Opportunities in energy cited

In the renewable energy (RE) index of the think tank’s Energy Investment Map Report, the Philippines ranked 5th out of 30 countries, with 139 points out of 180. This falls into the 120-150 bracket, which means the country has “moderate to relatively high IRR (internal rate of return) due to good market, regulatory and infrastructure conditions, moderate to high demand for new capacities and low levels of country, financing, project, technology and operational risk,” the report stated.

The study ranked 30 countries according to expected IRR for investments and associated risks.

The analysis rates the investment potential of 11 different renewable and conventional technologies and aims to give investors an overview of promising opportunities for energy investments.

“We also hope to give policymakers an understanding of how their countries compare with others in terms of promoting different technologies and encouraging investment,” PA Consulting said in its report.

In a statement on Wednesday, PA Consulting said the Philippines’ position in the index is boosted by its scores for wind, hydroelectic and geothermal energy as all three technologies scored highly in terms of investment potential.

“The Philippines is in need of new generation capacity, and with the introduction of feed-in tariffs (FIT) and an incoming RE market, renewables offer an attractive investment prospect,” Steve Thornton, energy expert at PA Consulting, said in the firm’s statement.

Topping the list in the RE index are China (146), Sweden (143), Denmark (142), and Austria (141). The bottom five are Singapore (n.a.), Malaysia (74), the United States (82), Russia (84), and Spain (94).

In the conventional energy index, the Philippines ranked 3rd with 131 points out of 180, still within the moderate to relatively high investment IRR bracket of 120-150 points.

“The Philippines scores highly for gas and coal. This reflects the need for additional generation capacity outweighing the concerns over future gas supplies,” PA Consulting said in its statement.

India topped the 30 countries in the non-RE index with 136 points, followed by Poland (133); Philippines and Ireland (131); and Switzerland (130). Meanwhile, Brazil (60); Norway (73); Singapore (75); United States (87); and Denmark (91) were in the bottom five.

“Many of the top countries for investment in conventional generation are characterised by fast-growing demand for power combined with regulatory regimes that enable long-term contracts for power from new projects,” the statement read.

Olaf Remmler, energy expert at PA Consulting, said in the statement, “Uncertainty, complex market and regulatory conditions and the rapid advance of renewable technologies all mean decision-makers must place far greater emphasis on understanding not just fundamental market conditions, but the regulatory and economic factors that will affect their projects and investments.”

The report said that the Philippines is continuing with positive market reform and is in need of considerable investments in power generation.

It also noted that the recently approved FIT for RE technologies makes investments in that sector “far more attractive.”

The report also considered the introduction of retail competition and open access (RCOA), to start June 26, and the Interim Mindanao Electricity Market, to start Sept. 26.

“Due to poor interconnection and electrification, standalone/ small-scale distributed generation offers potential investments,” the report added.

PA Consulting conducted the analysis between March and May 2013. It considered investments in new power plants and involved seven RE technologies (solar photovoltaic, concentrated solar power, onshore wind, offshore wind, hydropower, geothermal and biomass) and four conventional technologies (nuclear, combined cycle gas turbine, gas turbine and coal).

Opportunities in energy cited