By: Riza T. Olchondra 12:12 AM June 10th, 2016
The solar power industry has built
up enough capacity to compete with conventional energy sources, including coal,
experts said.
Solar Philippines Power Project
Holdings Inc. (Solar PH) CEO Leandro L. Leviste said that even if utilities
(such as Manila Electric Co. and electricity cooperatives) in areas with solar
farms would conduct competitive bidding now, solar power would be competitive
even against coal, perceived to be the cheapest energy resource provider.
Asked how solar power could compete
under the Competitive Selection Process (CSP) being mandated by the government
starting this year, Leviste said, “Solar power is competitive… I challenge the
energy industry to bid out supply contracts and we can show that solar power
can be supplied at around P4 per kilowatt-hour (kWh), or about the same level
as coal,” Leviste said.
“The conventional wisdom is that solar is
expensive and it will take decades more to be competitive. Yet last month, the
world’s lowest prices for solar was set in a bidding in Dubai at P1.345 (peso
equivalent) per kWh. Other bids were P1.575 per kWh in Mexico and P1.741 per
kWh in the US,” Leviste said.
“These are the result of a
90-percent decrease in panel costs over the past decade, low interest rates and
high levels of sunlight—making solar in those places significantly cheaper than
fossil fuel in the Philippines, where coal averages at P4 per kWh, natural gas
at P6 per kWh and diesel at P8 per kWh.
Yet those economies have even less
sunlight than the Philippines, Leviste said.
Citing a study by Deutsche Bank,
Leviste said the Philippines was seen globally as one of the most promising
markets for solar power projects.
The local solar market has gained
economies of scale, Leviste said. The Philippines had a total 4 megawatts (MW)
of solar power in 2013, but installed capacity was estimated to have reached
900 MW by mid-2016. He said there was enough scale that his company could offer
its solar-rooftop client SM Malls a fixed rate of power supply that is 30
percent cheaper than the commercial rate of Meralco.
Solar PH client SM City North has
one of the world’s largest mall rooftop solar power installations with a
capacity of 1.5MW (inaugurated in 2014). The installation is listed in the
Philippines’ Wholesale Electricity Spot Market.
The power sector has already taken
big steps toward more competition, particularly with the implementation of the
CSP, according to the Energy Regulatory Commission (ERC).
The CSP requires all distribution
utilities to conduct an open and competitive process in selecting the power
generating company from whom they are to purchase their supply for the captive
markets.
US solar power advocate Danny
Kennedy, who has several businesses and is part of several non-profit organizations
promoting solar power, said the technology could even become a source of
baseload (24/7) source of energy, addressing concerns on grid instability,
through the use of batteries to store excess solar power production.
Many countries around the world,
Kennedy said, were becoming more focused on solar power production and weaning
themselves away from coal.
Solar PH has a 63.3-MW solar farm
project in Calatagan, Batangas province. The company is continuing to work on
other solar farm projects and rooftop-installed projects, Leviste said.
Earlier, Energy Secretary Zenaida Y.
Monsada said projects with a combined capacity of 292 MW qualified for DOE
endorsement for FIT incentives.
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