Jakarta Globe, Dion Bisara, November 6, 2013
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| The geothermal power power plants in Mount Apo in Mindanao, Philippines, help to reduce the nation’s reliance on fossil fuels. (JG Photo/Dion Bisara) |
Indonesia
does not have to look very far to find the best way to tap geothermal energy,
which potentially is located in protected, remote forests.
As
Indonesia struggles to find a balance between the development of geothermal
resources, forest conservation, and development, the Philippines has shown how
that can be achieved.
The
Philippines gets 14 percent of its electricity supply from geothermal power
plants and the nation is the second-largest producer in the world of such
energy by capacity, after the United States.
Indonesia
can only tap 1.4 percent of its estimated 28,994 megawatts in reserves — the
largest in the world — as the country is yet to resolve issues such as
conflicting laws that forbid geothermal exploitation in conservation areas,
pricing, and opposition from indigenous people.
Agnes de
Jesus, senior vice president for environment and external relations at the
Energy Development Corporation — the Philippines’ largest geothermal power
producer — recalled similar challenges in 1988 when the Philippine government
decided to build geothermal power plants in the middle of Mount Apo Natural
Park following the El Nino weather phenomenon that reduced hydropower
generation.
The plan
was highly controversial at that time, de Jesus said, citing the lack of legal
basis to establish plants in a conservation area, which is also an ancestral
domain for indigenous people.
“We
conducted scientific surveys on the site to asses the environmental impact and
held many consultations with stakeholders to explain about the project,” she
said. It took four years for the project to start after securing approval from
indigenous people and a presidential decree that granted exploitation permits
in the forested area.
The EDC
currently operates two generators in Mount Apo — a dormant volcano on Mindanao
island, which is in the southern Philippines — with total capacity at 106
megawatts. The power plants use about 15,000 metric tons of steam tapped from
underground reservoirs to power the generators, and as much as 40 percent of
the steam escapes to the air because of evaporation.
Steam
generation
The steam
is captured through pipes that go through the turbines, and the steam then goes
through a series of pipes that condense the vapor into water, which is then
cycled back into the underground reservoir to produce more steam.
That steam
loss cannot be converted back into water through this process, so conservation
remains critical for the Mount Apo geothermal project because the forest
captures rainwater and replenishes the reservoir, de Jesus said.
“The key to
Mount Apo’s geothermal coexistence with the protected area or park was to
locate it in less critical sites of the forest — in the openings or amongst
secondary vegetation,” she said.
The
company’s conservation efforts range from forest patrols to reforestation using
native species of plants, de Jesus said.
Mount Apo
is considered to be one of the richest botanical mountains in Southeast Asia,
hosting hundreds of rare, endemic and threatened species of flora. It is being
proposed as a world heritage site by Unesco.
Since the
geothermal project commenced in Mount Apo, the national park was better
protected from encroachment, thanks to increasing efforts from the EDC and the
government in securing the geothermal plant site, said Eduardo Ragaza, chief of
protected areas and wildlife division at the Philippines’ Department of
Environment and Natural Resources.
The
geothermal project also benefits indigenous people.
Samuel
Asicam Sr., chairman of the Cotabato Consultative Tribal Council, which
represents some indigenous people in Mount Apo, remembered the days when the
natives’ houses were only made by wood, bamboo splits and banana leaves.
“Now we
have good houses, many have refrigerators,” Asicam said. “But the best thing is
we can have access to education, and we believe it will change our lives.”
The EDC projects
provide support for indigenous people, including scholarships, free
electricity, emergency health care and assistance in developing livelihoods for
them.
Divina
Sillador, manager at Lake Agco Hot Spring, which is the only resort within the
park, said the arrival of EDC provided jobs. She also said the indigenous
Ilomavis tribe benefited from the subsidy on their electricity bills — meaning
that the cost for electricity at less than 650 pesos ($15) was free. Divina is
an Ilomavis.
All
children go to school now, she said, and most of them return to work with the
EDC project. Last year, 259 people worked at the facility.
“I hope
some day the indigenous people can lead the project,” she said.
Mario C.
Marasigan, a renewable energy management director at the Philippine Department
of Energy, said success at Mount Apo provided a platform for the country to
continue tapping its geothermal potential. The Philippines aims to be the
world’s largest producer of geothermal energy by 2030, increasing its installed
capacity from 1,848 MW to 3,293 MW, Marasigan said.
“We want to
achieve energy self-reliance,” Marasigan said, “Unlike Indonesia, which has
coal and fuel, we have very [little] of it.”
Investment
incentives
In order to
achieve its goal, the Philippines provides generous incentives for companies to
develop geothermal in the country, including an income tax holiday lasting
seven years; a 10-year duty-free import period on machinery, equipment and
materials; and a 10 percent corporate tax after the end of the seven-year tax
holiday, which is lower than the normal 30 percent corporate tax, Marasigan
said.
And thanks
to a market-driven electricity pricing policy in the Philippines, companies
like EDC are able to take risks in exploring for new resources while having
sound assurance on profitability, Marasigan said.
Such
incentives may be small compared to the 17 million barrels of
fuel-oil-equivalent — valued at $1.6 billion at current rates — that the
country saves annually from having geothermal power plants.
Only 5
percent of the Philippines’ energy sources comes from fuel — which is mostly
imported — and that has helped keep the country’s current account balance in
the surplus for the last 15 quarters.
By
comparison, Indonesia’s current account reached a record deficit of 4.4 percent
of the nation’s gross domestic product in the second quarter, after seven
consecutive quarters being in the red as reliance of fuel imports grows amid
its declining oil production.
Indra Sari
Wardani, WWF-Indonesia Ring of Fire coordinator, said EDC’s geothermal project
in Mount Apo shows that engagement with indigenous people and forest
conservation can be achieved.
“As one of
the geothermal projects located within in conservation forest, EDC has one of
the best practices,” Sari said.
Ring of
Fire is a WWF program launched in 2011 to promote sustainable production and
use of geothermal energy in the Philippines and Indonesia. WWF identified
challenges in Indonesia’s geothermal energy, including a subsidy policy that
distorts the market price for electricity, and the law on conservation forests
that prohibits mining activities — under which geothermal energy is
categorized.
The
Ministry of Energy and Mineral Resources has estimated that 42 percent of the
country’s geothermal resources are located in protected forest areas.
Bambang
Purbiyantoro, head of preparation and evaluation for geothermal work area
division at the energy ministry, said the government is now working on revising
the geothermal law to resolve the issues.
“In the end
the main challenge is the politics,” Bambang said.
The Jakarta Globe was invited by the WWF’s Ring of Fire project to observe the Mount Apo geothermal project in the Philippines last week.
The Jakarta Globe was invited by the WWF’s Ring of Fire project to observe the Mount Apo geothermal project in the Philippines last week.
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