Firms to government: Exclude solar, wind from electricity tariffs

BUSINESS MIRROR
SUNDAY, 11 SEPTEMBER 2011 20:47 MAX V. DE LEON / REPORTER


DOMESTIC manufacturers asked the government to exclude solar- and wind-energy projects from the feed-in tariffs (FIT) program owing to concerns on high cost and availability.


This is contained in the manifestation sent by the Federation of Philippine Industries (FPI) to the Energy Regulatory Commission (ERC).


The agency is now gathering comments for the pending ERC Case 2011-0006-RM, or rule-making for the adoption of FIT for electricity generated from biomass, ocean, hydropower, solar- and wind-energy resources.


FPI said it supports the setting up of FIT rules for other types of renewable energy, including biomass, but not for solar and wind energy.


The group said it opposed the inclusion of wind and solar energy projects, “particularly considering that technologies for these types of renewable energy are presently expensive.”


“FIT rates especially for wind and solar are so high that these will result in significant increases in the power rates which are already globally uncompetitive,” the group said.


Also, it said wind and solar power are not available 24 hours a day and will need ancillary generation to provide the corresponding backup support, which will further increase the actual costs charged to the consumers. Thus, the federation is requesting to hold in abeyance the giving of FIT to solar and wind energy.


The ERC has set the next hearing on the issue on September 20.


Sen. Edgardo Angara reiterated his call to the administration to invest in developing and promoting renewable-energy (RE) systems in the country in light of new fuel price hikes.


Angara, chairman of the Senate Committee on Science and Technology, made the statement amid calls to repeal the Oil Deregulation Act.


“Putting caps on increases during emergency situations or lifting the VAT [value-added tax] on oil may only momentarily bring down the price of fuel. But costs will inevitably rise given that worldwide supply is dwindling fast. The real issue that needs to be addressed is our persistent dependence on foreign-sourced fossil fuels for our energy needs,” said the veteran lawmaker.


Angara was the lead author of Republic Act (RA) 9513, the Renewable Energy Act of 2008, which promotes the establishment of an RE industry in the Philippines. With Comste, Angara has been pushing for the establishment of the Renewable Energy Research and Development Institute as a public-private partnership in developing RE technologies.


Earlier this year, the International Energy Agency (IEA) predicted that oil prices, would rise by 30 percent within the next three years. IEA economist Fatih Birol said that the world’s crude oil production peaked in 2006.


The economist said that, “The existing fields are declining so sharply that in order to stay where we are in terms of production levels in the next 25 years, we have to find and develop four new Saudi Arabias.”


Angara noted that according to the World Energy Outlook 2010 of the IEA, world electricity demand is expected to grow more strongly than any other form of final energy, at around 2.2 percent a year between 2008 and 2035. Eighty percent of this increase is said to come from non-OECD countries like the Philippines.