300-kWh users facing RE impact

Manila Bulletin 
By Myrna M. Velasco 
Published: June 18, 2013 
Majority of residential end-users within the 300-kilowatt hour (kWh) bracket of consumption will experience P5.40 monthly as impact on their electric bills with the targeted installation of 750 megawatts of renewable energy (RE) sources in the mix.
This has been based on the desk study outcome of German cooperation agency Deutsche Gessellschaft für Internationale Zusammenarbeit (GIZ) GmbH, which has assessed the cost impact of feed-in-tariff allowance (FIT-All) once implemented in 2016.
On a per kilowatt-hour basis, the impact will be P0.02, which is even lower than the earlier calculated FIT-All rate of P0.05 per kWh.
“A household consuming 300 kWh monthly would only need to pay an additional P5.40 per month,” the GIZ study has stated.
The German cooperation agency added that “if the planned FIT regime for 750MW of RE becomes effective, it will add only P0.02 per kWh to the electricity bill.” This has already been based on the average cost impact across all RE technologies, including wind, solar, biomass and run-of-river hydro.
For the Philippines, GIZ similarly emphasized that RE prices will be highly-competitive in island mode areas or those not directly connected to the grid.
“Average island electricity prices are higher than for mainland grids. This makes RE competitive for mini-grids,” it said.
The study established that about 30-percent of all households are not connected to the grid, adding that “for these unviable areas, renewables are cost competitive alternative to costly diesel generators.”
Given the subsidized rates in off-grid areas, “the difference between true costs of diesel generation and actual electricity selling rates needs to be bridged by a universal charge for missionary electrification (UCME) paid by every electricity consumer,” the study said.
It was further explained that “the UCME leads to estimated costs of P7.68 billion in 2013 or 11.85 centavos per kWh.”
The GIZ expounded that “true diesel power generation costs in off-grid areas are between 13 and 20 centavos, and can even reach 28 centavos in some areas.”
The UCME is being passed on to electricity consumers and collected by state-run National Power Corporation (NPC) and remitted to its successor-firm Power Sector Assets and Liabilities Management Corporation. After which, the collected amounts will be utilized to subsidize the rates in off-grid areas.   source