April 15, 2018 | 8:19 pm By Bienvenido S. Oplas, Jr.
This quote should be
remembered by people who keep on insisting the urban legend that we can banish
coal power in our lives soon, that wind, solar, and other intermittent
renewables can provide 100% of our electricity needs. That is far out.
Despite the Renewable
Energy (RE) law of 2008, despite the generous subsidy to RE companies via
feed-in-tariff (FiT) — which provides subsidies for REs for 20 years — wind and
solar can provide only 2% of the country’s energy needs as of 2017. Coal, for
its part, provided one-half of our total national electricity needs
These numbers show that
as of 2017, (a) coal installed capacity was only 36% of total but its actual
power generation was almost 50% of total; (b) oil-based plants constituted 17%
of installed capacity but generated only 4% of total because these oil plants
are used mainly as peaking plants or they run only during peak demand hours to
prevent blackouts.
Among renewables,
geothermal and hydro provide the bulk of power generation. Solar-wind have
nearly 6% of installed capacity but contributed only 2% of power generation.
And this brings us to
four recent energy reports in BusinessWorld last week.
1. PHL announces
large-scale renewable projects (April 12).
2. DoE studying shift
in energy mix to 50% baseload (April 11).
3. DoE may step in as
licensing body for retail power suppliers (April 12).
4. Boracay closure to
raise Aklan power rates, legislators say (April 12).
Report #1 is about the
Board of Investments (BoI)-approved eight solar projects worth P86B ($1.7B) to
be rolled out from October. The largest is the Iba-Palauig 2 Solar Project, 140
MW worth P19B. Second largest are two projects in Cavite, 392 MW valued at
P17.3B. That is a lot of money that asserts that solar can be a reliable source
for the Philippines.
Report #2 is about the
DoE studying a change in its previous energy mix policy of 70-20-10 for
baseload (power plants running 24/7), mid-merit, and peaking plants
respectively, to a new policy of 50-40-10 for baseload, flexible, and peaking
plants respectively.
DoE projects that from
2018-2025, a total of 8,618 MW new capacity will be added to the country’s
power grid, 6,325 MW of which will come from coal plants.
Report #3 is about the
DoE studying the legality of being the issuer of licenses for retail
electricity suppliers (RES), a function by the Energy Regulatory Commission
(ERC) governing the implementation of retail competition and open access
(RCOA).
RCOA is among the
beautiful provisions of the EPIRA law of 2001 because it allows electricity
consumers the option to choose their own power suppliers. But RCOA was issued
an indefinite temporary restraining order (TRO) by the Supreme Court on Feb.
21, 2017.
Consumers can set their
own conditions from their RES. Thus, some consumers can demand that they be
supplied 100% only from renewables even if the price is higher. The Green
Energy Option (GEO) of RE law of 2008 encourages this. Meanwhile, some
consumers can demand that they be supplied 100% only from cheap and stable
sources.
Report #4 is about
Aklan Electric Cooperative (AKELCO) seeking to recoup losses of about P17-M a
month associated with the closure of Boracay for six months. It has a power
purchase agreement (PPA) with four power generators for 42 MW and they are
required to pay for them whether the power is used or not. So AKELCO will
increase its rates by P1.62/kWh to the rest of Aklan electricity consumers.
Report #1 does not heed
the advice of Alessandro Volta and actual data on Philippines power generation
and hence, run the risk of bad investments in the future.
Report #2 and new
policy will convert some of those new coal plants to become mid-merit instead
of baseload. This policy reversal might sour future investments in reliable
coal power.
Report #3 is positive,
affirming consumers’ rights to choose their own energy mix. The DoE should
ultimately shy away from announcing its preferred energy mix.
Report #4 shows that
the arbitrary closure of Boracay is bad not only for businesses in the island
but also for businesses and households in the entire Aklan province.
Government, both
Malacañang and DoE, should learn more to respect consumer freedom.
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