Government urged to tweak renewables policy

By Lenie Lectura November 30, 2020
https://businessmirror.com.ph/2020/11/30/government-urged-to-tweak-renewables-policy/

AC Energy Philippines Inc. concurred with the proposal of the National Renewable Energy Board (NREB) to adjust the minimum level of electricity contracted from renewable energy (RE) developers.

AC Energy President Eric Francia said that if necessary adjustments are to be made then the country could hit its target of sourcing 35 percent of power from renewables by 2030.

“At the current level of RPS [Renewable Portfolio Standard], which is at 1-percent annual increment, we will not get to the 35 percent share of RE output by 2030. We are currently at 21 percent. If we are serious to be at 35 percent, we agree with NREB that the one percent increment must go up to 2.5 percent by 2023 or 2024. That will be a forcing mechanism to purchase more RE output in the market,” said Francia.

RPS requires distribution utilities (DUs) to source 1 percent of their power supply from eligible RE sources such as biomass, waste-to-energy technology, wind energy, solar energy, run-of-river hydroelectric power systems, hydroelectric power systems, ocean energy, and geothermal energy.

The RPS level is currently set at 1 percent.

NREB Chairman Monalisa Dimalanta proposed to keep that level at 1 percent for 2020 to 2022 then increase it to 2.52 percent moving forward.

“But after 2022, we have to start increasing that level to what we have computed. If we increase it to 2.52 percent all the way to 2023 to 2040, it will take us to a 37.3-percent RE share by 2030 and by 2040 that share is actually going to be almost 56 percent of our supply mix,” she said earlier.

NREB’s proposal, however, has yet to reach the Department of Energy (DOE).

“[NREB] has yet to present to the DOE Secretary. It has to go through the RPS composite team as well,” Energy Assistant Secretary Redentor Delola said in a text message.

In 2019, the share of RE in the country’s generation mix stood at 20.8 percent from 23.38 percent in 2018. Coal continues to dominate the mix at 54.6 percent , followed by gas at 21.1 percent and oil at 3.5 percent.

The country’s RE goals have yet to be fully achieved after 10 years since Republic Act 9513 or the Renewable Energy Act was enacted.

Francia said the company’s RE future projects are in line with the RPS policy. He, however, is concerned about the delays related to the bidding process, which could also delay the commercial operation of the power facilities.

“My concern is that the delayed green field bidding process also delayed the building of the next scale power plants and that may put us at risk in the next three or four years. Right now, no one can tell how the rebound will look like. We might be surprised.

The advantage of RE is you can do it chunk by chunk, in a measured manner, and not always a billion-dollar decision. You can build them in phases. The power plants should be ready by 2023 because we believe by 2023 or 2024 incremental demand will come back. As such, my hope is that over time, government will increase [the RPS level],” said Francia.