New RE projects to increase electricity bills

By Myrna M. Velasco – December 7, 2020, 6:30 AM
from Manila Bulletin

While renewable energy (RE) developers are brandishing that their technologies are already the cheapest in the market, the National Renewable Energy Board (NREB) ironically dropped the bomb that the programmed RE projects in the country will increase the power bills of Filipino consumers by P0.23 per kilowatt hour.
NREB Chairperson Monalisa C. Dimalanta forthrightly stated in the Energy Investment Forum hosted by the Department of Energy (DOE) that “It will cost us about P0.23 per kWh to realize our RE goals, we need to pay P0.23 more per kWh based on the costing that we have done.”

The RE-underpinned rate hike will shove consumers deeper into quagmire of subsidy payments that will stretch for two decades, according to experts, even if many would still be pained with economic suffering in the coming years because of the pandemic.

RE development terrains in the Philippines are in contrast to what is happening in various parts of the world, where RE technologies could already compete squarely with traditional energy technologies even without their consumers subsidizing or paying extra for their costs.

The NREB is the agency that prepared the National Renewable Energy Plan (NREP) which targets to increase the share of RE in the country’s energy mix to 35-percent by year 2040.

The new rate hike that will be added in the electricity bills of consumers will be courtesy of the Renewable Portfolio Standards (RPS) that the government is targeting to implement next year. And that will be on top of the feed-in-tariff (FIT), which is a subsidy already being passed on in the bills of Filipino consumers – a charge that is relatively expensive if compared to Asean neighbors, like Vietnam, which has way cheaper FIT costs for variable or intermittent RE technologies like solar and wind.

Under the RPS policy, distribution utilities in the country are mandated to procure certain percentage of their supply portfolio from RE capacities – and the NREB has proposed to escalate that to 2.52-percent instead of the 1.0-percent increment annually.

According to Dimalanta, the required RE installations for the Philippines to achieve its RE ambition shall be 5,800 megawatts by 2030; and additional 22,400MW to year 2040.

With that scale of project developments, she emphasized that RE’s share in the mix could climb to 37-percent by 2030; and will surge to 56-percent by 2040.

The NREB chair qualified that if the RPS will be maintained at 1.0-percent, the country’s RE development scenario will remain fledgling – with just a share of 27-percent by 2030; and about 32-percent by 2040.

“If we increase RPS to a certain level higher than 2.0-percent by 2023, knowing that these first two years is sort of the learning curve on RPS for all the mandated participants, we will get to our target, that is if we keep our target at 35% and by using RPS alone,” Dimalanta explained.

She said the share of RE in the country’s power mix needs to be accelerated, as NREB observed that this slowed down in recent years despite the massive promotion being done by developers on these technologies.

“In terms of our review, we realized we are short of that target; and short by a long stretch… we are also aware that the share of RE has been diminishing over the years,” Dimalanta lamented.