From an introductory price hike of 4.06 centavos/kWh of
Feed In Tariff Allowance (FiT-All) in 2014, this subsidy scheme of guaranteed
price for 20 years became 12.40 centavos/kWh in 2016. As more renewable energy
power plants are added to the country, the cost of FiT-All will keep rising and
it is safe to assume that this FiT-All might further rise to 20 centavos or
more by 2017. And even consumers in Mindanao who are not participants of the
Wholesale Electricity Spot Market (WESM) are paying for this.
Such is the abuse received by consumers nationwide via
expensive electricity from subsidies to renewable energy (RE) companies. Last
month, I wrote to the National Transmission Corporation (TransCo), a government
corporation in charge of administering the FiT-All, and asked who among the RE
developers received how much.
TransCo sent me a statement of cash flow, Receipts minus
Disbursements = Fund Balance, and Fund Payable as of end-2015. I thanked them
for the reply but that was not the information that I needed, so I called up
the officer and asked why the list of who received how much was not sent. She
said that they cannot release it to the public, implying confidentiality of the
information. I wish that President Duterte will release that new Executive
Order on Freedom of Information (FoI) very soon. The Department of Budget and
Management (DBM) releases yearly data on how much government agencies received
from taxpayers so why can’t TransCo release data on how much RE developers
received from electricity consumers nationwide?
Last month, the Department of Energy (DoE) posted on its
Web site the “List of Renewable Energy (RE) Plants with Certificate of
Endorsement (CoE) to Energy Regulatory Commission (ERC) for Feed-in Tariff
(FiT) Eligibility” as of June 20, 2016. My first question as to which RE
companies received FiT has been answered. There are some RE developers who did
not receive FiT.
By virtue of their enormity (MW capacity) compared to
other RE developers, these companies are the potential main beneficiaries of
expensive electricity policy provided by the RE Act of 2008 (RA 9513):
1. Burgos Wind Power Project (Phases 1 and 2) by
EDC/Lopez group, 150 MW at P8.53/kWh
2. Caparispisan Wind Power Project by North Luzon RE
Corp./Ayala group, 81 MW at P8.53/kWh
3. San Lorenzo Wind Power Project by Trans-Asia RE
Corp./PHINMA group, 54 MW at P7.40/kWh
4. Pililla Wind Power Project by Alternergy Wind One
Corp./Vince Perez, 54 MW at P7.40/kWh
5. Nabas Wind Power Project by PetroWind Energy, Inc., 36
MW at P7.40/kWh
6. Bangui Bay Wind Power Project Phase 3 by Northwind
Power Development Corp./partly Ayala, 19 MW at P8.53/kWh
7. Cavite EcoZone Solar Power Project by Majestics Energy
Corp., 41.3 MW at P9.68/kWh.
I only need to find out the answer to my second question:
how much did other RE companies receive each? I went to the Energy Regulatory
Commission (ERC) Web site and saw ERC Case No. 2015-216RC, the TransCo petition
for FiT-All for 2016. The important factors and ingredients were there, so I
began making my own estimates.
The FiT rates and installed capacity in MW for all RE
developers already given by the DOE, I used the following factors and
assumptions to construct a table of estimates.
a. Capacity factor -- derived using TransCo filings with
ERC which are per technology basis.
b. Generation (MWh) -- derived from the capacity factor.
c. FiT Revenue -- FiT rate multiplied by the generation.
d. FiT Cost Recovery Revenue (FCRR) -- the amount that
the RE firm got from WESM or the distribution utility (DU). This is derived
using the average WESM rate per TransCo application to ERC. This amount may not
be that accurate since the time of dispatch will not result to the average
price.
e. FiT Differential (the basis of FiT-All) = FiT Revenue
minus FCRR. For some power sources like wind plants, the calculated FiT
Differential here may be under estimated since wind usually blows during
off-peak hours period, and WESM prices are then below the average rate (see table).
Now these are just estimates and there could be some
corrections or mistakes in the last four columns on the right, even in the
capacity factor. The capacity factor is not constant or flat the whole year,
some months and days are more windy than others, and some months and days are
more cloudy than others and hence, affect the output of solar PV.
I wish to be corrected by TransCo if those numbers are
wrong, perhaps they should release the correct numbers. Is it true that the Lopez
and Ayala groups cornered nearly P5 billion from FiT in 2015 alone? The other
companies like Trans-Asia/PHINMA, Alternergy, Hedcor/Aboitiz, they also enjoyed
perks by several hundred millions of pesos each because of the unjust system of
high, guaranteed price system under FiT.
On a related note, it is good that Mindanao does not have
any of those expensive and pampered solar and wind plants that are primarily
responsible for more expensive electricity in the country. Mindanao has more
hydro, big hydro with no FiT and run of river hydro with small FiT of
P5.90/kWh. Recently, Mindanao added more coal plants, which is the right thing
to do. Stable, dispatchable, non-intermittent and cheaper coal power, that is
what Mindanao and the rest of the country should have if we are to sustain fast
growth. The move by the new DENR Secretary for anti-mining policy will
adversely affect coal mining and coal power development in the country. This
policy move should be checked and discontinued.
Bienvenido S. Oplas, Jr. is a Fellow of SEANET and
Stratbase-ADRi, and head of Minimal Government Thinkers.
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See also:
BWorld 43, More on WESM, PEMC and DOE, February 14, 2016
BWorld 47, Renewable energy and the illusion of merit order effect, March 06, 2016
BWorld 51, WESM as market-oriented, PEMC as bureaucracy-oriented, March 25, 2016
BWorld 47, Renewable energy and the illusion of merit order effect, March 06, 2016
BWorld 51, WESM as market-oriented, PEMC as bureaucracy-oriented, March 25, 2016
BWorld 55, FIT-All, renewables and elections 2016, April 23, 2016
BWorld 58, INDCs and PH energy realities, May 14, 2016
BWorld 68, Criminal justice and Duterte, July 07, 2016
BWorld 69, Foreign direct investments and Pres. Duterte, July 08, 2016
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