Visayas energy sector continues to attract investors

DESPITE a drop in worldwide investments in the energy sector for two straight years, prospects remain bright in the Visayas as inquiries signify sustained interest among private investors.

Engineer Antonio Labios, regional director of the Department of Energy in Central Visayas (DOE-7), said investors continue to see potential in the Visayas, particularly in the area of renewable energy.

“I cannot give you specific figures, but here in the Visayas, we still have many investors. There have been inquiries, specifically from Chinese groups interested in investing in solar,” he said in a phone interview with Cebu Daily News.

According to the International Energy Agency (IEA), investments in the energy sector worldwide dropped for the second year as spending on upstream oil and gas projects continued to wane.

In its World Energy Investment report for this year, the Paris-based IEA said worldwide energy spending declined by 12 percent in 2016 to $1.7 trillion, representing 2.2 percent of the global gross domestic product.

True enough, Labios admitted that while interest in renewable energy investments has been rising, investments in oil exploration have not been so robust due to low oil prices in the world market today.

Labios said his office has received inquiries on where to build additional capacities in the region, particularly on Bantayan Island, Camotes Island, and the far southern and northern parts of Cebu province.

He said most of these inquiries came from parties interested to put up solar and wind generation facilities.

The energy official clarified that these were still inquiries and that his office will have to wait until these groups formally commit to build their projects.

He pointed out that it has always been the agency’s policy objective to attract more investments in the power sector.

Labios said additional power capacity is necessary to cope with the region’s increasing demand for power.

As of May 31, 2017, there are 14 committed private sector-initiated power projects in the Visayas with a total committed rated capacity of 467.77 MW.

Among these are six biomass power plants in Negros Oriental; two solar power projects in Iloilo and Toledo City, Cebu; three hydropower facilities in Iloilo, Bohol, and Aklan; one geothermal plant in Biliran; one diesel plant in Negros Occidental; and one coal-fired power plant in Concepcion, Iloilo.

There are also more than 50 indicative private sector-led power projects in the Visayas with a total indicative rated capacity of 3,627.22 MW.

Labios said that each year, the DOE holds an energy investment forum where they present opportunities in the country’s power sector to potential investors.

The Board of Investments (BoI), an attached agency of the Department of Trade and Industry (DTI), also offers fiscal and non-fiscal incentives to those who intend to build renewable energy projects, as this is one area the office prioritizes.

Among the fiscal incentives offered by the BoI are income tax holidays, reduction of rates of duty on capital equipment, spare parts, and accessories, as well as tax credits.

Non-fiscal incentives, on the other hand, include employment of foreign nationals, simplification of customs procedures, and importation of consigned equipment, among others.

While global investments in power have declined in the last two years, IEA executive director Fatih Birol said in a statement that investment in energy efficiency was increasing due to strong government policies in key markets.

Birol said this is good news, considering low energy prices and the need for government to ensure that supplies will be sufficient in the long-term.

“Our analysis shows that smart investment decisions are more critical than ever for maintaining energy security and meeting environmental goals,” said Birol.