By Hernando Banal
THIS WEEK marks a significant milestone in Philippines-New Zealand relations.
As part of her first major visit outside New Zealand, Jacinda Ardern, the new Prime Minister of New Zealand, is here in the Philippines to further expand the trade and economic relationship between our two countries.
The significance of this visit underpins a long history of trade and economic cooperation, with last year marking 50 years of diplomatic relations. In 2016, the Philippines was New Zealand’s 15th largest export market and our overall two-way trade has remained steady at around NZ$1 billion over the past five years.
A key sector contributing to this important partnership is geothermal energy — which, simply put, is power derived from the Earth’s internal heat. The most active geothermal resources are usually found along major tectonic plate boundaries where earthquakes and volcanoes are located. One of the most active geothermal areas in the world is the Ring of Fire, which is home to the Philippines and New Zealand, as well as other countries such as Japan, Indonesia, and the United States.
Leveraging what could be considered a geographical drawback, New Zealand was an early adopter in harnessing this clean and sustainable energy source and is now a world leader in geothermal below-the-ground technology. There are few geothermal developments in the world where New Zealand companies have not played some part, either through providing services, technology, or training of country partners.
With similar natural environments, New Zealand’s connections with the Philippines’ geothermal energy sector date back to its initial development in the 1970s. Through technical assistance and a NZ$15-million development grant to the Philippines’ government, New Zealand helped to establish two geothermal fields in Tongonan and Palinpinon which are still productive and operational today.
The geothermal industry in the Philippines has since rapidly advanced, evolving to eight sites which each employ New Zealand technology and innovation and produce more than 12% of the country’s electricity generation.
A further example of how New Zealand’s expertise can be used to further develop the Philippines’ geothermal footprint, is by sharing best practice learnings on engaging with indigenous communities in regions such as Mindanao and Northern Luzon. Working with their own Māori communities, New Zealand has been successful in fostering strong relationships between landowners and developers, ensuring strong community support and engagement, with commercial benefits for all.
Taking Philippines’ expertise to the world
While the partnership in its early days focused on developing the Philippines’ capabilities in the sector, the enduring collaboration has helped the Philippines become the second largest producer of geothermal energy in the world, after the US.
Now considered to be a dominant player in geothermal energy, the Philippines is looking beyond its borders to tap into the under-utilization of geothermal resources in neighboring Southeast Asian countries such as Indonesia, as well as further afield in South America.
This maturity of the Philippines’ geothermal industry is now providing greater two-way benefits for both nations, with the Philippines bringing with them niche New Zealand technology to other countries around the world.
This week, in line with Ms. Ardern’s inaugural visit to the Philippines, we are proud to renew a geothermal commercial bilateral arrangement that provides new pathways for New Zealand’s commercial renewable energy sector to work with the Philippines government and private sector to develop critical energy sector needs.
The new arrangement strengthens the current relationship and expands the scope of the work to include government-level collaboration and the facilitation of private sector activities. Areas where increased cooperation is likely include the exchange of experiences and technical assistance in the field of geothermal energy exploration, development, and utilization through capacity building and sharing of information, knowledge and current trends on the geothermal energy.
The possibilities are infinite, with strong partnerships required to further develop efficiencies and new industrial applications for this clean, renewable and indigenous power source.
New Zealand has been fortunate to have nurtured a special partnership with the Philippines in geothermal, and we look forward to strengthening this collaboration over the coming years.
Hernando Banal is New Zealand’s Trade Commissioner to the Philippines.