Revised First Interim Report
Technical Assistance to Manufacturers of RE Equipment Subcontract
revised first interim report
june 2006
Prepared by:
International Resources Group – Philippines, Inc.
Unit 2303 Medical Plaza Ortigas Condo.
25 San Miguel Ave., Ortigas Center
Pasig City 1600
TABLE OF CONTENTS
Executive Summary
1. Introduction 4
2. Scope and Coverage of the Report 4
2.1 Technologies Considered 4
2.2 Definition of Terms 5
3. Contents of the Revised First Interim Report 5
ANNEXES
Annex I Assessment of Existing Capabilities of Local RE Equipment Manufacturers
Annex 1-A Methodology in the Assessment of Strengths and Weaknesses of Local RE Equipment Manufacturers
Annex 1-B Profile of the Manufacturers included in the Assessment
Annex 1-B1 Assessment Done on Integrators of Solar PV Systems
Annex 1-B2 Assessment Done on Suppliers, Distributor/Dealer of Pico-Hydro Systems
Annex 1-B3 Assessment done on Manufacturers of Biomass Cookstoves
Annex 1-B4 Assessment done on Manufacturers of Biomass Briquettes
Annex II Standards Prioritization and Development
Annex II-1 Documentation of the RE Stakeholders Forum (Invitation Letter, Presentation Materials and Proceedings)
Annex II-2 Bureau of Product Standards Directives
Annex II-3 Minutes of the Meetings of the Different TWGs
Annex II-4 Sample Resolution
Annex II-5 Draft Letter of Endorsement of the Standards and Guidelines for the Different Renewable Energy Technologies
Annex III Methodology and Results on the Assessment of Operating Performance of Existing RE Systems, Equipments and Components
1. PV Solar Home Systems
2. Solar Water Heater
3. Solar Battery Charging Station
4. Mini-Hydro Plants
5. Micro-Hydro Power Plants
6. Wind Pump
7. Biomass-Fired Dryer
8. Biomass-Fired Cookstoves
9. Biomass-Briquette as Fuel for Cookstoves
EXECUTIVE SUMMARY
The RE stakeholders’ consultation and assessment done through discussion with key players in the different RE technologies identified the solar PV system suppliers/integrators, suppliers/distributor/dealer of picohydro systems, manufacturers of biomass cookstoves and briquettes to be the industry players that can be considered under the “RE MANUFACTURER” category. The term ‘Manufacturer’ covers firms that do any or a combination of the following activities: manufacture, supply, distribute/deal, or integrate individual components of the aforementioned RE systems.
The methodology for the assessment of the capabilities of local RE equipment manufacturers were a combination of plant visits, survey/Interview (guided by a survey sheet), and the use of experts’ assessment.
The assessment process considered the following as guide parameters: tools and equipment, materials, people and skills, facilities, systems policies and procedures, other resources and after-sales service, as may be applicable to the particular manufacturer. The assessment includes the strength as well as the weak areas identified in both the technical and non-technical aspects of the operation of the RE manufacturer and the recommended interventions for each weak area identified.
A total of 20 companies were assessed – 14 solar PV suppliers/integrators, 2 suppliers/distributor/dealer of picohydro systems, 3 manufacturers of biomass cookstoves and 1 manufacturer of biomass briquettes. The needs assessment was done through a combination of plant visits, survey and expert assessment.
From a total of 18 respondent RE manufacturers, around 70% are corporations. Single proprietors represent 28% of the total population, while the remaining 6% are non-profit NGOs. Most RE Manufacturers are relatively new, being in operation for less than 5 years. There are also a number of manufacturers which have been in the industry for more than 16 years. Almost 80% of respondent RE manufacturers are engaged in both retail and wholesale trade. The remaining 20% are into retailing only. Majority of the respondents are solar PV suppliers/integrators and cookstove manufacturers. Majority of the respondent RE manufacturers have invested between P15M – P100M for their businesses. There are also a number of manufacturers with less than P3M capitalization. Almost 98% of respondent RE manufacturers offer/supply their products nationwide. Only a handful of RE manufacturers have limited their markets in either Luzon or Visayas.
The assessment results on solar PV integrators showed that majority of the gaps/weaknesses are in the pre-integration phase especially in the sales/marketing activities. Industries in this sector require assistance in the development of marketing plan, development of information, education and communication materials (IEC) as well as establishing partnerships with microfinance institutions which provide financing to the target markets of solar PV systems mostly in rural areas. The latter is ranked highest among the identified gaps/weaknesses of the sector (50% of those assessed have this as gap/weakness) followed by the lack of trained and qualified engineers and technicians (43%) and the lack of testing facilities (36%) dominate the weaknesses of the industry. Recommended interventions cut across the provision of technical assistance to provision of capital for the establishment of testing facilities for solar PV components.
For supplier, distributor or dealer of pico-hydro systems, the lack of effective marketing program (possibly due to the lack of ready market), the lack of testing facilities and the lack of service centers are the three (3) major gaps/weaknesses that have been identified in this sector. Moreover, the lack of market information on areas where there is potential for use of pico-hydro systems, the lack of information dissemination activities to prospective users on the merits of the technology, as well as technical issues such as the lack of smaller capacity systems suited for individual households and the apparent lack of trained engineers and technicians still prevail in the industry. Recommended interventions include the provision of information on geographical areas where pico-hydro systems maybe viable to training interventions as well as the establishment of the needed testing facility for pico-hydro systems, among others.
For manufacturers of biomass cookstoves, gaps/weaknesses which are common to all players (100%) are the poor quality of metal stocks available, the lack of waste management protocol, the lack of safety precautions, the lack of test standards, and the negative feedback on ignition efficiency & overall stove design. Minor gaps/weaknesses are the lack of capability in marketing as well as the prevalence of usually undersized materials (67%) and (33%), respectively. Much of the interventions required maybe addressed in-house such as the need to hire additional sales force to expand marketing coverage. Other interventions require a sustained coordination among the suppliers, the government regulators (in this respect the DTI) as well as actions for implementation by the stove manufacturers themselves.
For manufacturers of biomass briquettes, identified gaps/weaknesses which are administrative include the difficulty in securing the necessary permits from concerned government offices, to competition in raw material availability due to competing demand for the raw material use, as well as the lack of capability to test the technical performance of the product. Recommended interventions include the sustained coordination with government agencies to lobby for a more expedient processing in securing permits, the development of strategy to establish competitive pricing and long term contracts with suppliers and the building up of capability in the testing of product performance especially on fuel emissions testing.
Competition with imported products of similar use is apparent in the local market as is competition in the international market of our local products. Hence, the necessity to develop standards and best practices guidelines which will serve as benchmarks of quality will enhance the competitive edge of the company in both the local and international market.
In terms of manufacturing practices, the poor quality of metal stocks available and the availability of undersized materials hinder the manufacturing capability of biomass cookstove manufacturers.
As to installation practices for both solar PV and pico-hydro, the lack of trained engineers and technicians, coupled with the absence of service centers in areas where there are existing installations, affects the quality of installed systems and the useful life of the products. Local manufacturers vary as to the size and organization of areas they allocate for their manufacturing activities.
Potential benefits that will entice the local RE manufacturers to cooperate in the implementation of the technology improvement program are the possibility for assistance in attaining global competitiveness, eligibility to participate in the DOE capacity building program, only certified RE products will be eligible for DOE/government procurements, certification will set apart their products from the uncertified ones of their competitors; and a level of assurance of their customers’ confidence.
The following components/practices were prioritized in the development of standards and guidelines: For Solar Technology – Inverters for Stand-alone Photovoltaic Applications; Battery Charge Controllers; D.C.- Supplied Electronic Ballasts for Tubular and Compact Fluorescent Lamps and Best Practices for the Design, Specification, Installation and Maintenance of Solar PV Systems. For Mini-hydro – the components that were prioritized were: Generator, Turbine, Switchgear; and Governor. In addition, guidelines in the development of mini-hydro projects were prepared. These are: Guidelines for the Conduct of Hydrology Study for Minihydro Projects, Guidelines for doing Geologic Study for Minihydro Projects, and Guidelines for Doing the Civil Works of Minihydro Projects. For Pico-hydro – the components that were prioritized were: Picohydro Turbine while for Micro-hydro, the components that were prioritized were: Microhydro Turbine–Cross Flow Turbine, Electric Transmission Lines, AC Generators, and Speed Controllers. For Wind – only guidelines were developed. These were: Guidelines for Wind Energy Project Development for Power Applications and Guidelines for Wind Energy Project Development for Non-Power Applications. For Biomass – a Guidelines for Biomass Equipment Selection was developed
Assessments of operating performance of existing RE systems, equipment and components for both power and non-power applications were likewise conducted. Specific technologies and applications included in the assessment are: solar PV Battery Charging Station, microhydro, minihydro, biomass briquettes, wind pumps, solar water heater, and biomass-fired grain dryer.
1.0 Introduction
This report embodies the agreed revisions suggested by the REIAC Component 6 Subcommittee and the CBRED-PMO on the Scope of Work for the 1st Interim Report of the above subcontract.
The details of the Scope of Work are presented below for reference:
1. Assess existing capabilities of local RE equipment manufacturers and evaluate performance of Philippine-manufactured systems and equipment
a. Identify and organize the Philippine RE manufacturers, suppliers and integrators to participate and cooperate in the technology improvement program
i. Conduct consultation meetings and develop criteria to prioritize RE systems and equipment for standards development. Systems/ components of RE industry sub-sectors with current programs on or future plans for development should be considered in the prioritization
b. Develop methodology on how to assess the operating performance of existing RE systems, equipment, and components of both power and non- power equipment installed in the country.
i. Conduct the assessment on operating performance of existing RE systems equipments, and components of power and non-power equipment installed in the Philippines
ii. Manufacturing / installation practices should also be assessed
c. Conduct plant visits and assess capacities, capabilities, and production processes of participating Filipino RE manufacturers and systems integrators to make them competitive with imported goods, e.g. in terms of quality control and technical processes efficiency
2.0 Scope and Coverage of the Report
2.1 Technologies Considered
Based on the RE stakeholders’ consultation and assessment done through discussions with major players on the different RE technologies, it was assessed that only the technologies below have players which can be considered under the “RE Manufacturer” category. The other players which constitute the bigger population of the RE industry fall appropriately under the “Engineering Service Providers” category which is covered by the “RE Engineering Service Industry Development (ESID)” Subcontract. The RE technologies covered in this report are:
1. Solar Photovoltaics (PV);
a. Suppliers and Integrators of solar PV systems (both for individual solar home systems and battery charging stations, and for community applications – e.g. street lighting, refrigeration, water pumping);
2. Hydro (Pico);
a. Supplier, distributor or dealer of pico-hydro systems;
3. Biomass
a. Manufacturers of Biomass Cookstoves; and
b. Manufacturers of Biomass Briquettes
2.2 Definition of Terms
For the purpose of this report, the term “Manufacturer” covers firms that do any or a combination of the following activities: manufacture, supply, distribute/deal, or integrate individual components of any of the above RE technologies for use by customers. For clarity, the following are the working definitions of the above terminologies:
1. Manufacturer - means any person/firm who/that manufactures, assembles or processes the renewable energy component/product except that if the component/product is manufactured, assembled or processed for another person/firm who attaches his own brand name to the component/product, the latter shall be deemed the manufacturer. In case of imported component/product, the manufacturer’s representative or, in his absence, the importer shall be deemed the manufacturer. Also, a person/firm engaged in the manufacture of renewable energy component/product, including parts and accessories thereof.
2. Supplier - means a person/firm, other than a consumer, who/that, in the course of his/its business operation, solicits, offers, advertises, or promotes the disposition or supply of a component/product or who other than a consumer, engages in, enforces, or otherwise participates in a business transaction.
3. Distributor/Dealer - means any person/firm to whom a consumer product is delivered or sold for purposes of distribution in commerce, except that such term does not include a manufacturer or retailer of such product. Also, a person/firm involved in the buying and selling of renewable energy component/product, including parts and accessories thereof.
4. Integrator – means an assembler of whole renewable energy system (e.g. individual solar PV system which is composed of a solar panel, battery charge controller, inverter, if any, battery, lamps as well as the wirings, switches, and outlets inside the house). The person/firm specializes in bringing together hardware to build renewable energy systems for deployments mostly in rural areas. The term can be loosely used to describe any individual or firm that builds systems from multiple components.
3.0 ContentS of the Revised First Interim Report