Friday, September 07, 2018

BWorld 245, Renewables illusion and coal realism

* This is my column in BusinessWorld last August 29, 2018.

THE “renewables cheaper than coal, fossil fuels” urban legend continues until today. For instance, three articles published in BusinessWorld recently:

1. Reducing power plant carbon emissions by 70% is doable (Aug. 20) by Roberto Verzola.

2. Rooftop solar could help reduce diesel, coal imports — report (Aug. 21).

3. Low-carbon path (Aug. 27) by Roberto Verzola.

Among the arguments of these and other papers are the following:

1. “Rooftop solar costs P2.50 per kWh without financing expenses, P5.3 per kWh with financing expenses. Utility-scale solar power can cost as little as P2.99 per kWh” (Institute for Energy Economics and Financial Analytics (IEEFA).

2. “Low carbon scenario of 64,280 GWh by 2022, 54.602 GWh by 2030” (Verzola).

3. “Low-carbon scenario limits at most 64,280 GWh (54%) of fossil-based generation by 2022, balance of 53,720 GWh (46%) must be covered by RE (Verzola).

A lot if not all of these numbers and projections are products of delusion and irrationality.

On #1, if solar cost is indeed declining, then why don’t the solar lobbyists and developers simply abandon the high feed-in-tariff (FIT) or guaranteed high price for 20 years, now P10+/kWh? Why not call for drastic reduction of FIT to P4-P5/kWh, even abolish FIT altogether?

On #2, as the Philippines relies more on coal — 38.8% of 72.92 tera-watt hours (TWH) of electricity generation in 2012, up to 49.6% of 94.37 TWH of generation in 2017 — our electricity prices decline. See Meralco rates for instance, weighted average for all customers (residential, commercial, industrial). The rates exclude VAT but include all other non-recoverable taxes and charges.
(in US$ cents per kWh)

In addition, we already have 94.37 TWH of power generation in 2017 (75% of which are from fossil fuels coal, natural gas, oil), some guys want us to use just 2/3 of that by 2022, very backward thinking.

On #3, moving away from coal and fossil fuels and embracing renewables like wind/solar has been the goal of many developed countries for the past two decades or more. And yet by 2017, many of them still rely 30% or higher on coal while their RE generation (wind, solar, biomass, geothermal) remains small.

The solar lobbyists also silently demand to cut and murder all tall trees near houses with solar roof and all utility solar farms. Solar hates shades — from clouds, rains and tall trees. It is anti-green.

The bottom line of more renewables cronyism via continued expensive subsidies, mandatory dispatch and related provisions is that whether we have less rain, no rain or more rains; less flood, no flood or more floods, less storms or more storms, we should endure expensive and unstable electricity. We should send more money to the UN, Al Gore, CCC, WWF and Greenpeace, get more climate loans from the WB and ADB. Lousy.

Bienvenido S. Oplas, Jr. is president of Minimal Government Thinkers and a fellow of Stratbase — ADRi.

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