FORT COLLINS – A few decades ago while I was still in school during the martial law regime, I was practically brainwashed about the values of “green revolution.” At that time, the “green revolution” was the buzzword of former First Lady Imelda Marcos’ pet project about planting fruits and vegetables as well as trees in vacant lots in schools and homes.
Fast forward. Now the “green revolution” has acquired a global paradigm that involves a campaign for “environment-friendly” technology, gadgets and activities. These were featured in the four-day Colorado Renewable Energy Conference being held here. The state of Colorado prides itself as “a world leader in the new green economy.”
In fact, more than 200 business firms all over Fort Collins, one of the cities in the state of Colorado, organized themselves into a society that actively advocates companies to turn “green,” converting their fossil fuel-run (bunker fuel or coal-fired plants) factories and offices into ones using renewable energy like solar and wind power.
One of the most attended sessions in the conference dealt with renewable energy developments in Asia, Europe and the United States. The Philippines, China and India were mentioned as among the countries in Asia with notable advances in the use of renewable energy, or RE for short.
China was particularly cited as leading the global race to make clean energy that started in its years of preparations for the 2008 Olympics in Beijing. China retired many of its toxic carbon emitting, coal-fired power plants and replaced them with solar and wind power plants. In Europe, Spain and Germany were cited as the best models of successful increased use of solar and wind power plants.
To date, 44 percent of electricity all over Germany is sourced from solar power. When we were in Germany last year, we saw houses in the countryside, and not just in the cities, that have solar-paneled roofs while windmills dotted the farmlands. The wide acceptance and use of RE sources were credited to the application of a pricing mechanism based on feed-in-tariff (FIT). The FIT makes consumers pay for the “green” source of electricity for their homes, offices and factories.
One of the speakers in the conference here, Piper Foster, a young American woman executive from the Pitkin County Energy Smart Campaign Strategist, undertook a year and a half of study on the growth and development of the RE industry in Germany. She presented a first-hand experience of FIT as applied in Germany.
Foster cited four important factors how FIT “worked well” for Germany, which is now reaping the benefits of creating not just new employment opportunities but also “green” jobs that sustained its economy amid the global financial crisis that hobbled other countries. First, she said, the utility pays for the cost of connection. Second, RE producers enter into long-term contracts so that they would not be subject to the whims of government policymakers.
Third, she said, there is a “fixed premium” to guarantee the RE producers a reasonable rate of return. And lastly, the cost of RE producers is covered by a “modest rate of increase.” Foster underscored that all these four factors come into play in the decision-making process of a “third party clearinghouse” that implements and mediates FIT rules and regulations.
Foster conceded that the initial cost of implementing FIT for RE projects is expensive. “Yes, there are upfront costs. But FIT is not a tax. It’s not a subsidy. FIT is paid for by consumers of electricity. So, it’s better to have a rate payer than a taxpayer pay for it,” Foster pointed out.
In the Philippines, the Department of Energy (DOE) reported recently that it has completed the National Renewable Energy Plan (NREP). This is supposed to spell out the government plans and programs to provide a more stable direction toward the development and more efficient use of RE sources, including our existing hydroelectric and geothermal power plants.
Specifically, the NREP contain targets for the RE industry, the vision, mission and timetables to implement the mechanisms and incentives of the RE Law. Also included in the plan are timetables for the RE market and RE registrar, the FIT, renewable portfolio standards, “green energy option” program, and net metering, among others.
The RE industry in the Philippines needs such directions to prevent gaps and lags in the implementation of the mandated mechanisms in accordance with the spirit and intent of the law. Under the RE Law, the FIT system should have been developed within six months after the signing of its implementing rules and regulations (IRR). The law was signed in November 2009.
The administration of President Benigno “Noynoy” Aquino III is turning a year old by the end of this month. But still no FIT has come out. The last time I checked, this has remained pending before the Energy Regulatory Commission (ERC).
While the ERC has yet to act on the FIT, Energy Undersecretary Josefina Asirit was quoted as saying last week that the DOE would soon sign new service contracts for several RE projects. She said the government expects a great number of these projects coming in over the next three years, especially with the expected issuance of the FIT and installation targets.
This is certainly a positive signal to local RE developers eager to start work on their respective power projects. In fact, First Gen Corp., the power generation arm of the Lopez group of companies, announced its plans to develop up to 200-megawatt wind power projects in the medium term.
First Gen will undertake the proposed wind power projects through its renewable energy subsidiary, First Gen Renewables Inc. (FGRI).
Francis Giles Puno, First Gen president, disclosed their company’s plans to invest about $2.5 million to $3 million per megawatt or about $600 million for the wind power projects. For this purpose, the FGRI has applied with the DOE service contracts for 14 wind sites. These are located in Mercedes, Camarines Norte; Burgos, Ilocos Norte; Palanan and Ilagan, Isabela; Pandan, Catanduanes; Culaba, Biliran; and Basud, Camarines Norte.
Hopefully, these investments in renewable energy projects would help spur the “green revolution” in the Philippines to bring not just clean but also stable and reasonable price of electricity in the long run.