Sunday, November 1, 2009

Is religion important in creating a sustainable future?

by Alan S. Cajes



There is overwhelming evidence that human beings have damaged Planet Earth in catastrophic proportions. The earth’s ecological systems are in jeopardy. The myriad water bodies are no longer teeming with fish and micro-organisms but struggle to survive against humanity’s onslaught with pollution and toxic and hazardous wastes. The lands are no longer covered with pristine and diverse vegetation but bear the brunt of the dominant species that prides itself with steel and concrete. The air is no longer the domain of the birds and the home of the clouds but is the dark shroud that brings acid rain, powerful hurricanes, and destructive typhoons. As if these are not sufficient, man altered the climate and puts his survival, including that of billion other species, in serious and seemingly irreversible risk. Foul air, dirty water, depleted resources and global warming. These are the costs and the consequences of the social, cultural, religious, economic, political and scientific achievements of the most intelligent of all species – homo sapiens.

Why is a human being capable of such horrendous and despicable evil? If he can build massive pyramids, tall buildings, gigantic ships, bullet trains, rocket ships, giant computers, why can’t s/he maintain clean air, clean water, productive lands, and intact coral reefs and forests? If he is capable of great scientific and religious thought and deep wisdom, why can’t s/he keep God’s creation from desecration? If he is capable of communion with God and the Saints, why can’t he maintain a harmonious relationship with nature?

Thomas Berry traces the root of the environmental crisis to man’s alienation from a functioning universe or a cosmos. Human beings today live in a fragmented world. S/he lives in communities, political factions, firms, associations, towns, cities, nations, civilizations, or cultural traditions. S/he ceases to live in the world that God created. S/he lives in a world that s/he has fashioned with his or her own hands. S/he no longer lives in a world that has value per se. S/he lives in a world that has economic, financial or money value. S/he no longer lives in a world that sustains life. S/he lives in a world that is sustained by life. S/he no longer lives in the world. S/he exists in a world.

Empirical and reductionist science accelerated the alienation of human beings from the cosmos. Francis Bacon initiated the tradition of experimental empiricism in Britain. Rene Descartes propounded dualism, the theory of reality that separates res cogitans or mind from res extensa or matter. Galileo combined the experimental empiricism of Bacon with the rationalism of Descartes resulting in a material and mathematical theory of reality or the scientific method. Isaac Newton went further and claimed that science should separate the human observer from nature being observed. This approach effectively transformed nature into objects and commodities. As a realm of things, nature became an unchartered territory that man could study, conquer, exploit, and mold to satisfy man’s quest for betterment, progress or development.

Seyyed Hossein Nasr complemented Berry’s assessment by pointing out that the withering of consciousness as a principal reality from man’s consciousness has resulted in the reduction of the diverse levels of reality into a single level. Reality is reduced into elementary particles - quarks, leptons and bosons. The spiritual dimension has vanished. Science has caused the separation of spirit from matter. As a consequence, the logos, the consciousness or the spiritual reality of the old religions and mysticism has ceased to be the arche.

This paradigm has deep and profound implications to man’s view and relationship with nature. The cosmos has lost its divine origin and character. It is simply matter and its forces. The theory of the big bang has been proven and has served as a dominant explanation on the beginning of the universe. With this, “in principio creavit Deus caelum et terram” is supplanted by “the universe expanded from an extremely dense and hot state and continues to expand today”.

With God out of sight and out of the mind, religious truths and dogma have become valued artifacts in a Museum of Human Knowledge.



Governance Issues and Prospects in the Philippine Energy Sector

by Alan S. Cajes


Note: This article was written as an output for the Energy and Clean Air Project funded by USAID. The paper reflects the opinion of the writer.


The report of the Philippine Governance Initiative in 2006 came up with an overall assessment that states:


“The Philippine Team has found that electricity governance in the Philippines needs much improvement, in all areas of governance: transparency and access to information, participation of all stakeholders especially the weaker stakeholders, accountability and mechanisms for redress, and in building the capacity of both institutions of government and civil society.”[1]


This overall assessment is substantiated in a report that identified five main lessons. These lessons are:


1. Achieving good governance in the electricity sector starts with the policy process;
2. Effective regulation needs to put in place the right rules, but this is not enough;
3. Transparent, accountable, competent agencies of government are needed in order to have good governance in the electricity sector;
4. The government and its creditor/donor agencies must disclose the role played by the latter, and
5. Equally if not more important is the participation of weaker stakeholders[2].


In 2008, a technical working group composed of representatives from the Energy Family, identified issues that are related to governance. These are presented below.


PRIVATIZATION

  • Manualization of Privatization Guidelines

COMPETITION

  • Timely disclosure of market information among WESM participants
  • Strict enforcement of WESM Rules e.g., imposition of penalties to minimize breaches and promote a culture of compliance and discipline among WESM stakeholders
  • Undertake Performance Audit of WESM including PEM Committees including development of Performance Standards for the Market Operator
  • Review PEM Board Composition and Governance Structure
  • Continuous review and updates WESM Rules and manuals
  • Facilitate Transition to Independent Market Operator
  • Ensure effective and efficient performance of all service providers by developing standards of performance
  • Implement the IPPA Program

SUPPLY SECURITY

  • EPIRA Amendment on cross ownership
  • Institutionalize proper disclosure of information

TOTAL ELECTRIFICATION

  • Develop Capacity Building Program for ECs to implement off-grid electrification e.g., solar, mini-grid operations
  • Clarify the roles of DOE, NPC-SPUG, NEA and other players in the implementation of rural and missionary electrification
  • NPC to develop and adopt a Manual on Preparation of its Missionary Electrification Program including its best practices
  • Revisit NPC-SPUG Roles in existing areas and those areas with New Private Power Providers (NPPs)
  • DOE to issue a Circular on the Preparation of Missionary Electrification Development Plan (MEDP) incorporating the policies and programs to be adopted
  • Establish a One-Stop Shop for PSP Program including Monitoring and Coordination
  • Create a Core Group, within the EPIMB, to prepare and develop the MEDP
  • Develop Capacity Building Program for DOE, NEA and NPC on planning and implementing PSP Program and MEDP
  • DOE and ERC to reconcile the UC-ME and the MEDP
  • ERC to institutionalize MEDP evaluation and UC-ME determination

According to the 13th EPIRA Implementation Status report (Period Covering May to October 2008), one of the preconditions to open access and retail competition -- seventy percent privatization of the generating assets of NPC in Luzon and Visayas -- is nearly completed. The Energy Family has also assessed the Wholesale Electricity Spot Market (WESM) Rules, particularly on the governance and operational aspects of the electricity market operation as envisioned in the EPIRA. The other updates during this period are as follows:


1. Privatization of 14 NPC generating assets with an equivalent of 69 percent level of privatization[3];
2. PSALM will continue sell the NPC’s decommissioned power plants and other non-operating assets[4];
3. Power generation business of SPUG will be offered to private sector, known as the New Private Power Providers (NPPs)[5];
4. NPC’s debt was reduced by 18% from $7.01 billion at the end of 2007 to $5.7 billion as of end of 3rd quarter of 2008. The loan prepayments helped reduce the country’s debt burden, improved PSALM/NPC’s liability profile, and diminished its exposure to foreign currency risks[6];
5. PSALM will ensure timely filing for Universal Charge[7] to cover stranded debts and/or stranded contract costs;
6. Creation of a Technical Working Group composed of the DOE, Department of Budget and Management (DBM), National Economic Development Authority (NEDA) and DOF. Among others, the TWG looked into the possibility of implementing certain initiatives which could help in lowering electricity rates[8];
7. The WESM commercial operation in Luzon is still under the supervision of the Department of Energy (DOE), which heads the Autonomous Group Market Operator (AGMO)[9];
8. Demand-side participation in Luzon is sluggish although three (3) additional electric cooperatives (ECs) have registered as direct participants[10];
9. The Market Surveillance Committee (MSC), an independent body tasked to monitor the performance of the market, has made several recommendations to the PEM Board[11];
10. The Rules Change Committee (RCC) has approved some proposals, including amendments to the WESM Rules and Manual on Pricing Error and Price Substitution due to Network Congestion, proposed changes to the PEM Audit Manual, and proposed changes to the PEM Board Structure;
11. The DOE is now in the process of reviewing and improving the market rules currently implemented in the Luzon spot market to ensure that the declaration of commercial operation in the Visayas will result to real competition and eventually lower electricity prices;
12. Gross generation from power plants using imported fuels like coal and oil reduced to 6.77 percent and 13.72 percent respectively. With the high utilization of indigenous resources for power, self-sufficiency in first semester of 2008 increased to 67.99 percent compared to 64.34 percent than it was in first semester of 2007, and
13. In support of the Government’s efforts to alleviate poverty, the DOE launched a massive and focused action to increase and accelerate access to electricity services by the country’s unenergized communities[12].


In brief, the legal, regulatory and institutional frameworks for reform in the energy sector have been largely put in place. Around the middle of 2006, the wholesale electricity spot market became operational. The transmission and distribution tariffs are being regulated. What need to be fulfilled are the objectives of making the sector financially viable and privatizing the assets of NPC.


Drivers of Energy Reform


The EPIRA[13] is designed to achieve the following objectives:


1. Create and enable legal and regulatory environment to support competitive markets in electricity;
2. Restore the financial viability of NPC in the period prior to privatization;
3. Unbundle and corporitize NPC’s operations to facilitate the introduction of competitive markets in electricity;
4. Establish the open access transmission system needed to support competitive markets in electricity;
5. Establish the open-access distribution system needed to support competitive markets in electricity;
6. Improve the operational efficiency of the distribution subsector to enable it to actively participate in competitive markets;
7. Promote energy efficiency and demand-side management to supplement efficiency gains from competitive markets;
8. Mitigate the social impact of the transition to competitive markets, and
9. Ensure environmentally sustainable power generation.
10. These measures are expected to accomplish the following:
11. Promote competition in power generation and distribution[14];
12. Enhance the inflow of private capital;
13. Broaden the ownership base of power generation, transmission, and distributions;
14. Minimize the government’s financial and risk exposure;
15. Ensure quality, reliability, security, and affordability of power supply;
16. Rationalize electricity prices, and make them competitive and affordable; and
17. Where warranted, provide transparent subsidies to nonviable operations[15].


The long-term development vision of the government focuses on achievement of steady growth in per capita incomes, elimination of poverty and social and economic inequities, and protection of the environment and natural resources.


Ultimate Outcomes of the Energy Sector


A few years after the reform process has started, the energy sector technical working group has identified the key problem facing the sector. This is the need to ensure supply security and competitive rates to fuel economic growth. The underlying theme is summed up in this equation: No Brownout = No Shortage = Sustained Economic Growth. There are three (3) underlying problems to the key problem, namely, energy insecurity, uncompetitive rates, and areas that have no access to modern energy services.


Taking off from the direction set by the technical working group, this part of the paper makes a distinction between the ultimate outcomes and the ultimate objectives of the country’s energy system, including the EPIRA reform process that is still being implemented. The purpose of this exercise is to guide the different stakeholders in appreciating the direction of the reform process.


In doing this, it should be borne in mind that the energy system in the country (from generation to consumption of electricity) is just a means to an end. It is not the end. Although there are performance issues in the energy sector, these issues are what the people or stakeholders care about. Now, there are features of the energy system that may cause poor performance (like high overhead cost of distribution utilities or DUs). Fixing these features, however, is a means to better outcomes; hence, not an end in itself.


The proposed outcomes of the energy sector are productivity, customer satisfaction, and financial risk protection. Productivity is linked to improvement in economic performance. It is based on the assumption that access to electricity will result in economic development. In fact, studies have shown that a certain increase in capacity will lead to an increase in the performance of economic indicators, such as gross domestic product (GDP). Productivity encompasses the underlying theme identified by the technical working group: No Brownout = No Shortage = Sustained Economic Growth[16].


Customer satisfaction basically means that the customers are willing to pay the electricity tariff because it is affordable and competitive, and that they are satisfied with electricity generation, distribution, and transmission. This is the ultimate outcome why there is a need to ensure quality, reliability, security, and affordability of power supply. To fully appreciate the importance of customer satisfaction, it is instructive to recall the key issues prior to EPIRA.


The issues are surplus capacity and high operating cost associated with IPPs contracted by NPC, high debt-service burden of NPC, transmission bottlenecks, high power losses, absence of economies of scale, inefficient operations, and high distribution overheads among the many fragmented and small RECs. This translates to high cost of electricity. According to DOE Secretary Angelo R. Reyes:


“Concomitant and integral to our quest for securing our energy future, we are working with solutions to protect the developing Philippine economy from the volatility of fossil fuel prices through a more diversified and stable energy mix in power generation that will result to sustainable and reasonably-priced electricity rates. We are, however, confronted with the challenge that, on the average, about 60% of energy sources utilized in the power generation mix come from fossil fuels primarily oil, coal and natural gas. Moreover, the Philippines still has one of the highest power rates in Asia[17].”


Financial risk protection essentially means that the financial and risk exposure of the public sector is minimized. With competition in place, the private sector is expected to make investments in the sector. The inflow of private capital would therefore make power generation, transmission, and distributions open to investors who consider their investment as commercially viable. This way, government funds can be used for other purpose, market risk shifts from the public to the private sector, government’s financial and risk exposure is minimized, and the heavy financial burden of power sector development from the public sector is transferred to the private sector. The government, therefore, benefits from the power sector restructuring[18].


Intermediate Outcomes of the Energy Sector


There are intermediate outcomes expected from the energy sector. The intermediate outcomes are neither the problems in the sector nor the causes of the problems. They are intermediate between the ultimate outcomes and causes of the problems. The intermediate outcomes of the energy sector are related to efficiency, equity, access, and quality. In other words, the intermediate outcomes translate to energy security (access and quality), competitive rates (efficiency), and total electrification (access and equity)[19].


To achieve the energy outcomes and pursue the intermediate outcomes, the governance or policy control knobs that are available are financing, payment, organization, regulation, and persuasion or behavioural change. Financing refers to the way energy programs and projects are funded. Financing can be done by private sector players who use their own fund to implement energy programs and projects. They can also pool funds from various sources and use these funds to finance their operations. Payment refers to the manner by which payment for energy services is done. In particular, the use of lifeline rates falls under the payment control knob. The subsidies given to certain types of consumers also fall in this category. Organization refers to the capacity of individuals and institutions to perform their respective roles effectively. Training interventions and other types of capacity building, such as technical assistance and coaching, fall under the organization control knob. Regulation refers to the role that the Energy Regulatory Commission is performing in the energy sector. Finally, persuasion or behavioural change is related to information, education and communication activities that are designed to make the target audience demonstrate a certain type of behaviour. Advocacy programs related to energy conservation fall under the persuasion control knob.


The application of the control knobs will greatly vary from one issue or problem to another. It is recommended that one control knob is used with the other relevant control knobs. For instance, energy audits of commercial and industrial establishments can be regulated through legislation. However, regulation alone could not achieve the desired result, which is to make energy conservation a way of life. Persuasion is equally important. In fact, the policy direction is to develop a market-driven energy conservation program instead of enacting a law that will enforce compliance with energy conservation requirements. In addition to persuasion, the organization control knob is important. In other words, the capability and capacity to conduct energy audits and implement energy conservation measures should be available.


POLICY RECOMMENDATIONS


Energy security


Energy security is usually defined in terms of reliable and affordable access to energy supplies. Reliable energy supply does not automatically lead to energy security if the cost of accessing electricity is prohibitive. Similarly, affordable electricity rates could not lead to energy security if the supply is unreliable or not available when needed.


It is useful to distinguish energy security from energy independence. Energy security does not necessarily mean that the sources of energy are within the territorial jurisdiction of a country. One country can establish energy supply contracts with another country and can still attain reliable and affordable electricity. Energy independence would require one country to meet its energy requirements from sources within its own territory.


It is therefore possible for local government units, especially the island provinces and municipalities, to have energy independence. Energy independence, however, is not desirable as a goal in itself. In the case of the Philippines, it is nor feasible to pursue energy independence at this time or in the near future.


Energy security in the country is directly affected by two factors: one, the generating capacity of NPC is no longer capable to ensure national power supply security, and two, low additional generation capacities by the private sector.


In the Philippines, a large number of existing energy production capacities will have to happen in the short, medium, and long-terms. Such infrastructure will require investors who will be facing challenges posed by a liberalized market, environmental constraints, and the governance structure, systems and processes in the country down to the local level. Given the performance of the country in energy structural reform program, the incentives to invest in new capacities offer few incentives, particularly in terms of rates of return and risks when compared with other investment areas.


Policy Directions


In the short term, maintaining a reserve stock is important for energy security. What the country needs, however, is proper macroeconomic policy framework that will address the need for comprehensive plans to minimize energy supply risks. The policy framework should consider the following recommendations:


• Tie up the concern for energy security with reduction in energy consumption by aggressively pursuing efficient energy use. Among others, the emphasis on demand side management (DSM) should be given sufficient attention. There is a need for government to establish the DSM system, including the mechanism to monitor compliance with the DSM framework, and take appropriate remedial action where necessary. The government also needs to formulate incentives for DSM and source funding for DSM programs. Demand side management becomes important because it will lower the total cost of investment required.


• Apply or use appropriate principles and techniques in designing communities, especially urban planning. Energy supply and demand analysis should be brought down to the local level and should be considered in the preparation of comprehensive land use plans, among others.


• Pursue active energy conservation program, time-of-the-day pricing of electricity, and the consequent shifting of power demand by consumers and reduction in peak demand. This would help prevent new capacity additions[20]. Energy efficiency, therefore, should be seen as an opportunity to maximize the use of existing capacity. It should not be equated with foregoing the development of new capacities.


• Energy efficiency also helps in addressing global warming. It will also lead to significant environmental and economic benefits. Energy efficiency is essential in reducing the growth in fossil fuel demand and lowering energy prices, enhancing energy security, and reducing the emissions of greenhouse gases.


• Although adoption of renewable energy sources for power generation should be given due attention, oil-based power plants will continue to be a major component of the electricity grids, especially in island communities, remote areas, and sparsely populated areas where other options are not feasible.


Competitive Rates


As mentioned above, the affordability of electricity is an element of energy security. But given the importance of electricity tariff as an object of reform in the energy sector, it merits to be considered as a separate intermediate outcome.


The introduction of competitive markets in electricity is expected to improve governance related to supply conditions. With the absence of government monopoly in the supply of electricity, the private sector is encouraged to bring in private capital and invest in commercially viable power generation projects. Through this process, the market risk is transferred to the private sector. And because the market is presumed to be efficient, the competitive market in electricity is expected to exert downward pressure on electricity tariffs[21].
Based on the experience of Singapore, the market has given incentives to companies to reduce costs. In addition to lowering operation costs, the companies are looking for cheaper fuel. Overall, market reforms in Singapore have increased competition among the industry players and have benefited consumers. This experience has enabled the government to adopt the theme that “expensive electricity is no electricity at all”.


The energy reform package of the Philippines does not specifically promise that electricity tariffs will be reduced after completing the process of reform. Nevertheless, there was at least a theoretical underpinning that electricity rates will go down as a result of the reforms given the experiences of other countries. There were even estimates done as regards the effect of market competition to electricity rates[22]. Accordingly, power rates will go down to long-run marginal cost (LRMC) levels. This is attributed to reduction in distribution overheads, among others.


Policy Directions


Given the situation that the expected downward trend in electricity tariffs is yet to materialize, the question now is how to ensure that the power rates become competitive. The following policy directions are intended to help achieve this objective:


1. Independent and transparent regulation is needed in setting tariffs and it is imperative to use market-based pricing. This however, requires giving the Energy Regulatory Commission (ERC) fiscal autonomy and independence to minimize political and other interventions. This also requires ERC to practice good governance. Various elements of good governance in the electricity sector contained in the Governance Toolkit of the Electricity Governance can be used as reference in improving performance in this dimension[23].
2. There is a need to re-examine cross-ownership if it leads to uncompetitive practices[24]. This, however, requires sufficient information to ensure that uncompetitive practices are being done. On the part of ERC, there is a need for sufficient powers to detect and prevent such anticompetitive behavior. In addition, sufficient expertise to determine the operating cost of all the installed units should be available or accessible.
3. Establishing competitive electricity markets and adopting market pricing mechanisms that will benefit the consumers are important strategies[25]. In relation to this, there is a need to study the setting up of an independent market operator that can be privately run. In terms of the composition and governance structure of PEMC, there is a need to bring in qualified and independent-minded board members who can make decisions based on the interest of society, in general. There is also a need to ensure that there is sufficient number of participants. This aims to prevent generation companies from forcing up the market-clearing price.
4. Tariff structures should consider strategies like promoting energy conservation, providing penalty for peak-hour and peak-season consumption, as well as discouraging the use of electricity that has poor power and load factors. Accordingly, if the peak demand of power exceeds the installed capacity, the system marginal price during periods when load is being shed is equal to the cost of unserved demand. Therefore, regulation is needed to specify a price cap to prevent excessive profits.
5. Cross-subsidies from one class of consumers or areas to another should be minimized and be made transparent, quantifiable, targeted, and can be phased out in the medium term by designing appropriate social safety nets. An alternative could be government subsidies to households that avail of the lifeline rates[26]. Lifeline rates to consumers who have very low monthly consumption could be an acceptable strategy.
6. One way of reducing the cost of electricity is scrapping the VAT on electricity. It is also possible to scrap the royalties on indigenous energy[27]. Estimates point out that a reduction of PhP0.16/kwh can be done by removing natural gas royalties. The impact, however, of this measure will not be felt immediately. The government uses the royalties to pay for the excess energy being delivered by the Malampaya natural gas operations[28].
7. For DUs to actively participate in a competitive market system, they need to be of sufficient size to attract competition between generators, have the ability to make sound bids in the competitive market, and have the financial resources needed to back up those bids[29]. The economies of scale can be pursued through structural and operational reforms to achieve efficiency[30].


A policy on disconnection for delinquent customers may need to be formulated because the financial viability of buyers is important to reduce the suppliers’ risk of nonpayment.


Training and other forms of capacity building are important for power sector reform and restructuring. The Energy Family and the industry players need management skills, technical knowledge about new technologies, and good governance capacity (including financial management). Therefore, human resource development, within the context of organization development, is an important long-term investment.


Under EPIRA, the NPC assets are sold and large utilities are unbundled in the process. The NPC assets are sold to the private sector, except for those assets that are still covered by contracts and administered by another party. The private sector participates in the privatization efforts but make a bid based on their own assessment of the revenue-earning potential of the assets. There are factors that influence the sale value of the power sector assets. These factors include the following: Investment climate in the country; Level of consumer tariff; Transparency in regulatory procedures; gains that potential investors hope to achieve from other investments; Value assigned to making an early entry into the sector or country; Financial strength of other companies in the industry and of customers, and the instrument of sale".


These factors need to be nurtured properly if competitive power rates are to become a reality in the near future.


Total Electrification


One of the key issues in sustainable development is “energy poverty in the midst of plenty”. This is recognized during the World Summit on Sustainable Development (WSSD), which gave prominence to energy and its relationship to poverty eradication and sustainable development. In this context, the access to energy services becomes an important condition to achieve the poverty alleviation goal of the United Nations, which is to reduce by half the number of people living under US$ 1 a day by 2015. Thus, policies and measures that address energy access must be given the highest priority in national energy sector planning.


Although access to modern energy services is not part of the Millennium Development Goals (MDG), various scholars have pointed out that the MDG target could not be attained without energy access. A large number of people who live below the poverty threshold depend on the use of old biomass-based technologies that pose health risks and even death to the poor. Thus, it is not stretching the imagination too much to assume that the MDG targets can not be achieved without access to modern energy services[31]. Access to modern and reliable energy services remains essential for sustainable human development, economic growth, higher quality of life, and better delivery of education and health services. In other words, access to energy is essential to poverty reduction initiatives.


The electrification program in the country is facing challenges since most of the unenergized barangays are remote, disperse, and difficult to electrify. The program requires more resources, time and efforts. To achieve the goals of the program, it is necessary to integrate rural and missionary electrification efforts through a collaborative effort of the public sector, private sector, civil society organizations, and donor institutions.


The DOE has programs and projects lined up to expand access to electricity services. These programs cover the 1) provision of cost-of-capital subsidies of solar photovoltaic battery charging stations, individual solar home system, micro-hydro systems, and wind turbine energy systems; 2) innovative service delivery to promote sustainability of the projects and ownership by the beneficiaries, and 3) grid connection and off-grid electrification through the ER 1-94 Electrification Fund[32].


The NEA provides technical, financial and institutional assistance to electric cooperatives (ECs) to ensure the provision of the reliable and adequate electric services in their respective franchise areas. NEA’s subsidy program covers barangays and sitio electrification. It has a set of criteria to prioritize the beneficiaries.


The NPC-SPUG provides small-scale power generation and associated power delivery systems in areas that are not connected to the main transmission grid. It is currently serving 75 small islands nationwide. The NPC-SPUG’s implementation is dependent on the availability of the share of Missionary Electrification from the Universal Charge (UC-ME).
Since the DOE provides policy direction and over-all program management as regards electrification program, it is important to consider the following:


1. Come up with a clear policy to expand access to electrification;
2. Formulate an action framework that clearly identifies and determines the roles of key stakeholders, such as the local government units, other government agencies, private sector, civil society organizations, people’s organizations, donor institutions, distribution utilities, and qualified third parties[33];
3. Review and evaluate the previous programs and projects, especially those related to renewable energy system, to identify what went well and what went wrong, as well as use the information in crafting the policy and the program of action;
4. Document good practices in other countries for possible replication in the country and for avoidance of programs and projects that are bound to fail in the long run;
5. Build local and institutional capacity to implement and sustain programs and projects, especially among the local government units and the local distribution utilities;
6. Strengthen the capacity of higher education institutions to provide knowledge and technical support to program and project implementers and partners;
7. Conduct policy fora to discuss the problem of rural electrification, including experts’ and citizens’ conference, and
8. To the extent possible, outsource the implementation of programs and projects to organizations or institutions that have experience, track record, competence, mandate, and capability to run the programs and projects so that the DOE could focus on monitoring and evaluation functions.


Policy Directions


There are a number of technical options that are available to ensure energy access for all. The options include grid extensions, mini grids, and off-grid systems based on renewable energy sources. The maximization of the renewable energy’s contribution into the power requirement of the country will take time, and at best within the range of 40-60 percent. As DOE Secretary Reyes pointed out:


“While we have taken that big step towards clean energy utilization, our calculations estimate that the contribution of renewable energy sources to the country’s power requirement is projected to be between 35% to 55% until the year 2030. This is of course subject to technological developments and cost considerations, specifically in the area of storage technologies. Assuming that the maximum share of 55% from renewable energy sources will be utilized in the power generation mix, the remaining 45% gap will have to be supplied by reliable base load capacity[34].”


The initiative towards total electrification should be implemented in a comprehensive manner so that the target customers can maximize their benefits. One critical issue that needs to be addressed is quality of supply, especially during peak periods.


Although there is no argument against the need to pursue renewable energy, it is important that a comprehensive review and assessment of previous programs and projects is done to determine success factors, gaps, and avoid a repeat of the past failures. Besides, renewable energy projects also have significant negative impacts that need to be prevented, mitigated or controlled.


Among the policy directions that are required to pursue total electrification are the following:


1. In view of the objectives under the MDGs and the WSSD, the national energy policy should satisfy the basic needs of the population who have no access to modern energy services. Therefore, there is a need for a clear policy to address the needs of people who are considered energy poor because they have not benefited well from conventional energy policies. It is critical that energy poverty is recognized as one of the key social determinants of well-being in view of the significant rural-urban inequities in energy supply and consumptions.


2. Ensuring universal access to electricity requires “ambitious” national electrification program as integral elements of national sustainable development frameworks. At the national level, there is a need to launch national programs, projects and initiatives on renewable energy and efficient clean energy technologies to provide energy services to people, especially in off-grid areas.


3. The commercial, industrial, and high consumption residential consumers are subsidizing the poor. If these cross subsidies are removed, the poor will have to pay more for their electricity consumption. Although it is expected that the government will continue to maintain as certain level of subsidy, it is likely that the phasing out of cross subsidies, particularly of the poor, will be carried out slowly over time[35].


4. The removal of the economic subsidies will lead to higher tariffs for these sectors in some areas of Visayas and Mindanao. This, in turn, will lead to lower productivity and unemployment in these sectors. Job loss is expected to create a new class of poor, who are likely to have greater debt problems and psychological problems compared to the established poor. It is important that government provides assistance to the affected population so that they could adjust to the new environment.


Cross-cutting Policy Directions


The process of implementing the EPIRA faces a number of risks. One, the creation of a wholesale power market will largely depend on the ability of the government to ensure an open access policy. Two, there is a need to guard against the possible anticompetitive behavior of the industry players, chiefly the distribution utilities and the newly formed generating companies. Three, there is a significant risk that is related to the human and institutional capacity for dealing with complex issues brought about by the restructuring program.


That is why good and effective governance becomes an important ingredient for a successful energy reform. The absence of good and effective governance can severely impair the implementation of energy reform initiatives. Governance, therefore, need to be given the same level of prominence as technical and economic considerations of reform. Ultimately, the preconditions for full EPIRA implementation are governance concerns that are linked to transparency, accountability, rule of law, etc.


Within the context of good and effective governance, it is imperative that the energy policies of the government must ensure the following:


1. A leveled playing field;
2. A supportive policy and regulatory environment in order to encourage private sector participation;
3. An energy market that considers the total cost to society of its energy choices is created;
4. Enabling conditions to support national systems of innovation and technology transfer like targeted training programs, information access, strengthening scientific and technical educational institutions, technology assessment and demonstration projects, etc.;
5. Strategic, coherent and coordinated framework to support national implementation, and
6. Energy access plans that include actions for national, regional, and local government levels cooperation.
7. Emphasis on accountability, participation, predictability, and transparency—the basic elements of good governance, therefore, need to be given due importance in the same level as complex technical elements of reforms.
8. For instance, the private sector would require transparency and accountability, in addition to the possibility of realizing a reasonable rate of return, to actively participate in the generation subsector. Inefficiencies, such as perceptions of corruption and bureaucratic red tape, will not only discourage potential investors but will also increase the cost of generating and supplying power at the expense of the consumers. Various forms of corruption in the energy sector are a growing concern in good and effective governance.
9. Following the proposal of George Soros and in line with the need for transparency, energy companies could make public disclosures of taxes, royalties and other payments to governments. According to the World Economic Council (WEC), corruption adds to the cost of energy, thereby making it more difficult to bring commercial energy to the poor. WEC enjoins its members to “make ethics a strong component of energy system governance”. In line with this, WEC recommends the following ingredients:
10. Voluntary governmental and corporate energy and/or environmental audits;
11. Transparent contractual relationships;
12. Common safety and environmental rules;
13. Best business practices for company plants, and
14. Respect for energy workers and customer choice.


There is a need to disclose information, including the technical ones, so that the different stakeholders could understand the issue besetting the sector. Disclosure and transparency about the general terms of contracts are keys to protection of the rights of the consumers. They also help promote integrity in the sector.


The good practices that the energy sector should consider to improve corporate governance include the Access Initiative for effective engagement of the stakeholders in decision making, the global reporting initiative for reporting performance, and the formulation of service charters.
In support of good and effective governance, the cross-cutting themes discussed below should be pursued by the energy sector.


Informed Participation of Stakeholders


The energy challenges facing the country require the active and informed participation of all stakeholders. It may require the establishment of energy councils at the national and local levels to allow the development of greater expertise among users with regard to energy conversion and end use, among others. Such energy councils would be a point of diffusion of information to users on important topics like details on energy efficiency measures and energy prices, information on environmental externalities, on renewable energy sources, and information on the impacts of energy investments. The information provided will allow energy users to make informed choices regarding their preferences (technology, housing, type of fuels used, etc.) and help them initiate conventional, new, and renewable energy projects which could trigger more sustainable development.


The energy councils will help the national and local governments to attain energy, environment, and other relevant directives. They could represent energy users and ensure that their rights are respected. They could also serve as the conduit through which users (civil society) can participate in an informed and independent way.


Critical discussions of issues with the participation of the civil society organizations and independent researchers could shed light on the problems we are facing, foster collaboration among the stakeholders, and could result in a synthesis whereby innovative approaches are identified to meet the challenges.


Lack of public involvement from the earliest stages of the reform process has often led to destructive failure and has discouraged potential investors in a restructured energy industry. It is therefore important that policies and programs of action in support of energy reform benefit from constructive and meaningful stakeholders participation.


Technical and economic issues are necessary elements of energy sector reform. In themselves, however, they are not sufficient. Political issues are equally important. Good and effective governance —rule of law, transparency, accountability, etc. — is considered as critical to achieve sustainable energy sector reform[36].


Environmental Sustainability


Environmental sustainability is usually taken to mean that the environmental resources, capacities, and services of ecosystems are not degraded beyond the acceptable limits of the natural environment. At present, the most pressing concern is the impact of climate change to various areas of human life, including energy generation. Climate change could severely affect rainfall patterns, thus posing a significant challenge to water-based energy generation plants. Climate change could also exacerbate the occurrence and impact of natural disasters, thus posing dangers to energy infrastructure from generation to transmission.


It is high time that countries, like the Philippines do not only set goals in relation to promoting environmental sustainability, like reduction of greenhouse gas emissions and use of renewable energy systems, but also consider the impacts of environment-related disasters in energy planning activities at the national and local levels.


DOE Secretary Reyes has verbalized the agency’s commitment to environmental sustainability. He said:


“As a signatory to the UN Framework Convention on Climate Change and the subsequent Kyoto Protocol, we are fully committed to doing our part in addressing global warming even though we are not legally bound to impose a national limitation on emissions. In our efforts to ensure that the use of energy must not damage our environment…[37]”


All energy sector investments, therefore, will have to meet environmental safeguards, including those aspects that are critical in getting social acceptability, such as involuntary resettlement, impoverishment risks, etc.
The environmental and social aspects of the agencies that have critical roles in the energy sector also need to be clarified. For instance, the health, environmental, and social aspects of energy programs and projects require clear rules of engagement among DOE, DENR, DOH, DSWD, and DTI. Although the government has been using the environmental assessment system to look at environment and social issues, it is important that this system is not reduced to a mere fragment of paper that only adds expense to energy project development.


Capacity Building


Capability building to improve institutional capacity is indispensable to effectively promote reforms and good governance. Human resource development is considered as a long-term investment to enhance the effectiveness of the energy sector.


The government needs to develop human and institutional capacity at all levels. The capacity-building interventions should cover areas like policy and strategy development, intra-governmental coordination, regulatory capacity market restructuring, project cycle management, financing and resource mobilization, etc.


Roles of DOE


The DOE will be in a good position to provide good information and create the environment that is conducive for a rational stakeholder to give contributions into:


1. Selection of energy supply and investment in electric generation;
2. Determination of full-cost pricing;
3. Maintenance of the quality of service;
4. Design of energy efficiency measures, and
5. Promotion of renewable energy and other issues of interest to the users and to all citizens.


With DOE serving at the same time as the energy planning agency, it is in a position to strengthen the technical rigor of the energy planning process, formulate clear and coherent policies and action plans at the national, local and utility levels with the full participation of the academe, consumer groups, and civil society organizations, among others.


For inter-agency cooperation and cooperation with UN bodies and the Bretton Woods organizations, there is a need for a joint and coordinated strategic plan of action for energy reform that is in accordance with national plans, priorities and programs. Such a plan should be translated into an operational framework for action that all stakeholders can understand, support, and believe in.


REFERENCES
Asian Development Bank. Energy Policy, ADB Policy Paper, June 2009;
Asian Development Bank. Key Indicators. 2007;
Asian Development Bank. TA 4151-PHI: Promoting Good Governance in the Restructured Power Sector
Asian Development Bank. Report and recommendation of the President to the Board of Directors on a Proposed Loan and Technical Assistance Grants to the Republic of the Philippines for the Power Sector Restructuring Program, November 1998
Bureau of Treasury website www.treasury.gov.ph
Department of Energy website www.doe.gov.ph
Department of Finance website www.dof.gov.ph
Governance for Sustainable Development, A foundation of the future, edited by Georgina Ayre and Rosalie Callway.
Hélène Connor, Robert Gould, Rod Janssen, Christophe Rynikiewicz, “New governance imperatives for energy planning in liberalised European markets”
Malaluan, Nepmuceno A., “The Need to Challenge the Private Sector Fundamentalism of the IFIs in Power Sector Program.” Paper presented at the Privatization of Infrastructure Seminar held 5-6 January 2003 in Hyderabad, India as part of the Asian Social Forum.
Modi, V., S. McDade, D. Lallement, and J. Saghir. 2006. Energy Services for the Millennium Development Goals. New York: Emergency Sector Management Assistance Programme, United Nations Development Programme, United Nations Millennium Project, and World Bank
National Statistics Coordination Board www.nscb.gov.ph
Natsuko Toba, Welfare Impacts of Electricity Generation Sector Reform in the Philippines, ERD Working Paper No. 444, June 2003.
Senate of the Philippines Policy Brief, June 2008
Senate Economic Planning Office, Five Pillars of Growth, An Economic and Social Development Framework, 2004.


________________________________________
[1] GRIPP, Philippine Electricity Governance Initiative. WRI: June 2006, p. 8
[2] Ibid.
[3] As of December 2008, the privatization level reached 73.3 percent with the successful bidding for Panay-Bohol and Amlan.
[4] The EPIRA mandated PSALM to choose, through public bidding, Independent Power Producers Administrator/s (IPPA/s) who will administer, conserve, and manage the contracted energy output of NPC-IPP contracts. PSALM recommended adopting the Ownership Approach with the use of back to back contract between PSALM and the appointed IPPA. The back to back contract will reflect the applicable provisions of the original Energy Conversion Agreements (ECAs) between the IPP and NPC. The responsibilities, benefits and risks which can be legally and commercially transferred from NPC to the IPPA will be included in an IPPA Agreement between PSALM and the IPPA .
[5] To facilitate the implementation of this policy, the DOE issued Department Circular No. 2004-01-001 on 26 January 2004 which declared open for private sector participation (PSP) all existing SPUG areas and mandated the conduct of and set the procedures for the competitive selection process as required by the rules on privatization of the Commission on Audit. The selection of an NPP is guided by the following considerations: 1) ability to achieve the lowest long-term cost of power and services; 2) environmental compatibility with the local area, AND 3 most advantageous implementation schedule. However, the lengthy bureaucratic process in securing and complying with certain regulatory requirements and approvals from both the national and local governments is inevitably affecting the financing and implementation of a power project. Thus, an NPP is expected to assume a complete take-over of SPUG generation within two to three years.
[6] The prepayment enabled NPC/PSALM to save on interest payments and guarantee fees that can be used to prepay the other loans of NPC to further trim its stranded debts.
[7] The Universal Charge (UC) is a non-bypassable charge, mandated under Section 34 of the EPIRA, to be imposed on all electricity end-users, including self-generation entities, for the following specific purposes: 1) Payments for stranded debts and stranded contract costs; 2) Missionary electrification; 3) Equalization of taxes and royalties applied to indigenous or renewable sources of energy vis-à-vis imported energy fuels; 4) An environmental charge for watershed rehabilitation and management, and 5) A charge to account for all forms of cross-subsidies. The UC is collected from all end-users every month by the National Transmission Corporation (TransCo) and distribution utilities based on the approval made by the Energy Regulatory Commission (ERC) and remitted to PSALM every 15th of the following month.
[8] The initiatives include the following: 1) Review the VAT on systems loss; 2) Review of the systems losses/caps on recoverable systems losses; 3) Review and renegotiation of power supply contracts; 4) Implementation/rationalization of National Wealth Tax for LGUs/Regions; 5) Review and rationalize Lifeline Policies and Subsidies; 6) Implementation of Open Access and Retail Competition within Economic Zones; 7) Review of Wholesale Electricity Spot Market (WESM) Rules; 8) Review of the implementation of the NPC Php4.11/kwh flat rate; 9) Implementation of Time of Use Rates and Demand Side Management (DSM) Program at the distribution level; 10) Review power purchasing practices of distribution utilities; 11) Conduct diagnostics of the status of EPIRA implementation of all relevant stakeholders; 12) Audit the operation of National Power Corporation and TransCo in relation to rates, and 13) Review and validate the operation of Distribution Utilities in coordination with the Energy Regulatory Commission. The provision of lifeline rate subsidy is allowed by Section 73 of the EPIRA. To date, the lifeline subsidy is enjoyed by mostly marginalized residential end-users falling within the lifeline level determined based on consumption while subsidizing class are the non-lifeline residential end-users as well as the industrial and commercial consumers. In the height of clamor for lowering the electricity rates, the expansion and improvement of lifeline coverage was proposed by various consumer groups that even the Bureau of Trade Regulation and Consumer Protection/Department of Trade & Industry (BTRCP-DTI) has moved a petition with the ERC for the approval of the New Lifeline Rate for Marginalized End-Users in Accordance with the provisions of Sections 43(j) and 73 of the EPIRA.
[9] The implementation of the WESM is one of the key features of the EPIRA. Under Section 31, it is a pre-condition for the implementation of open access and retail competition.
[10] These are: 1) Sorsogon I Electric Cooperative, Inc. (SORECO I); 2) Benguet Electric Cooperative (BENECO), and 3) Tarlac I Electric Cooperative, Inc. (TARELCO I). The total eight (8) direct-member customers comprised only around five (5) percent of the prospective 163 customer participants.
[11] These include 1) Review on the Investigation Report of the Enforcement and Compliance Office (ECO); 2) Analysis on the Competitiveness of the Visayas Electricity Market; and 3) Request for investigation on the possible breaches of the WESM Rules (i.e., non-compliance with the must offer rule and the real time dispatch schedules).
[12] Prior to the launching of ABEP, barangay electrification level stood only at 76.9% having a recorded electrified barangays of 32,281 out of 41,980 total barangay coverage. By the end of 30 September 2008, the ER Program had already energized 40,775 barangays or 97.13% electrification level with only 1,205 unenergized barangays nationwide remain.
[13] The key issues prior to the reform include the following: surplus capacity and high operating associate with IPPs contracted by NPC; high debt-service burden of NPC; transmission bottlenecks; high power losses (overall average system loss sustained by all rural electrification cooperatives (RECs) was 18 percent with a high value of 39.2 percent); and absence of economies of scale, inefficient operations, and high distribution overheads (overall average markup of all RECs was 771.1%, with a high value of 283.7 percent) among the large number of fragmented and small RECs. A combination of these difficulties has resulted in Philippine power rates being the second highest in the region.
[14] The government plans that competition will determine generation tariffs, but the tariffs for the wires portion of distribution tariffs, and the transmission wheeling tariffs will continue to be regulated.
[15] Electricity consumers in Luzon are subsidizing consumers in the other grids in a nontransparent manner according to ADB.
[16] In 1990 the Philippines was confronted with a crisis of insufficient electrical generating capacity. Metro Manila and the thirty-three provinces in the Luzon power grid experienced brownouts of up to four hours per day, with the grid averaging a daily deficiency of 262 megawatts. At the root of the problem was the decision by the Marcos regime to build a 620 megawatt nuclear-power plant on the BataanPeninsula. The Aquino government decided not to use the facility because it was located on a seismic fault. As a result, a badly needed expansion of generating capacity in Luzon, which accounted for 75 percent of national electric consumption, did not come on line. The problem was compounded by inadequate planning and bureaucratic delays. There were delays in the building of a facility capable of generating 110 megawatts of geothermal power in Albay Province and a 300 megawatt coal-fired plant in Batangas Province. The short-term solution was to put up a series of gas-turbine plants with a combined rating of 500 megawatts. Only 245 megawatts came on stream between 1987 and 1989. Economists estimated that to achieve a 5.6 percent growth rate in real GNP, the country would need an additional 300 megawatts of generating capacity yearly.
[17] Paper presented by DOE Secretary Angelo T. Reyes in the International Ministerial Conference on Nuclear Energy in the 21st Century, Beijing, China, 20-22 April 2009
[18] Among others, the government is no longer required top provide funds for the expansion of the sector in areas that have a scale of electricity use that is conducive for commercial operations. It no longer assumes demand growth risks because centralized generation planning becomes a secondary tool, and responsibility for determining the right level of generation tariff is transferred to the electricity market.
[19] According to WEC, there are three goals that need to be achieved: 1) energy accessibility; 2) energy availability, and energy acceptability. On the other hand, the long-term goal of ADB’s assistance is to ensure the quality, reliability, security, and affordability of electricity supply in the Philippines.
[20] Increased efficiency of energy use and supply will accordingly yield more service value from each primary energy unit consumed.
[21] Singapore, United Kingdom, and Argentina, for instance, registered downwards trend in electricity tariffs after initiating reforms.
[22] This estimate is based on the assumption that the transition to competitive markets will start in 2000 and will be completed in 2005.
[23] Accordingly, regulatory skills, antitrust and prevention of monopolistic practices, and an appropriate legal and proper corporate governance practices need to be in place to support an effective restructure environment.
[24] An example of an uncompetitive practice is when a distribution company is allowed to buy from allied generators and discriminate against rival generators.
[25] Such markets accordingly need a certain level of sector maturity before they can function effectively. Accordingly, the market would be effective provided the revenue stream available to the generating companies exceeds their variable cost by an amount that is adequate to cover the fixed costs of generation, including reasonable return to the investors. If there is under-recovery, there will be little to encourage new investments in the sector, and if there were over-recovery, the investors in the generating companies would get a high return at the expense of the consumers.
[26] Lifeline rates refer to the subsidized rates given to low-income electricity consumers who cannot afford to pay at full cost as prescribed by the Electric Power Industry Reform Act (EPIRA). Lifeline rates vary depending on the distribution utility and are set by the Energy Regulatory Commission (ERC).
[27] The government collects a 60 percent share of the net proceeds of natural gas development, 60 percent of the net proceeds of geothermal energy development, and 30 percent of the net proceeds from indigenous coal.
[28] Because of the take-or-pay agreement governing the Malampaya operations, the government has to pay the full amount of energy delivered by Malampaya regardless of whether this energy is utilized or not.
[29] In theory, open and equal distribution access, competition and efficiency gains at the generation level will be passed on to the end-use consumer, as consumers will be able to select the generator of their choice through an open competitive market. Under such a system, DUs will carry power through their wire networks and charge wheeling fees for this service.
[30] The government is expected to identify areas for possible structural and operational reform of distribution operations, conduct appropriate workshops and pilot studies, and encourage area-specific models and methodologies for achieving these structural and operational reforms of distribution operations.
[31] The UNDP has stated that none of the Millennium Development Goals (MGDs) can be met without major improvements in the quality and quantity of energy services in developing countries. The UN Millennium Project, an advisory body constituted by then-UN Secretary General Kofi Annan to recommend practical steps toward achieving the MDGs, argued forcefully that “greater quality and quantity of energy services will be required to meet the MDGs”
[32] Under ER 1-94, power generators and/or energy resource developers are mandated to set aside one centavo per kilowatt-hour (P0.01 per kWh) of the total electricity sales as financial benefits to host communities for electrification, development and livelihood, reforestation, watershed management, health and/or environment enhancement.
[33] Section 59 of the EPIRA and Rule 14 of the EPIRA-IRR stated that “the provision of electric service in remote and unviable villages that the franchised utility is unable to service for any reason shall be opened to other qualified third parties.” Thus, once the concerned franchise holder deems that providing electricity to a barangay or barangays is not commercially viable, then an electric service provider other than the adjacent distribution utility may be authorized to provide the electricity services.
[34] Paper presented by DOE Secretary Angelo T. Reyes in the International Ministerial Conference on Nuclear Energy in the 21st Century, Beijing, China, 20-22 April 2009
[35] It appears that the impact of subsidy removal is relatively small due to the small percentage expenditure on electricity (the 1994 Family Income and Expenditures Survey show only 1.6 to 3.0 percent of the expenditures of households with annual income below the poverty threshold go to electricity.
[36] Technical and economic factors are always included in reform because they are inherent to the process; democratic governance is often not considered because reform practitioners think that they can put it off or avoid it.
[37] Paper presented by DOE Secretary Angelo T. Reyes in the International Ministerial Conference on Nuclear Energy in the 21st Century, Beijing, China, 20-22 April 2009

Opportunities to Improve the Governance of the Electricity Sector: Selected Cases in Renewable Energy


by Alan S. Cajes


Note: This article was written as an output for the Electricity Governance Initiative Phase 2 implemented by the Ateneo School of Government, Ateneo de Manila University with funding support from the World Resources Institute. The paper reflects the opinion of the writer.


1. INTRODUCTION

The Electricity Governance Initiative (EGI), a collaborative undertaking of the World Resources Institute (WRI) in partnership with the Prayas Energy Group (PEG) in Pune and the National Institute for Public Finance and Policy, developed The Electricity Governance Toolkit: Benchmarking Best Practice and Promoting Accountability in the Electricity Sector and published the pilot version in February 2005. The toolkit was used in conducting a pilot assessment of governance of the electricity sector in the Philippines. 

The key objectives were to gather primary and secondary data and identify the strengths and areas for improvement. The Academy’s Center for Sustainable Human Development was involved in the pilot assessment, focusing on the Environmental and Social Aspects (ESA).

The findings of the assessment team are summarized in the table shown below. For ESA, the sector is rated medium for transparency and access to information but rated lowest for accountability and redress mechanisms. Overall ESA rating is low middle.

Table 1. Overall ESA Rating for the Philippines
Governance Principle
Policy Processes
Regulatory Processes
Environmental and Social Aspects
Total Average Score
Transparency and access to information
1.7
2.7
3.3
2.3
Participation
1.0
2.3
2.8
2.3
Accountability and redress mechanisms
2.0
4.0
1.6
2.7
Capacity
2.5
2.9
3.0
2.8
Total Average Score
1.8
3.1
2.7
2.5
Note: A rating of ‘not assessed’ yields a score of ‘0’, lowest = 1, low-middle = 2, medium = 3, medium-high = 4, highest = 5.

This paper focuses on the Environmental and Social Aspects (ESA) and uses selected cases of renewable energy projects to expound the governance principles. The objectives are to show concrete examples whether the environmental and social aspects are considered in the governance of the electricity sector and to pinpoint opportunities to enhance the governance of the said sector. 

The table below shows the 21 ESA indicators, together with the corresponding governance principles and rating.

Table 2. ESA Principles, Indicators and Ratings
Governance Principle
Indicator
Rating
Access to Information and Transparency
1 - Clarity of authority and jurisdiction to grant environmental clearances/approvals for power sector projects
Highest
Access to Information and Transparency
2 - Clarity and transparency of the executive’s environmental and social mandates
Medium-High
Access to Information and Transparency
3 - Scope and transparency of the environmental and social mandates of the regulatory body
Lowest
Capacity
4 - Executive’s capacity to evaluate environmental and social issues
Highest
Capacity
5 - Regulator’s capacity to evaluate environmental and social issues
Medium
Capacity
6 - Legislative committee’s capacity to assess environmental and social issues
Lowest
Participation
7 - Public participation in setting minimum environmental performance standards
Medium
Participation
8 - Inclusion of environmental consideration in the national plan for the electricity sector
Low-Middle
Participation
9 - Inclusion of environmental consideration in sector reform process
Low-Middle
Participation
10 - Public participation requirements in environmental impact assessment laws and procedures
Medium-High
Capacity
11 - Comprehensiveness   of EIA laws, policies and procedures
Medium
Accountability and Redress Mechanisms
12 - Regulatory response to environmental and social petitions or complaints
Not applicable/ assessed
Participation
13 - Electricity provider engagement with civil society organizations and potentially-affected populations
Lowest
Capacity
14 - Capacity of civil society to address the environmental and social aspects of decision-making
Highest
Accountability and Redress Mechanisms
15 - Quality of the judicial or administrative forums that address environmental and social claims
Highest
Accountability and Redress Mechanisms
16 - Accessibility of   the judicial or administrative forums that address environmental and social claims
Lowest
Accountability and Redress Mechanisms
17 - Assessment of job losses linked to policy changes or sector reforms in the electricity sector
Lowest
Participation
18 - Participation in   decision-making about access to electricity
Lowest
Participation
19 - Scope for project-affected people to exercise their rights
Medium
Participation
20 - Participation in   decision-making related to affordability of electricity prices
Medium
Participation
21 - Participation in   development of policies to promote low environmental impact technologies and management
Highest

2. RELEVANCE OF THE ESA INDICATORS

The ESA indicators are relevant given that energy is a “crucial commodity,” which could serve as an “instrument for poverty reduction and social equity,” and given the “environmental dimensions of energy policies”[1].

As a crucial commodity, it may be pointed out that the cost of commercial electricity in the country at 13.58 US cents/kWh in June 2005 was higher compared to countries like Indonesia (at 12.53), Singapore (10.58), Lao PDR (10.49), Vietnam (9.79), Bangladesh (8.62), China (8.24), Malaysia (7.74), Thailand (7.19) and Brunei (3.10) although lower compared to Cambodia (20.00), Japan (17.54), India (14.37), and Hongkong (13.89)[2]. In the same period, the country’s residential electricity rate at 14.43 US cents/kWh was second only to Cambodia (at 15.18) and higher than the rates of India (at 8.47), Hongkong (12.99), IndonesiaSingapore (10.59), Lao PDR (10.49), Vietnam (9.86), Bangladesh (8.20), Malaysia (5.78) and Thailand (8.65)[3]. (10.10),

It is not difficult to see the possible negative impact of the high cost of electricity to the competitiveness of Philippine industries, as well as to the purchasing power of the households. The situation is aggravated by the “projected power supply shortages in Mindanao by 2009, Visayas by 2010 and Luzon by 2012” if the required new capacity is not installed in the next four years[4].

From an environmental perspective, the country’s energy-related carbon dioxide emission, based on 2003 estimates, is 72 million metric tons, of which oil contributed 66 percent, coal contributed 26 percent, and natural gas contributed seven percent. The estimated per capita energy-related dioxide emission is 0.9 metric tons, which is a bit lower than India’s one metric ton per capita and much lower than Thailand’s 3.4 metric tons per capita[5]. Although the Philippine Energy Plan (PEP) extensively discusses programs to mitigate hydrogen sulfide emissions from geothermal plants, no parallel intensive discussion is made to reduce carbon dioxide emissions from coal, gas and oil plants. In fact, the PEP projects an increase in carbon dioxide emissions by 68.5 percent between 2004 and 2014.

2.1 Relevance of the ESA Indicators to Renewable Energy

In 2004, geothermal and hydropower plants contributed 14 and 20 percent, respectively, to the total installed capacity mix[6]. Under the 2005 PEP update, the Department of Energy (DOE) aims to double the country’s renewable energy-based capacity, as provided under the Renewable Energy Policy Framework (REPF). The identified technologies are those that will harness energy from water, biomass, sunlight and wind.

There are realities, however, that must be confronted when promoting renewable energy RE) technologies. Says former DOE Secretary Raphael Lotilla:

“One, the reality of the high upfront cost of renewable energy. Second, the limitations as to site-specificity of many of the renewable sources of energy available to us. Thus in order to be able to tap the geothermal resources of this country, we’ve had to build expensive transmission lines connecting the different islands of the country to bring the energy supply from the source to the markets. And third, of course, the limitations themselves on the availability of renewable energy. Given the present state of technology, the amount of renewable energy available to the Philippines as a whole would not be adequate to meet the needs of a growing economy”[7].

Lotilla told his audience that the Philippines has made a decision to invest in RE and cleaner energy projects although “fullest assistance” is required “in order to be able to move forward significantly on this front” because RE projects “right now are costing us 2.5 to 3 times the cost of conventional sources of energy”[8].

Another challenge that the electricity sector faces is the difficulty of convincing the stakeholders, especially the communities, that the energy sector can meet the environmental standards of the government. As Lotilla emphasized:

“[t]he burden of showing or convincing our communities that indeed they can rely both on government and on private sector to be responsible in the implementation of environmental laws and standards is a burden that lies not on the community but upon us. And so here we need to harness the academic and scientific community that will allow us to give enough information to the communities that would give them a higher level of comfort as to the ability of the government and private sector to live up to the highest standards of environmental protection. This is a major challenge for us, but definitely it is not an impossible task”[9].

2.2 Considerations in Implementing RE Projects

Even for rural communities that may not be connected to the grid, the use of RE technologies in such areas should not only be aimed to provide electricity to the households, “but should also achieve measurable improvements in terms of addressing the poverty-environment nexus identified as both a source and a symptom of underdevelopment[10].” Thus, there is a need to design RE projects based on previous performance in the use of such technologies. Some of the lessons learned from the experiences of development institutions, such as the Asian Development Bank (ADB) and the World Bank (WB), in several countries, including the Philippines, draw attention to the need to: “(i) provide microfinance options for technologies with high front-end costs like solar photovoltaic energy systems; (ii) understand the market characteristics of renewable energy, including the willingness and capability of the poor to pay; and (iii) build capacity among stakeholders.[11]

Take the case of the use of solar cells or photovoltaic (PV) devices that convert sunlight into electricity. This technology “is most competitive” in far-flung communities that are not connected to the grid and do not require large supply of electricity[12]. The ADB designed a pilot project in Afghanistan that would show the following:

·         Improvement in the quality of life;
·         Successful program implementation through community-based approaches, and
·         Achievement of “sustainable human development” by enabling the communities to manage the technology.

The project’s design is primarily based on the assumption that the technology does not only provide “an appropriate solution for heating, cooking, and lighting in rural areas, but also contributes significantly to progress in education, health, agriculture, and rural industry and other income generation activities that could help reduce poverty.[13]

Although PV has been shown to be feasible, there are limited case studies that “directly resulted in tangible and measurable improvements in the income of poor communities on any significant scale.[14]” ADB cites the following as among the probable causes:

·         The high initial costs of technology, which the poor cannot afford;
·         The limited number of locally relevant productive applications suitable for alternative energy;
·         The poor communities’ limited or no access to supply markets;
·         The absence of efficient technology service providers and of suitable projects in remote areas that could be bankable through financial institutions; and
·         The lack of support from the central energy ministries, because their mandate is energy provision and not income generation for the poor[15].

2.3 Lessons Learned from Philippine Experience[16]

As of February 2003, about 5,409 or 18 percent of the country’s 41,999 barangays were still unelectrified. The country’s target is one hundred percent electrification of barangays by 2006. Since 1,671 or about 30 percent of the non-energized barangays have little or no prospect to be connected to the grid system, the government pursued the use of new and renewable energy (NRE) technologies to provide these areas with electricity.

As a matter of policy, the government decided to “facilitate the energy sector’s transition to a sustainable system with NRE as an increasingly prominent, viable, and competitive fuel option.” By the end of 2001, the country had “5,120 solar and 380 wind installations with contribution equivalent to about 0.3 million barrels of fuel equivalent (MMBFOE). From 1999 to 2001, about 1,000 barangays were electrified using NRE technologies including solar, micro-hydro, and hybrid systems.”

When the government sough ADB’s technical and financial assistance in 2002 to rehabilitate the RE projects in the country, the DOE has set as a long-term goal a 100 percent increase in NRE-based capacity over a ten-year period, i.e., by 2012. By 2012, the NRE contribution, specifically from solar, wind and ocean energy, was planned to reach three (3) MMBFOE. As early as 2002, the government has set the following targets:

·         Be the top geothermal energy producer in the world;
·         Be the top wind energy producer in Southeast Asia;
·         Double its hydro capacity by 2012; and
·         Expand the contribution of biomass, solar, micro-hydro, and ocean by 250 megawatts.

The government’s strategy to achieve the target includes accelerating the promotion and commercialization of NRE systems. The DOE also set up the NRE program with the following objectives:

·         Reduce poverty;
·         Enhance energy self-sufficiency;
·         Encourage private sector investment and participation, and
·         Reduce emissions by applying cleaner energy systems.

In addition, the DOE pursued the “gift of light” program, which was intended to provide electrification to all barangays and to provide the necessary rural infrastructure through NRE technologies. There were 1,500 barangays that were programmed to be electrified using NRE systems.

According to ADB, the country’s NRE project interventions are to a large extent dependent on the support by the development financing agencies, such as the Global Environment Facility (GEF), United Nations Development Programme (UNDP), WB, and bilateral agencies such as the Japan International Cooperation Agency (JICA) and United States Agency for International Development (USAID). These agencies have financed NRE technologies like solar, wind, and mini-hydro projects. To streamline and better coordinate these initiatives, DOE is presently implementing the Capacity Building for Renewable Energy Development (CBRED) project, which is funded by UNDP.

An estimated $100 million worth of NRE projects have been carried out in the Philippines since 1970. The projects were mostly initiated by funding agencies. These projects are technology-based. About 20 to 25 percent of these projects was rated as “less than successful”. Some of the projects, including the ADB-financed mini-hydro schemes in the early 1980s, were rated partly successful by the project performance audit report.

The reasons for failure are divided into the following categories:
·         Institutional problems, including improper management schemes;
·         Lack of stakeholder mobilization and beneficiary participation;
·         Technical problems, including lack of skill and spare parts for operation and maintenance as well as technology obsolescence; and
·         Financial problems, including high initial and maintenance cost, and high tariffs for consumers.

The ADB, however, noted the recently increasing number of successful NRE projects in the Philippines. The key factor that contributed to project success “is the close collaboration of the beneficiary communities, non-government organizations (NGOs), and private sector for the resource assessment, project design, construction, management, operation, and maintenance of the established NRE systems and related livelihood activities.” It also emphasized the need for future projects to “ensure productive use and sustainable operation of the installed NRE systems” by developing “a renewable energy-based community livelihood opportunities, such as installation of rice mills to increase the value from rice production, mini-ice plants for cold storage of fish products, and provision of skills and training, identification of potential markets, and marketing of products from such livelihood projects.”

Based on the assessment of 106 projects, visits to 23 project sites and workshops with stakeholders, a Technical Assistance Team from ADB came up with the following findings:

·         Most projects were unsuccessful due to non-adherence to standards and specifications in equipment installation; weak management structure and ineffective after sales service; and lack of ownership and interest in the project due to negligible monetary or non-monetary benefits;
·         Physical rehabilitation, community preparation and facilitation for livelihood linkages were demonstrated for one Solar Battery Charging Station (SBCS) in barangay Bunog in Palawan, and for the twin Micro-Hydro Plants (MHP) in barangays Talalang and Secec-an in Kalinga;
·         Capacity building of the involved stakeholders was facilitated for one more MHP in barangay Malabog, Davao and one hybrid      (solar-wind-diesel) project in barangay Atulayan in Camarines Sur that can be rehabilitated in the near future;
·         The main components of the rehabilitation program are: “(i) system redesign, retrofitting, and reinstallation; (ii) leveraging TA funds with that of local governments, entrepreneur and communities to ensure stakeholder commitment and ownerships; (iii) developing local capacity to manage the projects by selecting, training, and contracting women entrepreneurs in case of SBCS and the local rural energy service company for the MHP to operate and maintain the rehabilitated facilities; and (iv) identifying and facilitating livelihood options linked with the provision of electricity to ensure that NRE projects bring direct benefit to the community.[17]


In summary, the lessons derived from the country’s experience in implementing NRE projects point to the following:

·         The need to establish a proper scheme to manage the project;
·         Proper mobilization of the stakeholders and participation of the beneficiaries in all phases of the projects;
·         Ensuring the viability of the technology by building up the capability of the beneficiaries to operate and maintain the technology, and
·         Ensuring financial viability given the high initial and maintenance cost of the technology and the high tariffs for consumers by providing livelihood projects.

3. ESA GOVERNANCE PRINCIPLES AND SELECTED RE PROJECTS

The ESA governance principles include access to (a) information and transparency, (b) capacity, (c) participation and (d) accountability and redress mechanisms. Each of the governance principle has indicators as shown in Table 2.

3.1 Principle of Transparency and Access to Information

31.a Brief Description

This principle promotes meaningful decision-making by ensuring the transparency and clarity of decisions related to the granting of environmental compliance certificates and/or permits for power sector projects. This also helps in enabling relevant government agencies or bodies to clarify and communicate their environmental and social roles and mandates to the stakeholders.

3.1b Microhydro power project (MHP) in Tinglayan, Kalinga[18]

The beneficiaries of a 33 kW MHP installed in 1999 in Kalinga live in the three upland villages of Tulgao East, Tulgao West (collectively referred to here as Tulgao) and Dananao, located within the municipality of Kalinga, north of the Cordillera Mountain Region in Northern Luzon. The three communities are neighbors and a steep valley, through which flows Bunog Creek, separates Dananao from the Tulgaos. Bunog Creek, from where the MHP system gets its energy, forms a natural boundary between the two tribes. During the dry months, Tulgao is accessible by a four-wheel-drive vehicle. Dananao is never accessible by vehicle, but can be reached by a four hour hike along another route from Tinglayan. It takes around one hour on foot from Dananao to Tulgao.

The two Tulgao villages have 213 households, while Dananao has a further 124 households. The total population is estimated at 1600 people. There has been a steady migration of people to Tinglayan, Bontoc and Tabuk seeking education, work and marriage.

The people in Tulgao belong to the Tulgao tribe and the people of Dananao to the Dananao tribe, both are part of the larger Kalinga ethno-linguistic group. Conflicts among tribes in Kalinga, where disputes commonly arise from border or territorial and resource issues, are nowadays settled through the peace pact. Tulgao and Dananao have a long tradition of rivalry and disputes over territory and, as recently as 1997, a border conflict broke out between the barangays. It is worth mentioning that since the conception and installation of the MHP, any disputes arising between the two villages have been resolved without violence.

There are rice-drying areas in both communities, and recently rice mills were installed that run on the electricity provided by the MHP. A sugar cane press was provided in 2002, but was unused until it was connected to the MHP in November 2003.

Indigenous cultural practices have been sustained in these villages despite the inroads of religion and other external influences. Community rituals covering each stage of rice production in both wet rice terraced farming and swidden, following the traditional agricultural calendar, are still strongly observed and enforced by traditional elders. Community cooperation remains relatively intact for certain traditional activities such as harvesting, forest protection, and emergency assistance to members of the tribe. This strong traditional cooperation has been tapped to build the community-based MHP. The differentiated roles of men and women in Tulgao and Dananao villages are rooted in the typical warrior culture of these indigenous societies.
Aside from agriculture, there are other activities that augment the income of families especially during the lean months of rice and food shortages. These include basket weaving, carpentry, construction or road-building and blacksmithing. Men and women also carry out waged labor on other farms.
In general, both men and women in these upland communities are involved heavily in economic and community work. But rice cultivation has defined roles for men and women in these upland villages. Building rice terraces, land preparation and the repair of rice terraces are in the male domain, although women provide assistance.

Swidden farming in Tulgao predominantly involves women, who play the major part in the production of legumes and vegetables. Traditionally, it is the women who sow the legume seeds, although men dig the holes for the seeds to be sown. Legumes are sold bywomen in nearby towns for cash. As in wet rice agriculture, women select and store the seeds for the following crop.
Most of the community affairs related to school, church and festivities involve both men and women. Decision-making is a shared role on matters pertaining to households, the family and children, church and school. The women were observed as being predominantly active in school and church concerns.

Community labor for waterworks construction is in the domain of men. In the case of the MHP, however, women shared in some of the manual tasks such as hauling. This was a result of the community mobilization invoked by the lead organizations for this innovative project.

The 33 kW community-based microhydro project (MHP) located in the cluster of remote and upland barangays of Tulgao East, Tulgao West and Dananao in Tinglayan, Kalinga have benefited the three barangays. This project had enabled them to work together in its installation and subsequent operation. SIBAT had undertaken the technical assistance for this project, which was initiated by EDNP and funded by KEEP of Japan. The Tulgao Farmers Association has been the core organization, which has owned the operation and management of the project from its conception onwards. Its members represent the community in this project.

The MHP project site, which provides electricity to the barangays of Tulgao East, Tulgao West and Dananao, was initially surveyed in 1997. The feasibility of the MHP project was established in 1998 which led to the construction of the system and its commissioning in 1999. Research conducted by SIBAT as part of the feasibility study in November 1997 showed that Kalinga was among the least-served provinces in CAR, with less than 16% of its barangays having an electricity supply. The nearest point on an electricity grid was more than 30 kilometers away from the communities and, moreover, operated by MOPRECO whose area of operation was limited to Mountain Province and so did not cover these three villages. The nearest point on KAELCO’s grid, the operator most likely to connect Tulgao and Dananao, was, in 1997, more than 70 kilometers (km) away. Further, discussions with members of these electricity cooperatives revealed that these communities were unlikely to be connected to the grid within the next 10-20 years due to the distances involved coupled with the rugged terrain, which made connection expensive. As of 1996, MOPRECO and KAELCO stated that the installation costs for transmission lines only was about PhP 450 000 per km. Thus, alternative energy sources for these barangays needed to be explored.

The energy consumption in the community before the installation of the MHP was primarily for lighting and cooking, with additional battery-powered flashlights and transistor radios used by some residents.
Each barangay had a small-capacity diesel generator, potentially useable to charge batteries, but the five households in the three barangays who did own rechargeable (car) batteries would take them to Tinglayan or Tabuk to be charged. The Anglican Church had a solar PV system for lighting and battery charging connected to the multi-purpose center in Tulgao West, site of the clinic and reading center.

A needs assessment yielded the community’s desire for better lighting. The reasons given for this emphasis were the cost of kerosene, and the dirty soot that it left behind in the houses. A rice mill was also said to be a good option, to reduce the workload of women and children.
The feasibility study showed that, on average, PhP 38 per month was spent on kerosene, by the minority who used it. The average monthly expenditure on saleng was given as PhP 79 per household per year.

The community’s roles in MHP’s development were through community mobilization and counterpart contributions in the form of labor and locally procured materials. A community plan was developed for the entire installation phase. The roles of the community, the church and SIBAT were outlined in the plan. The community organized various committees to organize the tasks relating to their counterpart role. A watershed preservation and enhancement project was also undertaken in cooperation with SIBAT, with thousands of pine tree seedlings successfully planted. However, this project was discontinued in 2003, just over half way through its planned duration of 2000-2004.

The microhydro project was officially inaugurated in November 2000, with festive ceremonies attended by representatives from many indigenous villages in Kalinga.

The project has been fully operational since then, except for an eight-month shutdown in 2003. The lead organizations involved in the project were the Episcopal Diocese of Northern Philippines (ENDP) and the Sibol ng Agham at Teknolohiya (SIBAT), which divided the tasks between them of organizing the community and providing technical assistance. The project was funded by the Kyosato Experimental Education Program (KEEP). The total investment cost was projected as PhP 2,587, 450, with the value of community work and materials provided locally estimated at PhP 293,000.

The microhydro project uses the energy of moving water to turn a turbine, like a water wheel, which turns a generator and so produces electricity. Bunog Creek has a typical flow of 0.17 m3/sec. It is also tapped for the community’s communal irrigation system. To achieve a 30kW power output, the flow was diverted to a forebay site from where it drops 40 m to the turbine. The powerhouse site is approximately 1.5 km from Tulgao and 1.2 km from Dananao.

The project fulfilled its objectives of providing enough electricity for lighting and small appliance use in over 300 households; as well as in community buildings such as the church, the school and the health clinic. Although the capacity of the system is 30kW, only 4-5kW is currently being used. Two rice mills were installed in 2002, and a sugarcane press in November 2003. These facilities are powered during the day, thus generating additional income for the community and reducing people’s workloads.

The target beneficiaries of the MHP were the entire communities of Tulgao East, Tulgao West and Dananao, comprising of 300 households, plus various communal buildings including the church, a multi-purpose hall, school and health clinics. In practice, the MHP was able to reach around 80 percent of the total population of the three communities. The number of beneficiaries has fluctuated due to the migration of some families to other places. Most of the households have one or two light bulbs in their houses linked to the system.

Some families chose to invest in appliances, and in total there are 21 families with 24 appliances. Aside from own entertainment use, the VHS and televisions are used as additional sources of income, with children in particular paying to watch videos. Payment is one pine pithwood (a log or piece of wood from a pine tree), used for fuel, per show. It was commented that this causes problems within the community as children steal the pithwood. Most of the families able to afford appliances had income from outside employment, such as teachers and government employees.

Most appliance purchases are related to entertainment rather than alleviating household chores. Only the rice cooker, the food grinder and the two washing machines can be seen as in the latter category, and just one sewing machine was bought for productive purposes.

The output from the microhydro plant is primarily used for lighting, with some small appliances, plus for processing farm produce with a rice mill and sugarcane press, and some blacksmithing (making farm implements). The system generally operates from 4.40 pm to 7 am (based on an agreed policy), and during the daytime if needed for the rice mill or lighting for the school. As agreed by the community, each household pays a monthly tariff of PhP 25 for their first 10W bulb and an additional PhP 5 for each extra bulb. For appliances, a household pays an additional PhP 30 per month per appliance.

The MHP is managed by the Board of Directors, and there is a Manager responsible for the day-to-day operations. The Board of Directors is composed of three women and four men. The Manager is the pastor of the Episcopal Church. The MHP has a staff comprising one cashier/bookkeeper, three fee collectors and two operators.

3.1.c Lessons Learned

The MHP enabled some households to pursue income-generating activities, such as tailoring and rice milling, reduced the gathering of pine pithwood, instilled environmental awareness of the importance of forests and their conservation, reduced the incidence of respiratory and eye diseases, and abated the conflict between the Tulgao and Dananao tribes. The single biggest negative impact of the project has been, as a result of the commercial use of Video Home Systems to show films, is stealing to get the PhP 5 (in cash or in kind) payment to watch a film. This problem, however, is currently being resolved through community policies.

The case does not say whether the project promoted meaningful decision-making by ensuring the transparency and clarity of decisions related to the granting of environmental compliance certificates and/or permits by the national, local and community decision points. It did not also show how it helped in enabling relevant government agencies or bodies to clarify and communicate their environmental and social roles and mandates to the stakeholders. No related project has been found to illustrate such attributes of the governance principle.

3.2 Principle of Access to Participation

3.2.a Brief Description of the Principle

There are many ways by which this principle can influence the process and content of decision-making. Based on the indicators, this principle can help in setting the minimum environmental performance standards of the electricity sector, integrating the environmental considerations in the national plans and reforms, and enhance the environmental impact assessment system. It can also facilitate the engagement of stakeholders by the electricity providers, particularly in such areas as access to electricity, exercise of stakeholders’ rights, affordability of electricity prices, and formulation of policies to ensure that the RE technology will nor cause significant negative impacts that cannot be mitigated.

3.2.b PV-battery charging in Malitbog, Southern Leyte

The PV-battery charging station is implemented in Malitbog, Southern Leyte, particularly in the two remote villages of New Katipunan and Cadaruhan Sur.Malitbog (13 km), from the town market (also 13 km) and also from the nearest city of Maasin (55 km), than Cadaruhan Sur. It remains two kilometers away from the nearest electricity grid whereas Cadaruhan Sur is now connected.

Women in the two target areas, just like the men, are involved in development activities and share livelihood tasks with them. Women are prominent in growing and harvesting root crops and cut flowers, small-scale selling in the neighborhood, and layering the single abaca twine. Women also appear to be the more dominant gender in meetings; they often represent the households while the men tend to the farming and other tasks.

The traditional role of women focuses primarily on the rearing of children – from feeding, babysitting, providing child care and health care, to tutoring and overseeing their activities in school, at church and in the community. Apart from this, they have to ensure that food is available at every mealtime, and then wash the dishes and pots. Matters regarding family size and the futures of their children are usually discussed between couples and are mutually agreed upon.

It was mainly the men who were involved in providing assistance in the installation of the PV system: due to the heavy nature of the work, the skills required and their experience such as in hauling materials and equipment and in the installation of lighting fixtures. The women took charge in the preparation of food for the workers. The tasks of collecting charging fees and monthly dues, and keeping records were assigned among the women. Further, the project involves women in the operation and maintenance of household systems since they decide when to switch the light on and off, maintain the battery by cleaning the surfaces and terminals and monitoring when the battery needs to be recharged.

Overall, income from livelihood activities is generally low in Cadaruhan Sur both before and after the electrification program, and average in New Katipunan since the electricity projects provided no benefits to the vegetable garden and farming activities except in abaca twining, which was extended by four to six hours at night time.
Assessment of project performance in each of the two barangays provides insights into the implementation of the project. This off-grid BEP in Malitbog, Southern Leyte, has established the need for sustainable livelihood projects to pay for the electricity. However, the availability of electricity and lighting extends working hours, which can be used for productive livelihood projects.

Before electrification, products were only stored for family use in both barangays. Afterelectrification, products were also stored for commercial purposes in Cadaruhan Sur and only for commercial purposes in New Katipunan. Both barangays need additional training for new livelihood skills. Although program participants have gained new skills, possibly in anticipation of livelihood expansion and initiating new livelihood activities, Cadaruhan and Katipunan villagers still need additional training for new livelihood activities, which offer a realistic promise of income.

Environmental protection has always been considered. DAR, DA and LGU representatives visit and monitor activities in the two barangays. However, no specific targets have been set for monitoring such as assessing community rubbish and human waste disposal, smoke pollution in charcoal making and tree planting along the cleared and sloping sides of the two dirt roads. Generally, the areas of Cadaruhan and Katipunan, as well as the residents, appear environment friendly.

The women expected that the project would extend their available hours for household chores while the men thought they would have more time to repair farm tools and that the children would have better lighting for studying. The community was looking forward to the project enabling families to be together while listening to their favorite radio program or watching TV shows. The newly created Barangay Power Association (BAPA), under the leadership of the LGU, was the overseer and decision-maker in the installation of the PV-BCS and in wiring households. The systems were installed by the supplier. Men were mostly involved in providing assistance in the installation due to the heavy nature of the work, and their skills and experience in areas such as hauling materials and equipment and installing lighting fixtures. The women, however, took charge of preparing food for the workers.

After the PV-BCS and household lighting fixtures were installed, the BAPA was responsible for the operation and maintenance of the systems through hired technicians who were trained by the supplier to do simple repairs and troubleshooting. However, the task of collecting charging fees and monthly dues and record keeping were assigned to women. Further, the project has involved women in the operation and maintenance of the household systems since it is they who decide when to switch the lights on and off, and look after their battery by cleaning the surfaces and, terminals, and monitoring its condition to determine when it is to be recharged.

3.2.c Lessons Learned

The beneficiaries of the project are involved in the installation, operation, and maintenance of the PV system. Although the project had one clear positive benefit, i.e., the extension of abaca twinning by four to six hours per day, it contributed little, if any, in increasing the income of the beneficiaries. The two beneficiary barangays need training on new livelihood skills. Similar projects in other areas, such as the Batanes Alternative Energy and Enhancement Project, do not show details of the income-generating activities. Accordingly, “it is not clear that community solar battery charging stations save households money over regular battery use. Batteries still must be purchased and replaced regularly. However, if residents previously traveled far to a grid-based charging station, the travel time and costs may be eliminated.[19]

Although the stakeholders have always considered environmental protection as important, no specific target has been set for monitoring. The case also does show how the stakeholders were engaged in identifying the PV system, determining the electricity charges, and in formulating local policies to sustain the project.

3.3 Principle of Capacity

3.3.a Brief Description of the Principle

This principle refers to the government’s ability to provide the public with access to mechanisms related to environment and social decision-making, such as the environmental impact assessment system, and the ability of stakeholders, particularly the civil society organizations, to make use of such mechanisms. Its attributes include the “capacity of government and official institutions to act autonomously and independently; the availability of resources (both human and financial) to provide access; as well as the capacity of civil society (particularly NGOs and the media) to analyze the issues and participate effectively[20].”

3.3.b NorthWind Bangui Bay Project

The NorthWind Bangui Bay Project is a 33 MW (Phase I 24.75 MW and Phase II 8.25 MW) wind power plant located in Bangui Bay, Province of Ilocos Norte, Philippines. Plant production, at a projected load factor of 30%, is expected to produce in annual electricity generation of approximately 86.7 GWh. The project is expected to displace grid electricity generated from fossil fuels and thus avoid 56,788 tCO2e (tons of carbon dioxide equivalent), or 397,516 tCO2e over the first 7-year crediting period.

The first turbine was erected on March 12, 2005. The first turbine went on line, under testing conditions, and delivering the first electrical energy generated by the plant to Ilocos Norte Electric Cooperative (INEC), on April 13, 2005. Commissioning of the first 15 wind turbines under Phase I project occurred on May 28, 2005 when these units completed their initial 100 hour reliability performance. The Conditional “Taking Over Certificate” was issued to the wind farm contractor on June 20, 2005 for the operating turbines and the 30 MVA sub-station and the 69 kV Transmission Line. Phase II of the project is scheduled to be commissioned end 2007.

The project falls under Sectoral Scope #1 for Renewable Energy, with Project Activity described as “Grid-connected renewable power generation; electricity addition from a wind power project.”

The Project’s Sustainable Development Monitoring Plan (“SDMP”) covers the project’s area of influence and inhabitants. Based on audit findings, the project has provided silt barriers/canals around the earth excavations and boulders and placed excavated sands away from the tidal zone during construction to prevent possible silting of coral reefs. During construction, 80 percent of the workers were local residents. Other mitigation measures include the adoption of Transco Compensation Guidelines for possible damage to private properties, provision of safe oil and grease equipment and grease and oil monitoring, monitoring of bird collisions, and preparation of a social development plan.

As benefit to the host community, NorthWind has to remit one-centavo per kWh sold to DOE, which will disburse the amount according to the following: 50 percent of PhP 0.12/kwh for electricity fund, 25 percent of PhP 0.12/kwh for development and livelihood plan, and 25 percent of PhP 0.12/kwh for reforestation, watershed management, health and/or environment enhancement fund.

Emission reduction (tCO2) has also been documented and verified in 2005 and 2006 GHG displacements are estimated at 46,960 tons/year for CO2, 802 tons/year for SO2, and 1602 SPM/year.[21]

A five percent discount to the “effective cost of delivered electricity” based on the cost of electricity generated by NPC and TransCO cost of delivering the electricity to INEC will be the savings of the electricity consumers of INEC. The direct benefits to the Provincial Government of Ilocos Norte include REM and Chattel Mortage Registration Fees of PhP 10 million, about PhP 3.5 million real estate taxes to the Municipality of Bangui, business tax of about PhP 1.5 million per year, about PhP 750 thousand per year to host communities, direct employment for the local population, savings from the consumers of electricity in the Province, and a landmark commemorating Ilocos Norte’s position on global warming and environmental protection.[22]

In 2006, the NorthWind Bangui Bay Project generated savings in the amount of approximately US$ 1.4 million (PHP 70 million) for the electricity consumers of INEC.

Primary funding of the Bangui Bay wind project is through the Danish International Development Agency (DANIDA) , which provided a concessional loan sourced from ABN-AMRO and Nordea Bank of Copenhagen, Denmark, amounting to US$ 29.35 million. The loan is guaranteed by the Philippine Export-Import Agency (PhilExim)[23].

The DENR issued its first Letter of Approval in December 2005 to the NorthWind Bangui Bay Project, confirming that this project activity meets the national criteria for sustainable development. The Project is the first commercial wind power project in the country and in the ASEAN Region, and the first of its kind to be connected to the Philippine main.

The local stakeholders regarded the “project favorably due to the anticipated economic benefits in terms of increased investments, additional tax revenues, improved employment opportunities and transfer of technology… Unquestionably, the project catalyzes the growth in investments, tourism and commerce in the area and the Philippines as a whole and thus instills a greater sense of national identity, pride and commitment among Filipinos[24].”

3.3.c Lessons Learned

The Project’s designated operational entity, Det Norske Veritas Certification Ltd. (DNV), has found out that comments from the local stakeholders “were invited according to the Philippines Environmental Impact Statement (EIS) requirements. No major concerns were raised. Public stakeholders’ input has also been invited via the UNFCCC website, and no comments have been received”[25].

The Project was issued an environmental compliance certificate (ECC) #01 04 04-23 0027-0802 dated 23 April 2004 (Batching plant during construction), ECC#011 00 12-18 0036-1405 dated 18 Dec 2000 (Wind farm), and ECC #01 04 04-23 0024-1404 dated 23 April 2004 (Transmission Line and Sub-station).

The case shows at least two mechanisms by which the public can participate in environmental and social decision-making related to the wind project, namely, the environmental impact assessment system and comments system using the UNFCCC website. It, does not show, however, how the stakeholders used such mechanisms. It also does not indicate whether the stakeholders, such as civil society organizations and media, have the capacity to analyze the issues and participate effectively.

3.4 Principle of Accountability and Redress Mechanisms

3.4.a Brief Description of the Principle

This principle is necessary to hold public and private sectors answerable to the public as regards environmental and social petitions or complaints. It is necessary to ensure that stakeholders can protect their rights to information and participation, as well as challenge decisions that do not take their interests into account. It helps take into consideration the quality and accessibility of the judicial and administrative remedies for environmental and social claims, especially the potential social and environmental repercussions of policy changes or sectoral reforms.

3.4.b Planned Production of Biodiesel from Jatropha for Power Plants[26]

The Philippine Forest Corporation is a wholly government owned and controlled corporation; a subsidiary of the Natural Resources Development Corporation of DENR tasked to undertake agro-reforestation projects and mandated to derive economic productivity out of idle lands. It adapted a simple framework that represents the critical parameters of its program to create economic productivity that can be appreciated by serious investors and farmers as well.

As part of its mandate, Phil Forest shall work with industry stakeholders and partners (farmers, ranchers, woodlot owners, agro-forestry product buyers and producers, families) to achieve a vision of dynamic, self-sustaining and productive development by providing beneficiaries, as well as other stakeholders, access to capital and investments, identifying technologies, and building marketing capabilities to make available every opportunity for economic productivity, long term sustainability and proper ecological stewardship.

Its main goal is to provide assistance to the landless poor, first in acquiring tenurial rights and subsequently in providing support services to its beneficiaries. Through this framework, Phil Forest seeks to transform idle lands and unemployed citizens to productive lands and productive people that will ultimately result in transforming the economy of the Philippines.

Phil Forest is inviting the public to participate in their program to create productivity out of the vast idle lands in the country. It currently holds the rights to an initial area of 375,091 hectares of public forest lands, evidenced by a Memorandum of Agreement with the DENR signed last Sept. 1, 2006, which it will bid out to potential investors that are classified as follows: Landless Families, Small and Medium Enterprises, Cooperatives, NGOs, Single-Proprietorships and Entrepreneurs, Partnerships and Corporations, Industrial Plantation Developers, Local Corporations, and Foreign-owned corporations. This is part of an initial 2,000,000 hectares that will be transferred over a period of time.

Phil Forest, under its “Lupang Hinirang Program” and operating on the basis of the MOA with DENR, will begin distributing usufructuary rights to potential shareholders through auction process.

Phil Forest will conduct the identification, delineation and parcelarization of lands in preparation for the auction of lease-hold rights where the public, including government employees, are included. It likewise seeks to “auction” lease rights for Land to be Developed by potential developers to different types of investors.

Under the Transaction Structure of the 25-year Lease Agreement between Phil Forest and its lessees, Phil Forest retains legal ownership and/or management of the land, leases out the rights to develop the land, helps the lessee to acquire necessary permits from DENR to develop the land, and takes over the land if the Lessee defaults on the agreement to develop. The Lessee shall be the Highest-winning Bidder for the land, obtain the final approval for their Full Development Plan, implement the development plan, construct and install necessary assets, and handle the overall management of the project.

Pre-qualification criteria and requirements for different investor packages are as follows: between 1 to 10 hectare development size for individuals and farmers (family package), 11 to 500 has. for corporations, partnerships, single-proprietorships and cooperatives (SME package), and 501 has. and above for legal and foreign corporations (industrial package).

For the family package, the reserve price is PhP 500 per hectare and the minimum amount of development cost is PhP 1,000 per hectare. For the SME package, the reserve price is PhP 500 per hectare and the minimum amount of the development cost if PhP 20,000 per hectare. For the industrial package, the reserve price is the same but the minimum amount of development cost is PhP 40,000 per hectare.

According to Irwin Santos, former officer-in-charge of Phil Forest, the corporation is working on a project to produce biodiesel, which will be sold to Napocor to displace its bunker oil requirements for power plants. Phil ForestPhil Forest will provide PNOC with the jatropha seeds from the lessees[27]. According to Phil Forest, jatropha grows throughout the country, thrives even with little water, and can be grown quickly even in adverse land conditions. It has a productive age of 35 to 50 years and can start yielding fruits and seeds on the 10th month of its planting. will come up with an agreement with PNOC for the refinery.

Phil Forest estimates the cost of jatropha plant management at PhP 41,394 per one (1) hectare plantation using seedling as planting source. The operating expenses are PhP 25,916 for the first year, and PhP 15,516 per year onwards. The IRR is placed at 30 percent with NPV (@12%) of PhP 83,887. The payback period is four (4 ) years, while the yield threshold is up to 40 percent.

Phil Forest signed a Memorandum of Agreement with DENR-ERDB to qualify and estimate the amount of Carbon Sequestration of the Jatropha curcas L. plant species for purposes of the aforestation/reforestation methodology of the Clean Development Mechanism (CDM). Phil Forest’s plantations will be submitted as potential CDM projects before the upcoming commitment period in 2008. On June 25, 2006, Phil ForestState Colleges and Universities (SUCS). The contract covers capability building for Jatropha nursery establishment and plantation. On October 9, 2006, Phil Forest contracted the University of Santo Tomas to conduct studies on the optimization of oil extraction and production of biodiesel through the esterification process. signed the Memorandum of Agreement on Research and Development of Biofuels for Enterprise Development with 17

3.4.c Lessons Learned

Phil Forest plans to use crude Jatropha oil (CJO) extracted from Jatropha to produce Jatropha methyl ester (JME) based on trans-esterification with methanol, and to use the resulting Jatropha biodiesel fuel (JME-BDF) as a substitute for diesel fuel. Assuming that JME-BDF is carbon neutral, combusting it as fuel does not entail the discharge of CO2. The planned project, therefore, has the potential to reduce CO2 emissions.

It is not clear, however, how the jatropha oil will be extracted and collected from the lessees. There is also no information about the location of the JME-BDF production plant, and how JME-BDF will be distributed and at what cost. There are no copies of the project feasibility study and business plan that can be consulted. The interview also did not yield such information, although Mr. Santos said that the corporation has a feasibility study. The corporation’s Primer for jatropha plantation does not mention as reference its feasibility study. The Primer discusses mainly the agronomy side. Very briefly, it states that based “on the experience of India, 3 kilos of Jatropha seeds can produce 1 liter of crude Jatropha oil”.

According to Mr. Santos, Phil Forest has no environmental impact assessment study for any of its existing and proposed projects. Since there is no information as regards the total number of hectares that will be planted to jatropa, rated capacity of the JME-BDF production plant, as well as the construction of oil refining facilities and chemical storage facilities, it is difficult to determine the category of the proposed project under the country’s environmental impact statement system. It is also difficult to state the significant positive and negative impacts of the proposed undertaking.
Similar proposals in other countries point to the fact that the financial validity of this type of project does not approximate that of a general commercial direct investment undertaking. If the project is pursued without emission trading, it is deemed as not commercially viable.

Surprisingly, the corporation claims that the IRR of the investment is at 30 percent and the payback period is four (4) years. Its Primer on Jatropha for Biodiesel, however, states that the “return of investment ranges from 0.90 - 0.95 while payback period is between 2nd to 3rd year”. A review of a similar project in Tanzania[28]. showed that the financial IRR would be less than eight (8) percent

In summary, the case presented does not provide information regarding the corporation’s accountability to the public as regards its environmental and social performance given the absence of environmental impact assessment of its programs and projects. The public is left with judicial action as possible remedy for environmental and social claims, if there is any. It is also difficult for the stakeholders to determine the environmental and social viability of the programs and projects given the absence of project feasibility studies and business plans[29].

4. SUMMARY AND CONCLUSION

4.1 Lessons Learned in relation to the Philippine Agenda 21 Principles

The Philippine Agenda 21 adheres to 15 principles of sustainable development. About nine of these principles are related to the lessons learned from the reviewed RE projects. The principles and the corresponding key lessons learned are as follows:

·         Primacy of developing the full potential of the human being. Connecting households to the grid or an alternative system is providing a social service and an opportunity to contribute to human well-being in the form of CO2 reduction, natural resources regeneration, etc.;

·         Holistic science and appropriate technology. Choosing the right technology based on the needs or requirements of the target partner-beneficiaries, as well as the available resources;

·         Cultural, moral and spiritual sensitivity. Designing projects that nurture local or indigenous knowledge, practices, beliefs, ethics, particularly in areas where there are indigenous communities, people having the same religions affiliation, etc.;

·         Self-determination. Integrating this principle in the design of social preparation activities to ensure a meaningful and enlightened stakeholders’ participation;

·         Gender sensitivity. Recognizing the important and complementary roles of both men and women in the establishment, operation and maintenance of an NRE system;

·         Participatory democracy. Improving the capacity of stakeholders and interest groups to effectively participate in decision-making processes and take advantage in utilizing the participatory mechanisms;

·         Institutional viability. Providing capacity-building interventions to improve the ability of communities or people’s organizations to manage an NRE system as an enterprise;

·         Viable, sound and broad-based economic development. Purposive and planned identification of opportunities to earn additional income as a result of the availability of electricity in the community, and

·         Ecological soundness. Instilling environmental protection, rehabilitation and stewardship in communities, especially in areas where there are microhydro projects.

4.2 Governance and Ecology

These lessons imply that the value of the ESA indicators to governance, in general, is in answering the question: How to meet the needs of the present generation without compromising the ability of future generations to meet their own needs? This fundamental problem involves two components: One, the ecological problem, which covers the degradation of the ecological systems and reduction in the natural capital stock, and two, the political problem, which includes ineffective governance. The juxtaposition of the terms "ecology" and "governance" is, therefore, both meaningful and relevant considering that among "the most urgent tasks of our time is to understand the implications of ecology for social and political thought[30]." Here, governance is being summoned to address the ecological problem. On the other hand, ecology, both as a science and a paradigm, is seen as a philosophy that can enhance the art and science of governance.

It is clear that the basic problem has something to do with governance, which may be defined as "the capacity of the institutional environment" to manage the interaction among and between individuals and social groups, as well as the public agencies[31]. Robert N. Stavins explains the relevance of governance to ecological issues:

"The fundamental question that needs to be addressed by public policy in the area of environmental protection as we move into the next century is 'What is the appropriate role of government?' This question emerges along three fundamental dimensions in relation to environmental protection... (1) What is the appropriate degree of government activity; (2) what form should government activity take, and (3) what level of government should be delegated responsibility[32]?"

As early as 1994, it has been observed that "contemporary societies are unprepared for global transformations, and present forms of governance are in varying degrees obsolete and not equipped to cope with the needs and opportunities now emerging." Thus, novel approaches are needed to deal with the recent manifestations of traditional problems like "what constitutes 'the good life' and how governance should promote it.[33]"

Starting in the late 90s, it has become customary to compare the performance of the different countries using selected indicators that have governance and ecological dimensions. The 2008 Environmental Performance Index (EPI), for instance, centers on two broad environmental protection objectives, namely, reducing environmental stresses on human health, and promoting ecosystem vitality and sound natural resource management[34]. The Philippines is ranked 61st (the higher, the better) with a score of 77.9. Thailand is ranked 53rd with a score of 79. Vietnam places 76th. In the 2005 Environmental Sustainability Index (ESI), ThailandPhilippines and Vietnam ranked 77th and 127th, respectively[35]. was ranked 73rd, with the

The recent Human Development Report (1007/2008) of UNDP ranks the Philippines 90th and falls within the medium human development classification. Thailand is 78th, while Vietnam places 105th, but still in the same classification[36].

Comparative assessment of country performance requires governments to understand their strengths, as well as identify and exploit opportunities for improvement to make their ratings higher in the long term. Understanding the ESA indicators and using them within the framework of performance excellence in the electricity sector are, therefore, opportunities that must not be forgotten because governance generally "impacts directly on the lives of poor people who are less able to avoid the adverse consequences of poor governance and therefore bear a disproportionate share of the ill effects of systems and structures of governance that do not reflect their interest[37]."


[1] From the presentation of Usec. Mariano S. Salazar entitled “The Philippine Energy Situation, Oil Price Rise and Climate Change” presented during the ADB Conference on November 16, 2007.
[2] Senate of the Philippines-Senate Economic Planning Office, Electric Power at a Glance, July 2005, no pagination.
[3] Ibid. There were no data presented for Japan, China and Brunei for residential electricity rates.
[4] Ibid. Based on the forecasts of the Department of Energy, an additional 9,225 MW of new capacity is needed to prevent the power supply shortages.
[5] United States Department of Energy, Country Analysis Briefs, November 2006.
[6] Senate of the Philippines-Senate Economic Planning Office
[7] Raphael Lotilla, Sustainable Development and Energy: Energy for All; All for Energy, a speech delivered at the Opening of the “Asia Clean Energy Forum: Policy and Finance Solutions for Energy Security and Climate Change” on 26 June 2007 at ADB Headquarters, Manila, Philippines)
[8] Ibid.
[9] Ibid.
[10] Asian Development Bank, Technical Assistance to the Islamic Republic of Afghanistan for Poverty Reduction and Rural Renewable Energy Development (Financed by the Poverty Reduction Cooperation Fund), December 2004, p. 2
[11] Asian Development Bank, Technical Assistance to the Islamic Republic of Afghanistan for Poverty Reduction and Rural Renewable Energy Development (Financed by the Poverty Reduction Cooperation Fund), December 2004, p. 3)
[12] United Nations Environment Programme, Energy Technology Fact Sheet available at www.uneptie.org.energy (last viewed on August 7, 2007, 9:57 PM).
[13] Asian Development Bank, Technical Assistance to the Islamic Republic of Afghanistan for Poverty Reduction and Rural Renewable Energy Development (Financed by the Poverty Reduction Cooperation Fund), December 2004, p. 3
[14] Ibid., p. 2
[15] Ibid.
[16] This part of the paper is taken liberally from Asian Development Bank, Technical Assistance (Financed by the Danish Cooperation Fund for Renewable Energy and Energy Efficiency in Rural Areas) to the Republic of the Philippines for the Rehabilitation of Renewable Energy Projects for Rural Electrification and Livelihood Development, September 2003, pp. 1-2
[17] Asian Development Bank, Technical Assistance Completion Report, TA 4174-PHI: Rehabilitation of Renewable Energy Projects for Rural Electrification and Livelihood Development, no date, no pagination
[18] A lot has been said about the Casecnan hydroelectric project. In the final report of the electricity governance initiative assessment team, the team used the 150 megawatts (MW) hydroelectric plant and irrigation control facility on the Casecnan and Taan rivers. The project was conceptualized as early as 1983. It was issued an ECC in 1995 by the Department of Environment and Natural Resources (DENR) – about a decade earlier when the assessment team completed its study. Large-scale hydro projects generally have significant negative environmental impacts, especially if they are built as part of large dam projects. Due to the environmental impacts of such projects, hydro projects nowadays focus on smaller-scale projects. These projects generally have less than ten MW generating capacity. These include mini-hydro that has less than one MW, micro-hydro with less than 100 kilowatts (kW), and pico-hydro with less than one kW. Unless otherwise indicated, this part of the paper is lifted from the work of Feri G. Lumampao, Victoria Lopez and Lisa Go, Gender and Renewable Energy in the Philippines, supported by the APPROTECH ASIA (The Asian Alliance of Appropriate Technology Practitioners, Inc.)
[19] UNDP, The GEF Small Grants Programme at http://sgp.undp.org/download/SGP_Philippines2.pdf last viewed at 11:18 PM, February 25, 2008.
[20] Electricity Governance Toolkit, which is available online at http://electricitygovernance.wri.org
[21] NorthWind Bangui Bay Project Monitoring Report Volume 1, Monitoring Period: May 1, 2005 through August 31, 2006, In reference to: PDD Version 2, December 23, 2005 UNFCCC Reference Number: 0453
[22] See a PowerPoint presentation at http://www.doe.gov.ph/esummit/presentation/Workshop3%20-%20centeno.pdf (last viewed 10:45 PM, February 25, 2008).
[23] See http://www.northwindspower.com/ (last viewed 10:57 PM February 25, 2008).
[24] See “Sustainable Energy and Sustainable Tourism,” a paper delivered by DENR OIC Armando de Castro at the Ministerial Consultations of the Ninth Special Session of the Governing Council / Global Ministerial Environment Forum, Dubai, 7-9 February 2006.
[26] Unless otherwise indicated, this part of the paper is liberally lifted from http://www.philforestcorp.com/index.html (last viewed 11:06 pm February 25, 2008).
[27] Interview conducted by this writer on February 13, 2008, 8:30 pm at the Development Academy of the Philippines.
[28] Construction Project Consultants Inc., CDM Project Formulation Study for Jatropha Biodiesel Development in Tanzania Summary Report, March 2007.
[29] Mr. Santos confirmed on February 27, 2008 that he has emailed a copy of the feasibility study that covers only their model plantation. He was briefly interviewed at DAP around 6:30 PM.
[30]See Tim Hayward, Ecological Thought, An Introduction (UK: Polity Press, c. 1994).
[31]See Joachim Ahrens, Prospects of Institutional and Policy Reform in India: Toward a Model of the Development State? in Asian Development Review, vol. 15, no. 1, 1997, pp. 111-146
[32] See Robert N. Stavins, Environmental Protection: Visions of Governance for the Twenty-First Century, John F. Kennedy School of Government, Harvard University, July 23, 1998.
[33] See Yehezkel Dror, The Capacity to Govern, Report to the Club of Rome (Executive Summary). Ciculo de Lectores, July 1994.
[34] For details visit http://sedac.ciesin.columbia.edu/es/epi/downloads.html#content (last viewed on February 27, 2008 at 1:00 pm).
[35] See http://en.wikipedia.org/wiki/Environmental_Sustainability_Index (last viewed on February 27, 2008 at 12:50 pm). Note that the two reports are not comparable over time due to differences in data and methodology.
[36] UNDP, Human Development Report 2007/2008 Fighting Climate Change: Human Solidarity in a Divided World. UNDP: Palgrave Macmillan: NY, 2007.
[37] See Andres Gouldie, Is a Good Government Agenda Practical? An Approach to Governance. Talk given at Overseas Development Institute, March 25, 1998.