever.”

“The Philippines therefore needs to put in place the right policies and should allow foreign investors more than 50% of the equity of renewable energy projects to unlock the full potential for green energy generation and high-paying Filipino job creation,” he added.

The 1987 Constitution mandates 60-40% ownership in favor of Filipinos for most renewable energy (RE) projects, excluding biomass and geothermal.

The Department of Energy has also expressed support for 100% foreign ownership of renewable energy projects to ease the transition to domestic energy sources and make it less vulnerable to disruptions in supplies of imported fuels.

“Norway supports the efforts of the Philippines to increase the production of renewable energy, not only because it reduces emissions of greenhouse gases, but also because this could lower the price of electricity in the long term,” said Jahnsen.

Norwegian companies are currently involved in Philippine hydropower and LNG projects.

Other foreign embassies have also expressed interest in investing in the Philippine renewable energy industry, including South Korea and the United Arab Emirates, awaiting news of the potential lifting of the 40% foreign ownership cap.

Sen. Rafael T. Tulfo, chair of the Senate Energy Committee, said business world in a Viber message that he supports more foreign ownership of renewable energy as “we urgently need electricity from local sources that will not be at the mercy of international problems and events like the war in Ukraine and Russia.”

The Philippines, he added, currently does not have the capital to invest in renewable energy infrastructure and taking on more foreign loans is not the best option.

“Overall, we really need to open our doors to foreign players in the renewable energy field to secure our energy resources,” he added. “Of course, this is subject to restrictions and regulations that protect our country’s economic interests.”

Mr Tulfo also said renewable energy can increase its share of the energy mix by developing technologies that make it more reliable.

“There are … battery systems that allow renewable energy generation plants to store excess energy and use it when needed,” he said. “The use of this technology would mean that the expansion of renewable energies in our energy mix would no longer have any significant disadvantages.”

The senator also cited plans to ease the process of attracting public-private partnerships for the sector.

For now, the country should prioritize hydro, solar and wind energy sources as they have become more developed, safer and more reliable over the years, he added.

Senator Ana Theresia N. Hontiveros-Baraquel said “exploration and exploitation” of foreign companies should not be allowed.

“What the country needs today is a critical shift to 100% renewable energy, not 100% ownership of our renewable energy resources,” she said business world via Viber. “Renewable energy resources from nature rightfully belong to the state and its host communities,” she added.

The country should instead prioritize proper regulation over further liberalization, she added. The development of renewable energy should lead to more decentralized and community-based energy systems using technologies such as microgrids.

“To support these initiatives, the country needs to be very active in the climate negotiations, demanding that rich polluter countries honor their commitments and contribute more to renewable energy development in the most vulnerable countries like the Philippines,” she said.

“The commitment to renewable energy needs to be stronger today to meet the 35 percent target for 2030,” she added, referring to the Philippine Energy Plan 2018-2040, which aims to increase the share of green energy in the electricity mix by 2030 .

The current energy mix consists of 37.1% coal, 34.6% oil, 16.5% solar and wind power, 5.5% natural gas, 4.5% hydroelectric power and 1.8% geothermal power. — Alyssa Nicole O Tan