Manila Times.net
Published : Monday, September 19, 2011 00:00
Written by : EUAN PAULO C. AÑONUEVO
RENEWABLE energy developers backed projections made by the National Renewable Energy Board’s technical working group that green power sources can help push prices down at the electricity spot market.
Ramon Abaya, chairman of both the Cagayan Electric Power and Light Co. Inc. and Philippine Solar Power Alliance, said the need for oil-based plants during peak demand will decrease since the grid will prioritize the dispatch of RE plants.
”Because RE are must-run plants, they bring the clearing price at the WESM down and help stabilize prices thereafter,” he said.
The Wholesale Electricity Spot Market is a trading platform where in power generators sell their excess output to bulk buyers such as distribution companies. Those with the lowest price offer gets priority dispatch. The market price that would be paid to generators is set based on the last offer that meets the demand.
The power grid uses RE sources tagged with the “must-run” label first but their operators do not nominate a price to the WESM. Instead, they get paid based on the market clearing price, or the last offer that will satisfy demand for a particular hour.
And because RE plants push the “stack” of generating plants that could operate higher, oil-based and other generating facilities that are expensive to run are pushed further up the chain of dispatch order.
An NREB technical group earlier simulated WESM prices at their peak in February 2010 with 200 megawatts of a mix of solar, wind, hydro and biomass plants. It found that prices at the spot market then — which averaged P9.80 per kilowatt-hour—could have been cut by P3.00 per kilowatt-hour.
The simulation was consistent with experiences of countries like Germany, Belgium and Denmark and documented in the various European Wind Energy Association studies.
Abaya said that savings from the WESM could offset or “pay for” the amount to be shouldered by consumers under the feed-in-tariff-allowance. NREB calculates the FIT-All to be around P0.10 per kilowatt-hour.
Despite the additional rate increase, Pete Maniego, NREB chairman, said RE is actually a cheaper power source since the fuel - wind, sun, water, geothermal - is free and abundant in the Philippines.
”The WESM benefits further bolster the already strong case for implementing RE now. The implementation of the provisions of the RE Act of 2008 has been delayed for several years,” he said.
Maniego said other Asian countries are investing heavily in RE, noting that green power sources already accounted for 50 percent of the new electric capacity in 2010 around the world.
”The number of countries with renewable energy targets and support policies in place increased to 119 in 2011 from only 55 in the previous year. Implementing RE now would lead to a sustainable development, cleaner environment, energy self-reliance and stable electricity prices in the Philippines,” Maniego said.
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