Transitioning toward a green and modern economy, the Board of Investments (BOI) has given a nod to the application for registration of First Ifugao Renewable Energy Corporation, as a new developer of a hydroelectric power plant in Asipulo, Ifugao to support the rising electricity demand in Luzon.
The 0.56 megawatt (MW) Likud 2 Hydroelectric Power Project is expected to start its commercial operation in September 2023, which will shore up the renewable energy (RE) sector in the country.
“The newly-approved hydroelectric power plant in Ifugao is a significant project, for the Philippines is heading toward green and modern economy. It proves that we are committed to improving the renewable energy sector of the Philippines. This is just the beginning of more green investments pouring into our country’s economy,” Trade Secretary and BOI Chairman Ramon Lopez said.
With an estimated project cost of Php185 million (USD3.5 million), the said project complied with the qualification requirements under Special Laws (Renewable Energy) of the 2020 IPP as transitional Strategic Investment Priority Plan (SIPP).
It is projected that the demand for power in Luzon will continue to increase because of the sustained economic growth of the country. Hence, building up capacity is imperative to sustain such power demand and ensure that the supply of power to consumers is unhampered. Further, the company’s 0.56 MW Run-of-River Hydro Power Project is expected to increase the required capacity addition of 16,397 MW for hydropower by 2040.
Consistent with the objectives of the national government in attaining a Clean Energy Future, the said hydropower plant will contribute to the realization of the objectives of the power generation roadmap in 2040: ensure security, resiliency, affordability, sustainability of electricity.
The project will produce electricity with fewer greenhouse gases emitted into the atmosphere such as carbon dioxide (CO2), which is among the four greenhouse gases, together with methane, nitrous oxide, and a group that contains chlorofluorocarbons (CFCs) and their replacements. CO2 is the largest contributor to climate change and is emitted whenever coal, oil, natural gas, and other carbon-rich fossil fuels are burned.
Under the Republic Act (RA) No. 9513 or the Renewable Energy Act of 2008, the firm is eligible to the grant of the incentives such as income tax holiday for seven (7) years, duty-free importation of RE machinery, equipment, and materials including control and communication equipment, and tax exemption of carbon credits.
“We are making progress regarding our goal to be a modern and green economy. This hydropower plant ushers in more business opportunities in 2022 and beyond. We encourage more investments in renewable energy in the Philippines. We in the BOI, as the leader of the country’s investment promotion agencies (IPAs), are certain that we are Making It Happen,” BOI Managing Head and Undersecretary Ceferino Rodolfo said.
With a projected average sales of Php23 million (USD440,000) during the first 10 years of its commercial operations, the greenlighted project will result in an estimated Php35 million (USD669,000) additional output to the Philippine economy as well as Php3 million (USD57,400) contribution to household income.
As the persisting pandemic has brought reduced income and job losses to many Filipinos, the project will help in easing both predicaments through job generation – approximately 100 manpower during its construction and seven (7) workers during its commercial operation.
Furthermore, the project will contribute to the required capacity addition of 73,868 MW needed to meet the National Renewable Energy Plan (NREP) target of 81,485 MW for the total installed capacity by 2040 under the Clean Energy Scenario (CES).
Aligning with the thrust of the Philippine Energy Plan (PEP), the NREP provides a cost-sensitive and demand-responsive national renewable energy program. Further, the NREP’s target for 2020-2040 is under the Renewable Portfolio Standard (RPS) goal of at least 35% renewable energy share in the total generation mix by 2030 and greater than 50% share by 2040.