NREB says coal prices to surpass RE tariff incentive

Manila Times.net
Published : Wednesday, October 19, 2011 00:00 Written by : EUAN PAULO C. AÑONUEVO


THE additional rates consumers would have to pay for renewable energy is minimal when compared with the projected increase in coal prices in the next few years, according to the National Renewable Energy Board (NREB).


“In all the hoopla against RE because of its alleged higher price against fossil fuel power plants, those opposing the feed-in-tariff consistently fail to mention that coal power rates are already much higher than those of hydro and biomass power,” said Pete Maniego, NREB chairman. The RE Act of 2008 mandates the establishment of the FIT, which shall guarantee returns to investors over a fixed period. The incentive aims to draw investments in green technology, which has long been hampered by high costs and limited markets.


The FIT, however, would become another line item in consumers’ electricity bills in a country that is said to have one of the highest power costs in Asia. Maniego said maintaining the country’s power generation mix—particularly the reliance on coal-fired power plants—would have a bigger impact on electricity rates in the future if RE projects fail to take off.


“Most experts project coal prices to increase at a higher rate than the historical 25 to 30 percent per annum, because of the expected new coal plants in Japan and most developing countries like the Philippines,” the NREB chair said.


Like the proposed FIT for RE, the fixed cost components of coal plants are subject to foreign currency exchange and inflation adjustments.


The Department of Energy has approved an installation target of 760 megawatts for RE generation that can qualify for FIT by 2014, and a proposed FIT-Allowance of about P0.11 per kilowatt-hour.


“The total savings from RE sources compared to coal plants over the 20 year FIT period would reach P810 billion,” Maniego said.