Disruptive solar proponent

People say they want change. Ordinary folks like you and me are tired of the status quo. We welcome disruptors to our existing exploitative systems.

Recent survey results from Pulse Asia revealed that 82 percent of Filipinos want new options for their electric service providers or electric utilities. The survey was conducted by Pulse Asia from June 15 to 21, 2018.

According to Pulse Asia research director Ana Maria Tabunda, support for new electric service providers is consistent across all ages, classes and geographies, with ratings in favor of new options for electric utilities at 88 percent in NCR, 78 percent in Luzon, 84 percent in Visayas and 83 percent in Mindanao.

One other thing the survey also found is that 89 percent of Filipinos are in favor of increasing the use of renewable energy. It seems Malacañang has taken note and is said to be preparing an executive order to allow competition in electric distribution from private sector investors using new technologies to lower the cost and improve the quality of electric service in the Philippines.

Additionally, the House just passed a bill that gives a franchise to Lean Leviste’s Solar Para sa Bayan Corporation. The franchise is supposed to make it easier for Leviste to establish solar microgrids to supply power in unserved and underserved areas throughout the country.

Leviste, the 23-year-old son of Sen. Loren Legarda and former governor Tony Leviste is probably the boldest and most innovative entrepreneur of his age. His bold approach to solar power has made him enemies. Folks from the renewable energy sector as well as from the conventional energy groups hate his guts.

The franchise Leviste is seeking has been called an attempt to have a national super franchise which his competitors say “will create a monopoly in the power industry which EPIRA abolished; will infringe on the existing and legitimate franchises of rural electric cooperatives, and will be free of any regulatory control.”  

A group of congressmen tried to recall the approval of the bill supposedly because they didn’t have sufficient discussion on it. The usually powerful lobby of electric coops were caught sleeping and belatedly accused Leviste of using his political connections to capture market share.

Rep. Arthur Yap who sponsored the bill said they had a lot of discussions. Rep. Yap said there were a number of hearings on the bill where everyone present was heard. Indeed, one of those protesting now offered an amendment (making franchise non transferable) which was accepted.

Yap also pointed out that the franchise is being given without any government subsidy (unlike electric coops that cannot exist without it); no tax incentive and no exclusivity. Yap said by no stretch of the imagination could it be called a super franchise.

I checked with Lean and he denied he is getting a super franchise. “There is a lot of misinformation being circulated by utilities that don’t want real competition to erode their own monopolies, and unfortunately, some potential minigrid developers have been misled into taking the same position.

“The proposed bill has an explicit Section 16 Non-exclusivity Clause (as do all franchises), and Article 12 Section 11 of the Constitution states that no franchise shall be exclusive. That corrects the claim, in black and white, that we are not applying to become a national monopoly.

“To the contrary, the proposed bill sets a precedent for others to apply for the same – which is why utilities are against it.”

Lean explained that he sought a franchise to build solar minigrids because utilities around the country have blocked attempts to establish minigrids even in isolated off-grid areas not served by any utility or cooperative.

The young Leviste had a difficult time putting up his off-grid solar power project on an isolated barangay in Mindoro that was not getting any electricity from the cooperative. The local electric coop insisted it had exclusive right even if they have no plans to connect the barangay any time soon because of cost.

Lean eventually persuaded them to let him test his concept of a solar power installation supported by a Tesla battery. The installation has since been providing 24/7 power to the barangay at a cost a lot lower than the rate of the local electric cooperative.

 After inaugurating his test project, Lean announced his plan to establish solar-battery minigrids to bring 24/7 power to 12 towns in provinces including Mindoro, Palawan, Masbate, Cagayan and Aurora. This is the first time so many will get electricity at zero cost to government.

Leviste noted that his company, Solar Para Sa Bayan, is already operating without government subsidies because “we also have a social mission. Government must allow private investors to use new technologies to serve consumers on a non-exclusive basis.”

The Department of Energy estimates over 2.3 million Filipino households remain without electricity. Many more experience regular blackouts. I recall from the time I was with the energy department in the 80s, rural electric cooperatives charge the highest rates in Asia because they were politically corrupt, highly inefficient with system losses of 30 percent or higher. 

I think Leviste has seen an opportunity offered by today’s solar and battery technology to serve off-grid areas. He is not asking for a subsidy like the feed-in tariff charged by other renewable energy operators. I am intrigued to see if he can actually pull it off.

The way I see it, the power sector is big enough to allow a young man to show what he can do. He is disruptive, for sure, but that’s the name of the game today. Best of all, he is putting his money where his mouth is. Those Tesla batteries aren’t cheap.

Lean may fall flat on his face but he is young. We need young people like him to make big bets on their generation’s future. Go for it, Lean!

Boo Chanco’s e-mail address is [email protected]. Follow him on Twitter @boochanco