The real score
(The Philippine Star) - January 15, 2017 - 12:04am

The issue of whether or not to promote renewable energy in this country has always been a touchy one.

To accelerate the development of emerging renewable energy resources, Republic Act 9513 or the Renewable Energy Act of 2008 provided for a feed-in tariff (FIT) system for electricity produced from wind, solar, ocean, run-of-river hydropower, and biomass to serve as an incentive to producers.

Unfortunately, these incentives given to producers of renewable energy come in the form of a fixed tariff given to producers and these FIT payments are recovered from end-consumers via the FIT charge that appears in our electricity bills.

The incentives are granted on a first-come-first served basis. Among the incentives enjoyed are priority dispatch in the Wholesale Electricity Spot Market (WESM) and a fixed rate of P8.69 per kwh.

Once the installation target is met, no new FITs will be given for that period. Plants outside the FIT scheme have to sell their output at market prices.

During the first contracting round of FIT, the DOE increased the installation target allocation of solar energy from 50 megawatts in 2013 to 108 MW in 2014 in recognition of the investments and contribution of solar companies in the energy mix.

For the second contracting round whose deadline ended in March 15, 2016, the quota for FIT eligibility for the solar power sector is 400 megawatts.

The way the FIT system works, these power plants have to build first before they can apply for incentives. And so ever since the FIT system was implemented, about 798.2 MW of solar capacity was built, of which 100 MW were given incentives under the first round. With 400 MW eligible under the second round, this left around 298 MW “stranded” and without incentives.

What the solar industry wants is for the entire 798.2 MW of installed solar capacity to be entitled to FIT, which includes the 250 MW excess capacity.


But Energy Secretary Alfonso Cusi does not agree with this idea of making the consumers pay to promote renewable energy sources.

Just like President Duterte who believes that developing countries like the Philippines cannot afford these higher priced energy sources, Cusi said that it is unfair that electricity consumers should be subsidizing the cost of producing renewable energy through the FIT scheme.

When asked whether there will be another FIT round or whether the government would consider the solar industry’s proposal to include the excess solar capacity in the second or third round since it would be  unfair for the private sector that spent so much to build these plants  Cusi answered in the negative, since this would mean additional expenses on the part of the public.

Cusi said he would rather that non-governmental organizations or even public agencies that are pushing for renewable energy production to slowdown climate change give grants to producers of these energy sources.

And so those who are hoping that the Duterte government will support a change in the energy mix in favor of renewable energy sources should give up hoping.


But then, there are those who believe that some producers of renewable energy and their supporters are resorting to dirty tricks to destroy the image of our traditional energy sources in order to promote their own.

Just recently, there were news report about supposedly ailing residents living near a 150-megawatt coal-fired power plant operating inside the Petron Bataan Refinery in Limay, Bataan allegedly suffering from health problems as a result of coal fly ash or ash particles that float in the air or that might have made its way to a waterway.

A number of illegal settlers near the refinery have said that they suffered from skin rashes as a result of the coal ash from the power plant.

As a result, the Environment Management Board reportedly issued a notice of violation while the Department of Environment and Natural Resources (DENR), headed by Gina Lopez, threatened the company with a cease-and-desist order.

But it seems that Lopez, who is against coal-fired power plants and the mining industry, has been informed.

San Miguel Corp. (SMC) president Ramon Ang has been quoted in one newspaper as saying that no less than the DENR has certified that the ash was inert or benign.

Despite this, Ang said it has been recommended that Petron construct a retaining wall to ensure that the ash in the Petro Limay terminal area does not reach the Alangan River. He added that as a preventive measure, they have put up earthen dikes even as they are planning to construct a permanent retaining wall to make the community feel safe.

Ang, who celebrated his birthday yesterday, has been personally assuring Limay residents and the public that there is no coal spill, because no coal is being used in the facility (it is currently being test-run using diesel fuel but it won’t be fully operational until next year); that the residue found in the homes of illegal settlers along the perimeter walls are a combination of regular dust and limestone powder, a byproduct of oil refining certified by the DENR as non-toxic; that the limestone powder is stored in a specifically-constructed ash pond with dikes, far away from the river said to be affected by the ash; that the powder is there because the local government, for some reason, would not issue a permit to Petron to transport it to its cement manufacturing facility where it will be used as raw material; and that the power is not “dumped” but is instead sold at $100 per ton to a sister company that uses it to process cement.

SMC’s top executive has also emphasized the fact that local health officials have already said that the supposed skin rashes informal settlers have complained about are actually scabies brought about by contact with infected animals.

Ang has also briefed Lopez on the matter, and after hearing the facts, she immediately issued a permit for Petron to transfer the limestone ash to its proper storage facility and decided not to issue a CDO.

Petron is not a bad neighbor as some would like the public to believe. It has been one of Bataan’s biggest source of employment, livelihood, and scholarships. The company also recently opened a new, fully-equipped and staffed hospital that provides free medical care to Bataan residents.

And as publicly listed corporations and among the country’s respected companies, Petron and parent San Miguel would not be that irresponsible to not pay attention to a matter as important as taking care of its neighbors.

 As for Secretary Lopez, she should be very careful about her future pronouncements in connection with producers of traditional energy sources lest she be suspected of trying to promote her family’s renewable energy business.

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