By EUGENE W. FIELDS

Troels Carstensen, managing director and vice president of UPC wind management, said on Tuesday at least 102 hectares in Pagudpud have been leased by UPC with the Department of Environment and Natural Resources (DENR) for 25 years. Under the lease agreement, UPC will utilize the government land for the renewable-energy project with an annual land lease of P2.7 million.

That same day, Carstensen handed over two checks amounting to P2.7 million as first-year payment of the land-lease agreement to the DENR, represented by regional director Remillio Atabay, at the office of Ilocos Norte Gov. Michael Keon.

Earlier, wind developers from UPC Asia had conducted wind survey in the municipalities of Pasuquin, Burgos and Pagudpud and also in the provinces of Pangasinan and Nueva Ecija. Study results, however, showed that Pagudpud has the best wind source, Carstensen said in an interview.

Carstensen said investors and developers of renewable energy like UPC have become interested to invest in the country following the national government’s signing of the renewable-energy law that gives incentives to foreign and local developers, suppliers, manufacturers and end-users of renewable energy.

Republic Act 9513, otherwise known as the Renewable Energy Act of 2008, specifically ensures that a big percentage of the government share that goes to the host community shall be used to lower the electric bill of consumers that do not use more than 100 kilowatt-hours per month.

Also, the corporate-tax rate of renewable energy-generation companies has been lowered from the usual 30 percent to just 10 percent after the seven-year income-tax holiday. The law states that recipient companies may only use this incentive if they pass on the savings on their income-tax expenditures to consumers in the form of lower power rates.

In addition, farmers who are engaged in the plantation of biomass resources such as, but not limited to, jatropha, coconut and sugar cane do not have to pay duties and value-added tax for all types of agricultural inputs such as fertilizers, insecticides, pesticides, machineries and others.

The Pagudpud wind farm, which is next to the neigboring Bangui wind- power project of Northwind Development Corp., hopes to establish cooperation with Ilocos Norte in terms of producing environment-friendly electricity not only for local residents here, but also in its neighboring provinces, Carstensen said.

The second wind-power farm in the province cost about $480 million, which was obtained through a combination of export credit from Europe and in cooperation with local banks for renewable-energy projects, Carstensen added. He reported that development in the 102-hectare land area will commence before the end of this year while the construction of the first UPC wind turbine will start in early 2010.

For his part, Keon told residents here that with the increasing number of foreign and local developers interested in renewable energies such as the establishment of wind farms, he expects that electricity rates will definitely be lowered.

Under a memorandum of understanding  signed by the Department of Environment and Natural Resources, Philippine Coconut Authority, Bio-Energy Northern Luzon Inc. and Pacific Bio-Fields Corp. (Philippines), around 400,000 hectares of denuded and unutilized public lands in northern Luzon including this province will be planted with coconut trees. The project got the support of the Arroyo government when the President met with Japanese stakeholders in Tokyo, Japan.

By August, Ablan reported that a coconut mill will be constructed in Pasuquin, saying the project is expected to generate more jobs.

In 2008 a massive coconut-planting project was started in barangay Caunayan, Pagudpud, where about 1,500 hectares were planted with coconut seedlings.

The Bio-Energy North Luzon Inc., headed by its president, Salacnib Baterina, is implementing the planting of more coconuts for feedstock to produce coconut methyl ester (CME).

Based on a feasibility study done by the Japan Bank for International Cooperation, the coco-diesel plant is expected to produce at least 2,000 tons of CME per month.

The coconut-processing plant’s output will be exported to Japan. Based on Japanese standards, it accepts only CME as the biodiesel component for its diesel mix. Japanese law requires that 5 percent of CME shall be mixed with fossil diesel for its buses.

According to Japanese investors, Tokyo’s buses alone will need all the initial output of the plant. Japanese industries also prefer CME in their energy use.

Aside from coconut, the implementing company and its Japanese backers also plan to plant ginger, taro and pineapple between the coconut trees to maximize land use.

A study of the Austrian Bio-Fuels Institute in 2007, entitled “Innovative Biodiesel,” states that coconut crop is the ideal second-generation biodiesel feedstock.

The crop is fast-growing, and can typically be harvested within 3.5 years of planting and bear fruit continuously for more than 60 years. The crop also flourishes even when grown in poor-quality soil and marginal land normally unfit for conventional agriculture use.

Due to efficient land use, the growth of coconut trees does not compete with valuable food production, making it a sustainable fuel feedstock. Also, it is carbon-neutral as it is not derived from fossil fuels.

Compared with other energy crops, the study says that coconut crop has a significantly higher oil output. A hectare of coconut plantation can yield an estimated 4,420 liters of coconut oil per year, compared with 1,122 liters for rapeseed and 467 liters for soybean.

The coco biodiesel also offers better performance, is easier to refine and fares better in terms of fuel economy than other types of energy crops. Coconut oil behaves almost like diesel fuel with its smooth combustion performance behavior, and can act as an ignition improver when blended with conventional petrodiesel, and produces the least nitrogen-oxide emissions among a large group of crop-derived oils, according to a European Commission project report.