Solar power faces looming war vs power sector

By Michael Makabenta Alunan - October 3, 2018
https://businessmirror.com.ph/solar-power-faces-looming-war-vs-power-sector/

Solar power is increasingly getting cheaper in the country, thanks to a young entrepreneur, 25-year-old Leandro Leviste, who helped lower solar energy costs to P2.99 per kilowatt- hour (kWh) without batteries, thus raising fears of an imminent encroaching market war with traditional fossil-fuel-dependent power industry, including huge power plants and provincial and island electric cooperatives.


Sunrise vs sunset
The past decades, we have witnessed the demise of obsolete technologies thrown into oblivion with the influx of innovative, efficient but disrupting technologies. Typewriters gave way to computers, and postal-mail and telegrams to beepers, and analog phones to smart phones.

As computer hardware gets powerful, thanks partly to multibillionaire Filipino innovator Diosdado “Dado” Banatao, who’s behind the powerful chip that powers computers, smartphones, credit cards and all forms of electronic appliances and gadgetry, software has also become more sophisticated, ushering in sunrise industries involving “artificial intelligence ” and the “Internet of Things.”

Similarly, cheapening solar technology can potentially edge out traditional power systems, which are getting costlier and inefficient being dependent on imported fossil fuel and on interlocking massive capital-intensive power generation, transmissions and distribution systems.


Solar mini-grid vs power greed?
In contrast, solar power can be stand-alone systems that can be installed on rooftops, light posts or as mini-grids serving small communities too remote and costly to be served by transmission and distribution lines.

Power generators have massively shifted to coal, claiming it is cheaper although more pollutive, but has not translated into cheaper energy. The Philippines has the most expensive power rates in Asia at P12-P16/kWh as players serve a power grid, which sounds more like greed.

Leviste’s Solar Power Para sa Bayan primer revealed that the biggest power companies profited over P100 billion in 2017, and over P1 trillion since the Electric Power Industry Reform Act’s passage. And because Filipinos spend 10 percent of monthly salaries on electricity, Pulse Asia’s survey shows 60 percent of Filipinos are dissatisfied with electricity prices; 82 percent favor new power providers, and 89 percent favor renewable energy.


Proof of track record
This makes Leviste’s mini-grids relevant, timely and faster to install in less than six months, or a fraction of the years to build power plants and transmission lines, thus making it easier to achieve government’s goal of 100 percent electrification by 2022 that is affordable, clean and reliable 24/7.

Leviste founded Solar Philippines in 2013 when he was still a 21-year-old sophomore at Yale University, but has made massive inroads with no government support. From 4 megawatts in 2013, solar energy in the Philippines shot up to 900 MW by mid-2016, and will soar further with Leviste’s first Filipino solar panel factory that opened in 2017, creating 1,000 manufacturing jobs. By March 2018, he completed Southeast Asia’s largest Solar Mini-grid in Paluan, Mindoro.

Leviste tied up with Manila Electric Co. to supply 85 MW power at P2.99/kWh, the cheapest—even lower than coal at P4/kWh, gas at P6 and diesel at P8.

About 12 towns in Mindoro, Palawan, Masbate, Cagayan and Aurora are now getting cheap 24/7 electricity at zero cost to the government. Paluan, Occidental Mindoro, enjoys low rates at P8/kWh, about half of what other regions are paying. Aurora and Cagayan were among the worst affected by Typhoon Ompong, but power was restored immediately when the sun started shining.

Leviste gained numerous recognitions, including one from Forbes in 2016 for topping the list of “Under 30” young entrepreneurs in energy and industry.


Hemorrhaging for power?
Leviste’s solar power enjoys no subsidies, while the National Electrification Administration is asking another P25 billion for its rural electrification, while the National Power Corp. slaps its Universal Charge for Missionary Electrification of P0.1561/kWh, generating subsidies of P20 billion per year. The Department of Energy also has a subsidized Qualified Third Party program.

Feed-in-tariff (FiT) subsidies for renewables are at P0.2563/kWh, or nearly P30 billion a year, which consumers shoulder, thus raising power costs to P8-P9/kWh, triple Leviste’s contract price with Meralco at P2.99/kWh. Leviste has not availed himself of FiT to prove solar is viable.

Many electric cooperatives have also accumulated massive debts like Lanao Sur Electric Cooperative’s (Lasureco) P10-billion debts, which the government absorbed.


Urgent legislative support
Threatened interests are blocking Leviste’s inroads, insisting they enjoy exclusive franchises, thus the need for House Bill (HB) 8179 authored by Deputy Speaker Arthur Yap of Bohol, Rep. Maria Carmen Zamora of Compostela Valley, Rep. Franz Alvarez of Palawan and 33 other coauthors with over 70 more supporting.

HB 8179 argues existing franchises of power distributors and and electric cooperatives are not exclusive, and that Solar Para sa Bayan can still apply for a franchise anywhere. Yap said a 2005 Supreme Court ruling affirmed that “exclusive franchises on public utilities…are unconstitutional.” The bill reinforces this and the Constitution’s Article XII, Section 11, which states, “No franchise… for the operation of a public utility shall be…exclusive.”


If you can’t fight change, embrace it

Leviste declares, “Our aim is not to make the most profit, but to help the greatest number” as 12 million Filipinos still lack access to electricity, and 20 million lack 24/7 electricity. For 2018 he aims to bring power to 500,000 Filipinos in Mindoro, Palawan, Masbate Batangas, Quezon, Aurora, Cagayan, Isabela, Panay, Negros, Misamis and Davao, at no cost to the government.