Coal versus renewable energy

business mirror

TUESDAY, 14 FEBRUARY 2012 21:11 LITO U. GAGNI / MARKET FILES

THERE is an interesting tug-of-war between the Foundation for Economic Freedom (FEF) and the proponents of renewable energy (RE) with compelling subtexts that could provide a glimpse of what the battle is all about. Hearings at the Energy Regulatory Commission (ERC) on renewable energy have already taken too long. But at the rate the hearings are going, the issue of the application of renewable energy—also called green energy because it does not harm the environment—is still a way from being resolved.

No less than President Aquino has been pushing for the adoption of green energy. But his efforts notwithstanding, the FEF has been using all sorts of strategies to delay the entry of RE into the country’s electricity grid, including the alleged failure of all concerned to agree on the amount of the feed-in tariff that the RE can charge. By the way, members of the FEF, according to its stationery, include former “energy czar” Delfin Lazaro of the Ayala group, former Fnance Secretary Ramon del Rosario of the Phinma group, former Arroyo Energy Secretary Popo Lotilla, former Presidential Spokesman Gary Olivar and former Presidential Adviser Gloria Tan Climaco.

Just by looking at the list, some people would immediately surmise that some of the players in the FEF have their own energy businesses. And get the impression that here probably lies the core of their opposition: the entry of renewable power sources could hurt their business interests.

But wait, it turns out that the big names on its list of advisers and trustees have nothing to do with the FEF’s position against renewable power. In other words, Lazaro and del Rosario, we are told, actually do not take part in the crafting of FEF positions on issues. So what’s the FEF’s game? A closer look would reveal that the name of the game is coal. And the presence of the big names is obviously meant to cloud the obvious.

.The clue is the presence of lawyer Ricardo Balatbat, FEF executive director, who is part of the DMCI group that owns and operates Semirara, the largest coal mine in the country. And former Finance Undersecretary Romeo Bernardo, who is also on the board of Aboitiz Power, another giant that is heavily investing in new coal-powered electricity-generation plants.

The FEF says its main argument against renewable power is that the proposed ERC scheme for its entry does not involve “public bidding.” Really? Now, here’s something interesting: all along, throughout these past many years, there has been no bidding by off-takers of coal-fueled power projects in this country. Ask the ERC.

Purchases of coal-fueled electricity contracts here have all been on a “bilateral” arrangement by utilities like Visayan Electric or Panay Electric. Coal producers, importers and suppliers have all benefited from that no-bidding arrangement. The FEF foists the no-public-bidding ploy to bolster its opposition to the renewable energy but in the same instance refuses to apply this same rule on the energy sale of coal-fired power plants.

It is high time the ERC approved the renewable-energy rates since the industry vowed to lock in the rates for the next 20 years. Meaning, no ups and downs on the cost of power from renewable-power sources for two decades. It will be pegged only to inflation, notwithstanding any threat of an Iran oil embargo or Syrian or Libyan unrest.

The same cannot be said of the coal- and diesel-fired power plants. The costs of running these plants are volatile and political. Their pricings are subject to “nervous” volatility and a lot of uncertainties. Would the FEF agree to pegging the rates of their coal-supplied power for the next 20 years? Just asking.

We are merely kibitzing here. But this whole quarrel between the FEF and renewable energy has really become interesting. If it has done the public any good, it would have been because the public now understands better the business interests that are at play here.

E-mail: hugagni@yahoo.com