Is wind energy poised to take off in the Philippines?

Recent pronouncements by various investor groups seem to indicate that wind energy use for power generation in the country is about to blow hard.

Three groups have recently submitted proposals to the Department of Energy (DOE) to undertake wind power projects in various parts of the country. These are: Energy Development Corporation (PSE: EDC) with proposed projects in Burgos, Ilocos Norte; Northern Luzon UPC Asia Corp. in Pagudpud, Ilocos Norte; while PetroEnergy Resources Corp. (PSE: PERC) has identified sites in Sual, Pangasinan, and Nabas, Aklan.

The proposals of these companies have pre-qualified according to the requirements of the DOE, according to Energy Assistant Secretary Mario Marasigan. The DOE is ready to give them the green light to go ahead with the projects.

Waiting in the wings include the local unit of Korea Electric Power Corp. (KEPCO) which plans to undertake renewable energy projects like wind and hydropower with the government-owned Philippine National Oil Co.-Renewable Corp. (PNOC-RC); and Trans-Asia Oil and Energy Corporation (PSE: TA) of the PHINMA group which is reported to have conducted preliminary studies.

The three committed wind projects could generate up to 200-MW of power, according to Marasigan, but this amount is but a fraction of the often-quoted 76,600 MW of wind potential the country could offer.

The growing interest in wind energy could be partly attributed to the passage of the Renewable Energy Act of 2008 which offers fiscal incentives such as income tax-holidays, tax-free importation of capital equipment, and tax-free carbon credits to RE projects. But what could accelerate the growth of such projects are the non-fiscal incentives such as the renewable portfolio standards (RPS) which require electricity distributors to source a percentage of their requirement from RE sources, and feed-in tariff scheme which tries to level the playing field in the power sector for the RE producers against traditional (fossil-fuel) generators.

These two last incentives have been credited with the explosive growth of wind energy particularly in the Unites States, Germany and Spain. However, our own similar policies have not really been given due clarification from responsible agencies of the government. Until, and only when, the implementing rules and regulations for these incentives are sufficiently clear will these companies fast-track their projects.

Northwind Development Corp., the developer and operator of the 33-MW wind farm at Bangui Bay, Ilocos Norte, has shown that given favorable circumstances, a wind project can be viable under local conditions. Aside from supplying 40% of the power needs of Ilocos Norte Electric Cooperative, the wind farm has boosted local tourism with its majestic turbines appearing in postcard pictures posted in Flickr and other websites.

But these wind energy projects can only really take-off given a push of a tail wind in the form of a clear renewable portfolio standards and an attractive feed-in tariff scheme.

The U.S. also bails out its renewable energy industry

Buried within the 400 or so pages of sweeteners that were added to the recent $700 billion bailout package for the U.S.  financial sector that has been signed into law by President George W. Bush is a provision which breathes life to an anxious nascent renewable energy industry.

This is the extension of the Production (PTC) and Investment Tax Credits (ITC) which was unexpectedly passed as part of the Emergency Economic Stabilization Act of 2008 (H.R. 1424), as the bailout plan is officially known.

For months renewable energy practitioners--developers, investors, manufacturers and would-be users--could only wring their arms in anguish as they watch the spectacle of legislators bickering among themselves whether to extend or not the tax credits.

They view these tax credits as a lifeline to the whole renewable energy industry--solar, wind geothermal, and now the marine energy technologies--before it gets to its own maturity. The provision will extend the PTC for one year and the ITC for eight years.

The other highlights of the package include:

• Eliminating the $2,000 capon the residential ITC
• Allowing utilities to obtain ITC
• Authorizing $800 million for clean energy bonds for generating facilities using renewable sources
• Creating an ITC for so-called marine energy technologies which include tidal, wave current and ocean thermal

The solar energy industry is particularly ecstatic. The legislation "will enable (solar) companies to continue to invest in American production, American jobs and America's energy independence," said Mark Finocchario, president of SCHOTT Solar.

The wind industry considers the tax credits essential to the growth of the industry. In the geothermal sector, these credits encourage aggressive growth and support rapid deployment strategy for building geothermal plants within the decade, said Brent Cook, CEO of geothermal developer Raser Technologies.

That such incentives are vital to the industry can be seen in recent history. In 1999, 2001 and 2003 when Congress didn't renew the tax credits, wind power installations dropped by 93% in 2000 and by 74% in 2004.

Prior to the signing into law of the bailout package, wind developers have been putting projects on hold because financial institutions have been reluctant to fund these projects with only a glimmer of hope that the tax credit will be renewed, said Leon Steinberg, CEO of National Wind, a leading wind energy developer.

The solar industry relies on a 30% credit on new investments. If the credits were not renewed, the solar market could collapse, and solar-technology firms could end belly up,  according to an industry insider.

Our honorable senators and House representatives should take heed of the lessons from the U.S. situation. Their dilly-dallying of passing the renewable energy bill has cost the country enormous amount of opportunity losses.

Now that the bill will become law upon its signing, our legislators should realize that their job has only begun. We need to put some substance into the skeleton bill that they have just passed.

Reading the Pickens manifesto

Amidst great fanfare and hoopla, the much-touted Plan to wean America away from foreign oil by dotting the landscape with thousands of wind turbines was finally formally unveiled last Tuesday in Sweetwater, Texas.

 The Pickens Plan, as the audacious move has come to be known, could have been easily dismissed as a pie-in-the sky final wishes of an 80-year-old senile man in his twilight years were it not for the fact that the speaker during the roll out is T. Boone Pickens, the legendary Texan synonymous with oil, corporate raider, philanthropist, greenmail artist and shareholder-activist par excellence.

 The logic of his manifesto—the whole plan is succinctly written a la Marx-- is compelling.

 "We're paying $700 billion a year for foreign oil,” he declares. The whole strategy is to displace completely the 22% share of electricity production from natural gas with wind farms.

 And what to do with the home-produced natural gas?

 It should be pumped into the fuel tanks of the millions of vehicles crisscrossing the interstate highways and metropolitan areas of America. He is convinced that natural gas is the cleanest and most viable option to replace the hydrocarbon-based fuels used in most vehicles.

 He laments that of the approximately 7 million vehicles now using compressed natural gas (CNG) only 150,000 are in America’s roads. He traces the low conversion mainly to the distribution problems (e.g., lack of refilling stations and storage) and cost which his Plan also takes into consideration.

 And to silence detractors of his intentions, he is putting his own money where his mouth is: some $2 billion to put up the world's largest wind farm in nearby Pampa, Texas through Mesa Petroleum, a major energy company he owns—and that is just a start.

 Previous to the formal launching, some critics have obliquely pointed out that the Plan would only line up the coffers of his energy hedge funds.

 But he does not need the money. After all, he is already 80, ranked No. 117 among America’s richest by Forbes magazine and has some $4 billion in his pocket.

 He wants to enlist the whole American population--and to make sure that his movement will not be tainted with politics, he steers clear from political colors. He wants the energy question to be the No. 1 issue in the current presidential campaign, and is prepared to tangle with Democrat hopeful Barack Obama and Republican stalwart John McCain.

It is too early to pronounce a verdict whether the Plan is viable in the long term or not, but the road map is clear. And America is taking notice.

 In the few hours since the Plan was publicly launched, some 300,000 have signed up to come aboard Pickens’ gravy train.

 And why should we take notice of the Pickens Plan?

 It is because our energy situation is far worse. We are completely held hostage by foreign oil and our own energy plan, if we could call it that way, is a mishmash of ill-defined targets and much wishful thinking.

 For example, expecting that moneyed foreign investors would put up energy projects given the growing power demand without clearing up the bottlenecks in setting up major businesses in the country and without stabilizing the political and economic uncertainty is certainly expecting too much.

 Pickens laments that the energy issues have not been addressed by both the Republicans and Democrats whenever any of them is in power. He should be invited here to speak to our leadership and to our lawmakers who would rather bask in the glory of media talking about unsubstantiated allegations of roads to nowhere or overpricing of housing deals; and when not pointing accusing fingers at each other, are busy castigating foreign investors.

 Our esteemed senators could not even pass a rudimentary renewable energy law.

 We need a home-grown T. Boone Pickens to shake up our lethargic bureaucracy to address the current and the more dangerous looming energy crisis before it is too late.

Vanadium battery catches the sun and the wind

By J R Ruaya

When the wind dies down or the sun stops shining at night or during cloudy days, the solar collectors and wind turbines stop working. There is just no cost effective way of storing energy from these sources.

Not anymore.

A recent development of energy storage using vanadium electrochemical cells is now about to break into the commercial realm.

In a solar installation photovoltaic solar panels catch the sun’s energy and convert it into electricity. This is then stored into the vanadium battery so that the energy can be used at a later time or pumped into the grid.

A vanadium battery, which works similarly as the familiar battery used in toys and flashlights, has distinct advantages over the other battery cells in the target application. The main advantage is it uses the same elements in both half-cells which eliminates cross-contamination of the two half-cell electrolytes during prolonged use. The positive and the negative half-cells are separated by a proton exchange membrane.

It has high efficiencies of 80 – 90 % in large installations. Furthermore, the costs rapidly goes down as the installation is scaled up. And maintenance is easy.

The battery can also be fully charged or discharged. In cases where time is the essence, the electrolyte solutions can simply be replaced rather than waiting for recharging.
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Sidebar:

The electrochemistry involved is not too difficult to understand even by undergraduate students of chemistry. The schematic is shown below (courtesy of the University of New South Wales):

The half-reactions are:

At the positive electrode:

VO2+ + 2H+ + e = VO2+ + H2O E° = 1.00V

At the negative electrode:

V3+ + e- = V2+ E° = -0.26 V

The standard cell potential E° (cell) is 1.26 Volts at concentrations of 1 mole per litre and at 25°C, but under actual cell conditions, the open circuit cell voltage is 1.4 Volts at 50% state-of-charge and 1.6 Volts at 100% SOC (Skyllas-Kazacos, 2002, p. 2).
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Early demonstration projects include a solar-powered housed in Thailand, an electric golf cart, and a back-up power system for a nuclear submarine.

In the United States, which is playing catch up with the technology, a 15-kW photovoltaic installation has just been put up at the Lowry Park Zoo in Tampa, Florida jointly by Tampa Electric and the University of South Florida’s (USF) Power Center for Utility Explorations (PCUE) at a cost of approximately $ 575,000 (Tampa Electric, 2008).

Earlier in June, two similar 5 kWx4hr systems have been installed at the downtown St. Peteresburg campus of USF and at Albert Whitted Park in the same city by the university and Progress Energy of Florida (VRB, 2008).

The vanadium redox battery has been developed and its use pioneered at the University of New South Wales. An engaging historical and scientific account of its development has been presented by Skyllas-Kazacos (2002).

With the technology now available what remains is the development of policy initiatives as embodied in the renewable energy bill still pending in Congress for the solar and wind power to take off in the Philippines.

References

Skyllas-Kazacos, M. (2002, July). An historical overview of the vanadium redox flow battery development at the University of New South Wales, Australia, 13. Retrieved August 19, 2008, from http://www.vrb.unsw.edu.au/overview.htm

Tampa Electric (2008, August 4 news release). Tampa Electric, USF partner with Tampa’s Lowry Park Zoo to develop new renewable energy project. Retrieved August 19, 2008 from http://www.tampaelectric.com/news/article/index.cfm?article=466.

VRB Power Systems Inc. (2008, June 9 press release). Progress Energy and University of South Florida’s Power Center for Utility Explorations unveil two 5kW x 4hr VRB Energy Storage Systems as part of SEEDS project . Retrieved August 19, 2008 from http://www.vrbpower.com/docs/news/2008/news_20080609.pdf

The answer is, blowing in the wind?

By J R Ruaya

Energy and Chemistry Consultant

Recently, the PNOC-Energy Development Corp. (PNOC-EDC), majority-owned by the Lopez family, announced that it will push through with the development of wind power projects having a combined capacity of 140 megawatts (MW).

PNOC-EDC director and former Energy Secretary Vincent Perez said the new owner (Lopez group) of the company is “reviewing the feasibility of the wind power projects”.

This was confirmed by Department of Energy (DOE) director Mario Marasigan, saying that PNOC-EDC’s wind power projects form part of the indicative power project of DOE.

As proposed, the project will be done in three phases: 42 MW for Phase I, 40-60 MW for Phase 2 and 10-20 MW for the third phase. Another 20-MW of wind power project is also being eyed by the company in Ilocos Norte and elsewhere in the country.

PNOC-EDC' s project is not the first wind energy project in this country.

The first commercial wind energy project is the Bangui Bay 24.75 MW project in Pagudpud, Ilocos Norte which was commissioned in May 2005 and run by Northwind Power Development Corporation. It consists of 15 turbines, and at peak load can supply up to 40 % of the electricity requirements of Ilocos Norte.

The power generated is dispatched through a 57-km 69 kV transmission lines, also owned by Northwind, for distribution by the Ilocos Norte Electric Cooperative (INEC).

So, what prompts the flurry of activities in this renewable resource-- which is a prime choice of green energy advocates, but which is deemed economically uncompetitive against traditional sources of electric power?

What has changed, aside from $120 a-barrel-oil and pressures from environmental activists, since the man from La Mancha stopped chasing windmills?

The current scenario

Consider the current situation:

* Wind power is the fastest growing energy source on a percentage basis over the past five years at 29% annually from 2001-2005 with solar a very close second;

* The amount of electricity generated from wind power has tripled in the past five years;

* Total installed wind power capacity in the United States, the largest wind developer in absolute terms in the world stood at 11,603 MW at the end of 2006, or enough to power more than 2.9 million U.S. households.

* Denmark, the pioneer in harnessing the wind, gets 18.5% of its electricity from wind sources.

* More and more countries are getting into the bandwagon, with India, China and the United Kingdom being the most aggressive.

* New, larger wind turbines (from 1 to 3 megawatts per turbine) generate 120 times as much electricity as 1980s models at one-sixth the cost.

* The cost of wind-generated electricity has fallen dramatically from 38 cents per kilowatt in the 1980s to only 4 -6 cents today.

Despite the dramatic strides attained by the industry on the economics of wind generation, it has failed to fire up the imagination of local entrepreneurs.

Benign to the environment

The overriding attraction of wind energy is of course, its negligible effect to the environment.

For example, Northwind claims that its project displaces greenhouse gases such as carbon dioxide at 46,960 tons/yr; sulfur dioxide , 802 tons/yr; and suspended particulates , 1602 tons/yr which would otherwise have been emitted from a typical fossil-fueled generating plant.

But for the hard-nosed investor on the ground, it is economics. A quick glance of comparative tables would show that wind-generated electricity cannot hope to compete in terms of cost per unit generation against the established conventional sources of energy. But like any other product, wind energy may find its proper niche given the correct circumstances.

Our archipelagic country may be the right circumstance. The grand plan of linking the major islands into a national grid is still a pipe dream. The National Transmission Corp. has only linked, via direct current submarine cables, a few major islands like Luzon, Samar, Leyte, Cebu, Bohol, Negros, Panay, Mindoro and Mindanao. That leaves other major island provinces and many other important island provinces out of the grid circulation: Palawan, Masbate, Catanduanes, Batanes, Romblon, Camiguin, Siquijor, Basilan, Sulu, Tawi-tawi - you complete the list. Other major island or groups out of the loop are Camotes, Dinagat, Coron (Palawan), Polilio, and of course Boracay, and many others.

Is there a correlation between the incidence of poverty in many of these islands and the lack of affordable power?

A blessing from a curse

The first question that pop up in the mind of a potential investor is: do we have the resource?

We are cursed by the wind of the destructive kind: an average of twenty typhoons a year. But this is not we want. The ideal site for a wind project would be where the wind blows at an accepted strength for most of the time.

The Department of Energy has already made an inventory of the wind resources of the country while the National Renewable Energy Laboratory (NREL) of the U.S.' Department of Energy has published a comprehensive wind atlas for the whole archipelago. These studies identify wind availability, wind circulation patterns, velocities, areas suitable for wind projects and other data for investors and other interested parties.

According to a study by Prof. Rowaldo del Mundo of the UP National Engineering Center (NEC), NREL puts the country's wind potential at 76,600 MW. NEC's own study, after inputting a screening criteria of (1) a wind power density of at least 500 W/m2 and (2) a transmission line cost component of a maximum 25 % of the total project cost, came up with a harnessable 7,404 MW equivalent to an estimated annual generation of 23,047 GWh/yr. This potential could come from the following number of sites: Luzon, 686 site; Visayas, 302 sites and Mindanao, 47.

More studies needed

Like any other struggling technology, wind energy still requires a lot of scientific and technological groundwork for it to become more viable.

To increase value and reduce uncertainties in wind power production, del Mundo suggests more research and development (R & D) in forecasting power performance, in "reducing uncertainties related to engineering integrity " , in "improvements and validation of standards" and on storage techniques.

At first glance, wind energy cannot be stored because if the wind stops blowing, there is no power. But this has not deterred inventive scientists and engineers from pursuing the idea.

To effect cost reduction, del Mundo would focus on (1) improving site assessments and on finding new locations (2) coming up with better models for aerodynamics, (3) developing new intelligent structures and materials (4) designing more efficient generators and converters, (5) finding novel concepts in load reduction, and (6) improving performance of stand-alone and hybrid systems. A hybrid system consists of a standard wind turbine and a back-up facility which takes over at times when the wind simply dies down.

More incentives needed

It can be done, as Northwind has shown. However, there are market and financial hurdles to overcome, as Northwind Vice President Marlon Centeno pointed out, foremost of which is the inability of the electricity from the project to compete at the wholesale electricity spot market once the wheeling charges of Transco is factored in. Northwind's project is connected directly to INEC, as earlier noted.

The upfront high cost of putting up a wind facility could be mitigated by granting more tax incentives and low- finance credit facilities not only from the government but from institutional lenders like Asian Development Bank and the World Bank.

Carbon credits and additional so-called environmental credits also helps.

Many of the incentives to make a wind and other renewable energy projects viable are already embodied in the renewable energy bill now pending in Congress. Hastening its passage would be a major step in the right direction.

Wind energy may not become mainstream in the foreseeable future, but for many of our fellow Filipinos living in smaller islands , the best hope to taste the benefits of electricity coming from a non-polluting source might just be blowing in the wind.