* My article in BusinessWorld on July 16, 2019.
Among the promises of the Solar Para sa Bayan Corp.
(SPBC) franchise bill now awaiting President Rodrigo Duterte’s signature are
24/7 electricity in far away villages, and cheaper electricity because the
sun’s rays are free.
True, the sun’s rays are free, but the solar panels, the
power conditioning unit, main panel, AC and DC disconnect, other components are
not free. Transportation and installation in far away areas and connection to
the grid are not.
Add to that the cost of a battery to extend the power for
few hours at night, plus the cost of backup diesel gensets since solar does not
generate power at night and hardly produces power on days with thick clouds and
rain. Solar components plus battery plus gensets cannot be cheap and power
stability is not assured.
In a site inspection by the Philippine and Rural Electric
Cooperatives Association Inc. of some barangays in Occidental Mindoro served by
SPBC in November 2018, they found that residents experienced an average of two-
to three-hour brownouts plus frequent on-and-off power outages every day,
resulting in damaged appliances, and that the rate charged started at a low
P2.34/kilowatt hour (kWh) which later rose to around P11/kWh.
Instead of favoring one particular energy firm, we need
more big conventional power plants. Compared to more stable economies in Asia,
the Philippines has among the lowest installed power capacity and, by
extension, among the lowest electricity generation. Our capacity in 2016 was
just one-half of that in Thailand, Vietnam, and Taiwan (see table).
People who want “green energy” and do not want to use
electricity from fossil fuels without putting up a rooftop solar system (and
cut or murder nearby tall trees that provide shade and reduce solar output) can
actually get their wish via the retail competition and open access (RCOA)
provision of the EPIRA (Electric Power Industry Reform Act) of 2001 (RA 9136).
Contestable customers can choose their own licensed retail electricity
suppliers (RES) and specify that they should be provided only renewable energy
like hydro, geothermal, biomass, solar, or wind. The price might be higher but
they get what they want. This will also send a signal to power investors to
develop more renewables because customers are willing to pay the higher price
without the need for subsidies from all electricity consumers nationwide,
without need for new legislation.
We need more market competition in power generation and
retail supply. We need more big power plants, conventional and renewables, more
gencos and let them compete for customers.
We should not have enacted a law that gives a guaranteed
price for renewables for 20 years via feed in tariff (FIT) as this violates
market competition and disempowers consumers — they cannot say “No” to
additional charges like the FIT-Allowance slapped into their monthly
electricity bill for 20 or 25 years.
The law is there — RE Act of 2008 (RA 9513) — and it
resulted in the upward price distortion in energy prices.
We should not add more energy distortions by having that
“Solar para sa Politika” franchise bill become a law. President Duterte should
veto it.
Finally, the Supreme Court should lift its TRO on the
Energy Regulatory Commission resolutions on RCOA’s implementation. The threshold
for contestable customers should have been down to 500 kilowatts or lower by
now. The number of competing RES should be plentier by now. And the choices of
consumers for their power generators and suppliers should be many, not few and
restricted.
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See also:
BWorld 346, Solar para sa politika, Part 2, July 06, 2019
BWorld 347, Inflation and TNVS costs, July 11, 2019
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