Hope for lower electricity costs

Business Mirror
TUESDAY, 27 SEPTEMBER 2011 21:04 LITO U. GAGNI / MARKET FILES


WITH the on-off electric power in Metro Manila and suburbs resulting from the havoc wreaked by Typhoon Pedring, consumers must expect an increase in their electricity consumption owing to intermittent power surges. The high electricity rates, which have long reduced the country’s marketability, are due to an aberration called the spot market or the Wholesale Electricity Spot Market (WESM). Under this system, the generation charges that are levied on consumers are computed based on the spot market arising from peak demand.


But relief may be in sight. These high electricity rates may soon be drastically cut if the country adopts, as President Aquino plans, a renewable-energy (RE) mix that is half of the total energy capacity in the country. By marshalling RE into the energy grid, electricity consumers can expect lower expenses because in the computation under this system, the RE costs are the first that are considered in the spot-market computation before those of the bunker-fuel and coal-fired power plants.


The use of renewable energy in the power system has long been benefiting developed economies such as Germany and other European nations.


No less than the National Renewable Energy Board (NREB) has come up with the following findings: With RE, the more expensive fuel-fired power plants are relegated into the background, resulting in lower electricity costs.


In the Philippines the introduction of renewable energy into the mix of electricity power sources will be done through the so-called feed-in-tariff method or FIT. The NREB study showed that “the entry of 200 megawatts of new renewable- energy generation could generate savings of as much as P3 per kilowatt-hour, or roughly P1.2 billion, in a month.”


The same study also said: “In effect, what the entry of renewable-energy facilities—which will be designated as must-run units—can do is to displace the more expensive power being traded at the WESM. The timely inclusion of renewable-energy generation will thus force power-generation companies to ‘moderate’ their WESM price bids, allowing renewable-energy capacity to act as price stabilizers,” the study said.


The President’s vision for RE accounting for 50 percent of the energy grid by 2030, in effect addresses the concerns of consumers. And yet, it appears that two of the President’s Cabinet members—Energy Secretary Rene Almendras and Trade Secretary Gregory Domingo—do not seem enthusiastic about RE. In a recent television talk show, their reaction to the idea of using RE ranged from lukewarm and ambivalent.


Considering what the NREB study showed, one wonders why nobody in the Cabinet seems willing to endorse or promote the President’s pro-renewable energy stance. There is talk that the absence of a staunch defender of the RE policy—and the announced views of Almendras and Domingo—may have emboldened those opposed to the President’s vision to press for continuing reliance on traditional sources of energy.


At any rate, we join those who continue to hope that the lack of enthusiasm, if we may call it that, on the part of some members of the official family, is just part of a healthy exchange of views now going on quietly in the Cabinet about RE. And we continue to hope that the President will remain firm and steadfast in his vision about renewable energy.


E-mail: hugagni@yahoo.com