We Need Consistency and Coherence in our Energy Mix Policy….Walking the Clean Energy Talk
David Celestra Tan, MSK
8 March 2020
Our country is supposed to have joined the civilized world in recognizing and addressing the climate change problem. It is a signatory to the Kyoto Protocol. It joined the global cavalry march for carbon neutrality and fight against global warming.
It passed a law called Renewable Energy Law of 2008 and mandated the granting of generous Feed In Tariff for renewable energies like solar, wind, mini-hydro, biomass, and ocean thermal. With the first and second round of FIT, it committed to heavily subsidize about 2,000mw of these clean energy and costing consumers P10 billion a year in FIT subsidies for 25 years. This has been a costly walk and talk on clean energy that is being paid for by the consumers.
Yet, we are apathetic when it comes to controlling the original causer of pollution and global warming, coal and oil. Meralco’s blatant move to corner its own power supply by signing in 2016 3,551mw of long term PSA, all for coal plants, representing 80% of the energy needs, was stopped not for enlightened environmental reasons but for regulatory misuse of power. And not by policy makers but by consumer advocacy groups Alyansa Para SaBagongPilipinas and Bayan Muna.
We wrote then that Meralco actually preempted the incoming Administration of President Duterte from defining the country’s energy mix policy by signing midnight power supply contracts all controlled by its subsidiary MeralcoPowerGen months before the new administration can take over. Thank God the Supreme Court intervened and prevented the ERC from giving due course to Meralco applications for approval of the seven midnight contracts.
Meralco however is not to be rebuffed. It is determined to maneuver the CSP system to nonetheless channel the awards to its own sister generators. The 1,200mw so called “greenfield” project is evidently being maneuvered for its Atimonan One Energy subsidiary. And other pretenders to the bidding are San Miguel who claimed to be interested in bidding if the technology is loosened. And guess who is their partner, MeralcoPowerGen. And both technologies, Super critical HELE and Circulating Fluidized bed are both for coal. The other supposed interested CSP bidder is GN Power, which is now controlled by the Aboitiz Group, another member of the Meralco Six that got together in March 2016 to fast track the seven midnight contracts of 3,551mw, all coal. GN Power’s power plants are also coal.
Meralco appears to just want the business and profits and isn’t aleast bit concerned about climate change. Meralco, the ever public hoodwinker, dared to even announce their commitment to “sustainability” launching gesture programs like “single use plastic”, waste segregation, no smoking, clean energy. The key word is “gesture”.
Given the demonstrated determination of Meralco to corner its own power supply, happen what may, and their absolute refusal to truly open its market to real competition, it is highly likely that Meralco will eventually buy at least 30 billion kwh of its energy from coal a year and the corresponding carbon dioxide emissions.
How much solar and wind and other renewable energies do we need to off-set Meralco’s coal carbon emissions? Certainly way more than what Meralco is announcing to be a 1,000 mw renewable energy program which by the way will also end up being controlled by MeralcoPowerGen just like the Bulacan Solar.
It will be nice if Meralco will walk the clean energy talk and hold a CSP for 1,500mw of LNG fueled power supply. Then they can gain some credibility in their commitment to cleaner and cheaper fuel. Given their record, they will most likely announce a CSP for LNG capacity only after MeralcoPowerGen has found a LNG player who is willing to be their minority partner. Until then it seems they are neither talking nor walking.
The Department of Energy had opened the door for LNG by issuing permits for Import terminals. PNOC, the Lopez Group, Energy World, and the Dennis Uy Group have been issued import terminal licenses. But issuance of these permits fall more in the category of “tip-toeing” instead of walking. Without LNG markets, those import terminals would just be bridges to nowhere. And hence who will really build them?
Due to our urgency of need for more power, we need to be “running”. That, the DOE can do by turbo charging LNG power development by opening the distribution market to LNG or at least to “non-coal” options.
The DOE can use the CSP Policy implementation as the vanguard for change. The CSP terms of reference (TOR) only need to be neutralized to require “low emissions” but not the current Meralco favorite Super critical HELE which is coal. Even nuclear can qualify. If the DOE manages to assert itself and make Meralco hold truly open competitive bidding and technology, we would be removing the market barrier to entry of cleaner and cheaper energy.
Where is the consistency and coherence in energy goals when after burdening the consumers with P10 billion a year in FIT subsidies supposedly to clean up the carbon footprint of the country, we will not do what is necessary to stop or reduce the source of the carbon mess, which is coal. Just do not make sense. And now the DOE is seeking more subsidies for RE by adopting the supposed “degressed” FIT rate as the automatic “green energy rate” under its new scheme called RPS. These again will fall under the category of sanitizers that will be shouldered by the very people who are suffering from Coal.
If that is not bad enough, the coal projects being pushed by Meralco are not truly subjected to open bidding and hence would be overpriced charges to the consumers.
The announced 2,000mw new RPS program of the DOE will only generate about 6 Billion kwh of energy vs at least 14 billion kwh from 2,000mw of LNG plants. And we don’t have to subsidize it.
The DOE’s own policy or implementation inconsistency extends to the power generation in the off-grid missionary areas where its Electric Power Industry Management Bureau (EPIMB) have yet to show true commitment to reduction in missionary subsidy by reducing full reliance on expensive diesel and bunker c and by imposing the resolute adoption of hybrid systems that incorporate cheaper and cleaner renewable energies whenever available on these islands. EPIMB still elects to adopt “open technology” which is actually only a euphemistic way of tolerating the continuation of diesel and bunker c. Meanwhile, power supply even in bigger islands like Palawan, Occidental Mindoro, Masbate, Catanduanes, and Marinduque, continue to be bunker c based and the introduction of renewable energy even if feasible are insufficient. Oriental Mindoro is an exception where the local cooperative had commitment to a lot of mini-hydro and biomass projects that would generate up to 40% of its energy needs.
Meralco itself is inconsistent and I am sure they know it. While ringing the alarm bells about the urgency to contract for new power supplies, here they are trying to bid the 1,200mw Atimonan One and penciling it to come on line in 2025 yet. Why not 2024? It is now almost a year since they tried to do the remedial CSP for this greenfield project but since they are determined to manage the bidding evidently to assure they go to their sister companies it had not moved forward.
It seems to Meralco, the urgency of new power supply and the public need for least cost and cleaner fuel are just public relations challenges that can be managed with their full control of the media. And astute public hoodwinking.
We are not seeing Meralcoto be truly trying to bring timely and adequate and least cost power to their service area as mandated by their mega-franchise for Meralco area.
One company walking the talk is the First Gen Group. They are committed to LNG and to geothermal and probably to renewable energy. The Ayala Group is another major player who seems to be truly committed to clean energy with their sell-off of its interest in the coal plants GN Power and its forays into biomass, solar, and wind projects here and abroad.
As a country, we need consistency and coherence in our Energy Mix Policy and for the government policy makers, regulators, and legislators and the dominant players to truly Walk the Clean Energy Talk. The peril to humankind of global warming and climate change is real. And it is here and now.
Let us reduce coal projects now. Our power shortage will happen not because we are stopping coal. It would be because power projects are being callously held back by those who want to control and overprice them no matter what.
Consumers and inhabitants of the earth really need saviors. We hope they come soon enough.
MatuwidnaSingilsaKuryente Consumer Alliance Inc.
matuwid.org
david.mskorg@yahoo.com.ph
