The Philippines is one of the most attractive markets for clean energy investments, according to a recent study published by the Bloomberg NEF.
This year’s Climatescope Emerging Market Outlook showed the country ranked 6th out of 103 economies with a score of 2.29. This is the first time the Philippines was included in the study.
Only the Philippines and Thailand were included in the top 10 countries that are the most attractive for clean energy investment. Thailand was ranked 10th in the study.
“There has been staggered renewables build, and the country plans to hit 15.3 gigawatts of renewable-energy [RE] capacity by 2030 and total generating capacity of about 65 GW by 2040,” the study stated. “With a large increase in forecast demand there is potential for renewables to grab part of the pie.”
The study evaluated the presence of fundamentals, opportunities and experience in countries that will encourage the growth and development of clean energy investments.
The Philippines scored 2.95 in fundamentals, 1.54 in opportunities and 1.71 in experience. Fundamentals account for 50 percent of the score, while opportunities and experience account for 25 percent each.
These fundamentals refer to clean energy policies, power sector structure and regulation, as well as any local barriers that might obstruct RE development.
The study explained that a country with comprehensive and strong policies and a more liberalized power sector tends to be more welcoming to private investment than one with weaker frameworks and lesser degree of liberalization.
“Two major laws, the Electric Power Industry Reform Act and Renewable Energy Act, have incentivized growth in the Philippines’s renewable sector,” the study explained.
“The government has also opened more options for developers to sign power supply agreements directly with customers with a large enough demand. It also mandated utilities to facilitate retail opportunities for customers wanting renewable power through a Green Energy Option program,” it added.
Opportunities, meanwhile, referred to a country’s current and future electricity demand, its energy consumption, and its carbon-dioxide emissions from the power sector, along with overall price attractiveness, short- and medium-term opportunities for RE procurement, history of corporate commitment with sustainability and existing electrification rates.
The study stated that this aims to seek to encapsulate the future opportunities for clean energy growth available in a country.
In terms of experience, the study stated that this refers to a country’s volume of installed clean energy, historical levels of RE investment and the comprehensiveness of its nonmanufacturing clean energy value chains.
The Climatescope report also said markets with greater experience deploying RE capacity typically offer lower risks, lower technology costs and lower costs of capital for investors.
“A feed-in-tariff has spurred 1.052 GW of renewables growth, and behind-the-meter policies have achieved an impressive 50 megawatts of distributed resources. Over the past two decades, the Philippines went through significant energy reform, including opening the power industry to the private sector,” the study read.
Apart from the Philippines and Thailand, other countries that were included on the top 10 were Chile which ranked first overall followed by India, second; Jordan, third; Brazil, fourth; Rwanda, fifth; China, seventh; Mexico, eighth; and Peru, ninth.
For 2018 the Climatescope project was expanded and updated by increasing the number of countries included to 103, aside from 100 nations classified by the Organisation for Economic Co-operation and Development (OECD) as less developed.
The survey also includes three countries—Chile, Mexico and Turkey—that are an important part of the developing-nation story but are not technically classified as non-OECD. As a result of this expansion, Climatescope now offers a comprehensive snapshot of virtually all developing nations.
This year’s Climatescope Emerging Market Outlook represents the collective effort of 42 BloombergNEF analysts who made 54 country visits to collect data and conduct interviews. The study was again supported by the UK Department for International Development.
