Why the FiT-All is a burden to consumers

* This is my article in BusinessWorld today.

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Last May 15, Transmission Corp. of the Philippines (Transco) presented at the Energy Regulatory Commission (ERC) its petition of Feed-in-Tariff Allowance (FiT-All) for 2017 of 26 centavos/kWh. Very fast adjustments from 4.06 centavos/kWh in 2015, rose to 12.40 centavos in 2016, and soon 26 centavos starting mid-2017, all “to save the planet.”

The ERC still has to conduct public hearings in Visayas and Mindanao until early June and likely to make an order by late June, to be reflected in our monthly electricity bills starting July 2017.

The feed-in-tariff (FiT) provision in the Renewable Energy (RE) Act of 2008 (RA 9513) is very anomalous on the following grounds: (1) guaranteed price locked in for 20 years despite technology improving very fast these days, (2) the FiT rates are rising (see table below) yearly due to inflation and forex adjustments, (3) FiT rates of P8+ to P10+ per kWh for wind-solar are way high compared to current Wholesale Electricity Spot Market (WESM) average prices of P2-P3/kWh, (4) current capacity installations for wind and solar are higher than what was allotted, and (5) even consumers in Mindanao who are not part of WESM, not connected to the Luzon-Visayas grids, are paying for this.

The total forecast cost revenue of FiT-eligible plants would be (in P Billion): 10.22 in 2012-2015, 18.54 in 2016, 24.44 in 2017, and 26.14 2018. The bulk of this will go to wind and solar plants.

(a) Wind: 6.32 in 2012-2015, 8.00 in 2016, 9.20 in 2017, 9.20 in 2018.
(b) Solar: 1.50 in 2012-2015, 5.88 in 2016, 7.03 in 2017, 7.00 in 2018
(c) Biomass: 1.86 (2012-2015), 3.95 (2016), 6.69 (2017), 6.79 (2018)
Hydro is small, only 1.52 in 2017 and 3.15 in 2018.
(Source: ERC, Case No. 2016-192 RC, Docketed April 27, 2017, Table 4)

Below are the beneficiaries of expensive electricity via FiT scheme by virtue of their hugeness and higher FiT rates.

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Many renewable firms were not able to snatch the limited FiT eligibility but they can still make money from expensive electricity via the renewable portfolio standards (RPS) provision of the RE law. The RPS coerces and forces distribution utilities (DUs) like electric cooperatives and Meralco to purchase a minimum percentage of their electricity supply from these expensive renewables, the price differential with cheaper conventional sources they will pass to the consumers. If DUs will not do this, they will be penalized and the cost of penalty they will still pass on to the consumers.

fitThe government should step back from price intervention and price control, grid prioritization of intermittent and unstable energy sources via legislation. Consumer interest of cheaper and stable electricity should be higher than corporate interest of guaranteed pricing for 20 years, lots of fiscal incentives and other privileges that are marks of cronyism. RA 9513 is anti-consumers, anti-industrialization and hence, it should be abolished soon.

The quest for more stable and cheaper electricity in the ASEAN

* This is my article in BusinessWorld last April 28, 2017.

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High economic growth means high energy demand coming from stable supply and competitively priced energy, not unstable, intermittent, and expensive energy. This is what the Association of Southeast Asian Nations (ASEAN) economies need as their high GDP growth of 4.7% in 2016 is projected to improve to 4.8% this year and 5% in 2018 (ADB data), much faster than the projected growth of other regions and economic blocs.

One week before the ASEAN 50th Summit Meeting, the 7th Annual Meeting of the Nuclear Energy Cooperation Sub-Sector Network (NEC-SSN) hosted by the Department of Energy (DoE) was held. A pre-feasibility study showed that many ASEAN countries are in favor of using nuclear energy for commercial use. The ASEAN Center for Energy (ACE) also sees nuclear energy as a long-term power source for the member-countries.

The intensive infrastructure projects of the Duterte administration require huge amount of energy. The proposed 25-km. subway in Metro Manila by the Japan government alone would require high energy supply for the dozens of trains running simultaneously below the ground plus dozens of train stations below and above ground.

Lots of base-load power plants, those that can run 24-7 all year round except when they are on scheduled shut down for maintenance, will be needed. These baseload plants include coal, natural gas, geothermal, and nuclear. Hydro plants too but only during the rainy season.

How reliable and how costly are the different power generation plants that the Philippines and other ASEAN countries will need? This table will help provide the answer as I have not seen data for the ASEAN yet.

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Power reliability is represented by plant capacity factor or actual power output relative to its installed capacity. So unstable, intermittent sources like wind and solar have low capacity factor, not good for manufacturing plants, hotels, hospitals, malls, shops, and houses that require steady electricity supply.

Power cost is represented by the levelized cost of electricity (LCOE), composed of capital expenditures (capex), fixed and regular operation and maintenance (O&M), variable O&M, and transmission investment. CCS means carbon capture and sequestration.

The cost of ancillary services for intermittent sources, the standby power plants if the wind does not blow or if it rains make solar plants temporarily inutile, does not seem to be reflected in the transmission cost though.

ASEAN countries like the Philippines will need those power plants that have (a) high reliability, high capacity factor, (b) low LCOE, and (c) low or zero need for ancillary services.

However, more ASEAN countries are entertaining more solar PV and wind onshore since they were convinced to believe that they need unstable yet expensive electricity to “save the planet.”

During the Energy Policy Development Program (EPDP) lecture last April 20 at the UP School of Economics (UPSE), Ms. Melinda L. Ocampo, president of the Philippine Electricity Market Corp. (PEMC) talked about “Electricity Trading and Pricing in the Philippine WESM.” Ms. Ocampo discussed among others, the new management system where the interval for electricity dispatch has been improved from one hour to only five minutes.

I pointed during the open forum that the imposition of the lousy scheme feed-in-tariff (FiT) or more expensive electricity for favored renewables was unleashed even to consumers in Mindanao, which is not part of WESM, and is not connected to the Luzon-Visayas grids. The FiT-Allowance that is reflected in our monthly electricity bill has risen from 4 centavos/kWh in 2015 to 12.40 centavos in 2016 and this year, we should brace for at least 26 centavos/kWh soon because the 23 centavos petition by Transco starting January 2017 has not been acted by the Energy Regulatory Commission yet.

The issue of stable and affordable energy will be tackled in the forthcoming BusinessWorld Economic Forum this May 19, 2017 at Shangri-La BGC. Session 4 “Fuelling Future Growth”of the conference will have the following speakers: John Eric T. Francia, president & CEO of Ayala Corp. (AC) Energy Holdings, Inc.; Antonio R. Moraza, president & COO of Aboitiz Power Corporation; Josephine Gotianun Yap, president of Filinvest Development Corp., and DoE Secretary Alfonso G. Cusi. Yap and Cusi are still to confirm the invite.

Local energy players will have a big role in ensuring that the Philippines should have stable and competitively priced energy supply today and tomorrow.

Rising feed in tariff (FIT) due to more wind-solar power

* This is my article in BusinessWorld last January 24, 2017.

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Cheaper electricity and stable energy supply are among the important components to have fast and sustainable economic growth.

On Jan. 17, the Philippine Electricity Market Corp. (PEMC) sent a press release saying that “effective settlement spot prices (ESSPs) in the wholesale electricity spot market (WESM) plunged to P2.28/kWH for the December 2016 billing period which is the lowest since January 2011. ESSPs refer to the average prices paid by wholesale customers for energy purchased from the spot market.” That is good news as various players using fossil fuel sources like coal, natural gas, and oil, are fiercely competing with each other in generating electricity. WESM was created by EPIRA of 2001.

On the same day, the Department of Energy (DoE) posted a “Request for comments on the draft Department Circular entitled ‘Declaring the launch of WESM in Mindanao’ (on Jan. 26, 2016) and providing for transition arrangements.” Another good news because finally, there will be a formal spot market for power producers and electric cooperatives that will guide a competitive and deregulated market, benefitting the consumers.

Last Dec. 23, 2016, the Energy Regulatory Commission (ERC) posted a request for public comments until Dec. 30 regarding the petition of three wind developers — Trans-Asia Renewable Energy Corporation (TAREC), Alternergy Wind One Corporation (AWOC), and Petrowind Energy, Inc. (PWEI) — that their feed in tariff (FiT) or guaranteed price for 20 years of P7.40/kWh be raised to P7.93/kWh, citing various cost escalations. That was bad news because expensive electricity is never a virtue. I sent a letter to ERC Commissioner Salazar arguing that they say No to the petition.

And last Dec. 6, 2016, the ERC published in a newspaper a National Transmission Corp. (TransCo) petition asking for a FiT allowance (FiT-All) of 22.91 centavos/kWh starting January 2017. That’s also bad news because FiT payments by consumers keep rising fast. From an introductory price of only 4 centavos/kWh in 2015, became 12.40 centavos/kWh in 2016, and almost 23 centavos/kWh this year.

Now two factors will raise the FiT-All for 2017 beyond 23 centavos. (1) ERC will not be able to act on this by January or not even February 2017, that means there will be price underrecoveries that must be added to the original requested price. And (2) with low WESM prices the past few months — P3.19/kWh last September, P2.91/kWh last October, P2.54/kWh last November (data from Meralco), and the P2.28/kWh ESSP last December — this means that FiT-All will go up. This allowance is the difference between FiT rates (highest prices are solar of P10+/kWh this year due to price escalation, followed by wind, then biomass, cheapest is run of river hydro) and average WESM prices. Or FiT-ALL = FiT rates — WESM prices

Expensive electricity is the hallmark of renewable energy favoritism anywhere in the world.

Understand that in my previous columns, it was shown that the main beneficiaries of expensive electricity from renewables in the Philippines are not ordinary firms but huge companies: the Lopez group (EDC Burgos wind) and Ayala group (Northern Luzon UPC Caparispisan wind, and Northwind Bangui) who got P8.53/kWh FiT and combined revenues of about P4.3 billion in 2015 alone.

Let us check Germany’s renewables output. The chart below is for the last three months, Oct. 23, 2016 to Jan. 22, 2017.

Last Jan. 8, its total electricity consumption was 57.4 GW and here are the renewables output that day: solar 0.23 GW, onshore wind 1.53 GW, and offshore wind 0.39, or a total output of only 2.15 GW from these three renewables (see chart).

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A total of only 2.1 GW was generated by solar-wind sources or only 3.7% of 57.4 GW power demand. If Germany relied solely on wind-solar, that would have meant massive, large-scale, and catastrophic blackouts. Germany of course was saved by the power plants that it wants to banish someday — fossil fuel sources like coal and natural gas plus nuke power, within Germany and from energy imports from its European neighbors — and which it kept running. So we did not hear or read such massive blackouts in Europe’s biggest economy.

Aside from expensive direct cost of wind and solar in Germany due to FiT, there is additional indirect cost of higher transmission cost. From a news report, “The Energiewende is running up against its limits” last Oct. 21, 2016 (http://energypost.eu/energiewende-running-limits/)

“German transmission system operator Tennet recently announced an 80% increase in its transmission fees because of the high construction costs of new power lines to accommodate renewable energy. A study of the Düsseldorf Institute for Competition Economics found that by 2025 costs of the Energiewende could exceed €25,000 for an average four-person household.”

The Joint Congressional Power Commission should consider introducing a law in the future that will abolish the RE Act of 2008 (RA 9513). Penalizing the energy consumers to further enrich the favored and crony firms in renewable energy is wrong.

Top 10 energy news of 2016

* This is my article in BusinessWorld last January 6, 2017.

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Here is my list of 5 international and 5 national or Philippine important energy issues last year.

INTERNATIONAL

  1. Donald Trump and his energy policies.

US president-elect Donald Trump’s energy policies are summarized in his major campaign platform, “Seven actions to protect American workers” and these include:

“FIFTH, I will lift the restrictions on the production of $50 trillion dollars’ worth of job-producing American energy reserves, including shale, oil, natural gas and clean coal… SEVENTH, cancel billions in payments to UN climate change programs and use the money to fix America’s water and environmental infrastructure.”

So far some of Mr. Trump’s Cabinet Secretaries are his fellow skeptics of the anthropogenic or “man-made” climate change claim (climate change is largely cyclical and natural or “nature-made”), or simply pro-oil. These include: (a) Environmental Protection Agency (EPA) head is Scott Pruitt, former attorney general of Oklahoma; (b) DoE Secretary is former Texas Governor Rick Perry who is pro-drilling; and (c) Secretary of State is Rex Tillerson, CEO of the oil giant Exxon Mobil Corp.

  1. OPEC cut on oil production.

For eight years, OPEC never cut its oil production despite declining oil prices to protect its global market share under intense pressure from huge shale oil supply from the US. In November 2016, OPEC finally blinked and decided to cut their collective oil output by 1.2 million barrels per day (mbpd) hoping for an increase in oil prices. Non-OPEC countries like Russia and Mexico made an agreement with OPEC to cut output by another 0.56 mbpd, for a total projected output cutback of about 1.8 mbpd. So far, price impact was marginal as oil prices before this OPEC decision was already touching $50 a barrel. But once US shale oil output ramps up, this marginal price increase can easily be reversed.

  1. More wind-solar means more expensive electricity in selected countries in Europe.

The numbers below show that countries with expensive electricity (1-5) have zero or little nuclear power, have high wind power (except Belgium and Italy), and high solar capacity (except Spain). And cheaper electricity countries (6-10) have high nuclear power (except UK and Netherlands) and low wind (except Sweden), low solar capacity (see Table 1).

o4a_010617

  1. By 2040, 46% of global energy demand will come from Asia Pacific.

Based on a recent report by Exxon Mobil which grabbed global energy headlines, it said that it expects China, India, and the rest of Asia Pacific (including Japan, ASEAN, and Australia) will increase its global share of total energy demand from 234 quadrillion British thermal units (BTUS) in 2015 to 322 quadrillion BTUs by 2040. The percentage share of the region will rise from 41% of global demand in 2015 to 46% by 2040. In contrast, the share of EU and the US combined will shrink from 28% in 2015 to only 22% by 2040 (see Table 2).

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  1. By 2040, wind, solar, biomass, other renewables will contribute only 11% of total global power generation.

Coal will remain the dominant source in power generation worldwide by 2040 but its share will decline from 44% in 2015 to 34% by 2040. The share of natural gas and nuclear power combined will increase from 38% in 2015 to 45% by 2040. The share of wind, solar, geothermal and other renewables will marginally increase from 6% in 2015 to 11% by 2040, despite all the political noise worldwide that these renewables will get “cheaper than coal” and attain “grid parity” with conventional sources like coal and natural gas.

PHILIPPINES

  1. Search for an Independent Market Operator (IMO) of WESM.

In the last Congress, then Sen. Serge Osmeña, Chairman of the Senate Committee on Energy conducted a series of meetings until January 2016 about the absence of an IMO that is supposed to manage the Wholesale Electricity Spot Market (WESM). The Philippine Electricity Market Corporation (PEMC) as market operator of WESM remains weird because (a) PEMC Board is chaired by the DoE Secretary, many board members are government officials; (b) Even the supposed four independent directors plus consumer representative (5 total) are all appointed by the DoE Secretary; and (c) PEMC is regulated by the Energy Regulatory Commission (ERC), which is under the administrative control of the DoE Secretary, who chairs the PEMC that is regulated by ERC.

  1. WESM Mindanao, IMEM.

Aside from issues on the new Market Management System (MMS) for WESM rules and the transition to a real IMO, the move to create a WESM in Mindanao via the Interim Mindanao Electricity Market (IMEM) is gaining ground. The Mindanao dispatch protocol will have to be spelled out in detail too.

  1. Imposition of Renewable Portfolio Standards (RPS).

In June 2016, the DoE issued a draft Department Circular (DC) on RPS, a provision in the RE Act of 2008 (RA 9513) that “requires electricity suppliers to source an agreed portion of their energy supply from eligible RE resources.” This RPS will result in more expensive electricity because wind, solar, biomass, and small hydro that are not given feed in tariff (FiT) privilege of guaranteed price for 20 years can demand higher price for their energy output because distribution utilities will have zero choice but buy from them otherwise the DoE will penalize them.

The draft DC wanted an initial “2.15% to be applied to the total supply portfolio of the Mandated Participant in each grid.” When asked what will be the projected price implication of such policy, DoE and National Renewable Energy Board (NREB) officials answered that no study on price implications has been made yet. A weird proposal where proponents have no clear idea on the cost of implementation to energy consumers, the DC was shelved.

  1. Shift in energy mix from energy source to system capability.

During the administration of DoE Secretaries Petilla and Monsada, the DoE wanted an energy mix based on energy source or technology, 30-30-30-10 for coal-natural gas-RE-oil, respectively. This is highly distortionary because many REs are either seasonal (hydro can be baseload only during the rainy season, biomass can be baseload only if feedstock is available) or intermittent like wind and solar. New DoE Secretary Cusi changed the energy mix based on system capability: 70-20-10 for base load-mid merit-peaking plants, respectively. This is a more rational mixture.

  1. Endless demand for expanded, higher feed in tariff (FiT).

As more solar farms and wind farms are constructed nationwide, their developers and owners are lobbying hard for an expanded FiT 2 with guaranteed price for 20 years. Even geothermal developers also lobbied that their new plants should also be given FiT. Currently, three wind developers — Trans-Asia Renewable Energy Corporation (TAREC), Alternergy Wind One Corporation (AWOC), and Petrowind Energy, Inc. (PWEI) are petitioning the ERC that their FiT rate be raised from P7.40/kWh to P7.93/kWh. Three wind farms were lucky or favored to get P8.53/kWh under the original FiT — EDC Burgos (Lopez group), Northern Luzon UPC Caparispisan (Ayala group) and Northwind Power Bangui (partly Ayala).

The PEMC-NGCP Electricity Summit 2016, low ESSPs last October, high FIT-All next year

The annual Electricity Summit jointly organized by the Philippine Electricity Market Corporation (PEMC) and the National Grid Corporation of the Philippines (NGCP) will be held next week in Davao City, the home of President Duterte. PEMC is the market operator, the Wholesale Electricity Spot Market (WESM) while NGCP is the system operator.

I attended theElectricity Summit 2015 held at the Crowne Plaza in Ortigas. Compared to most conferences that I attend, it was an odd or weird one. The organizers and speakers are the energy regulators (DOE, ERC), market operator and system operator, and the audience are the regulated market players. So during the open forum, I think the audience were  hesitant to ask critical questions and comments to the guys who regulate them and operate the system for them. I think I stood 2 or 3 times to ask questions because the huge conference hall has a generally friendly atmosphere to the organizers.

The program this year is a bit different mainly because (1) EPDP is involved, an independent institute, (2) there are speakers from the WB and ADB, and (3) the President is a keynote speaker. Last year, among the key speakers were from (1) the ASEAN Power Grid, (2) the International Energy Agency (IEA), and (3) Mr. MacDonald, the Australian consultant who justified the PEMC structure of many government representatives in the board and still call it an “independent” agency. Provisional program of Summit 2016 as of November 17.

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I have heard the presentations by Majah, Laarni and Geoffrey at the recent PH Economic Society (PES) conference last November 8. The WB and ADB guys will likely be talking about “more renewables please to save the planet” and indirectly say “we offer pretty climate and energy loans to save the planet.” 🙂

What will be new there will be the proposed electricity market and transmission connection for Mindanao. Will the session also tackle the privatization of huge hydro power plants in Mindanao, the Agus-Pulangi plants, others? I doubt it. These plants are still under another government corporation, the Power Sector Assets and Liabilities Management Corp. (PSALM).

Registration is P15,000 per head, not cheap. People from Metro Manila, Visayas must also fly to Davao and get a hotel room for a night or two.

Meanwhile, PEMC sent me their latest press release with a good news: the Effective Settlement Spot Prices (ESSPs) in WESM further fell from PhP2.86/kWH in September to PhP2.48/kWH in October 2016 billing period. Good news, indeed. ESSPs are average prices paid by wholesale customers for energy purchased from WESM. Meralco has been getting more of their power supply from WESM over the past two or three months, something like 15-20% of their power supply. Mura eh, good decision.

Supply – demand dynamics. Higher supply, more competition among gencos, lower prices. Limited supply while demand remains high, higher prices.

This is the power generation mix for October 2016 in the Luzon-Visayas grids, PEMC data. Will the planet saviours who keep insisting on “more wind-solar please to save the planet” be happy with frequent, long hours of blackouts daily, more candles and noisy gensets 365 days a year? Solar + wind can only supply 2.3% of the total electricity need in Luzon-Visayas grids including Metro Manila.

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Meanwhile, PEMC will not report that there is a bad news to low ESSPs — that the FIT-All (feed in tariff allowance) will naturally rise big time next year.

FIT-All = (Total FIT collections by the renewables firms) – (collections from WESM)

So, since the collections from WESM are low because of low ESSPs while the total FIT collections will be high as more solar-wind are added to the grid with their expensive guaranteed price (for 20 years, mind you), FIT-All will naturally rise. From 4 centavos/kWh in 2015 to 12.40 centavos/kWh this year, to about 20 centavos/kWh in 2017?

If we combine these: (a) FIT under-recoveries in 2015 because of the low FIT-All of 4 centavos + (b) FIT under-recoveries in 2016 because of low ESSPs and insufficient 12.40 centavos + (c) more expensive solar-wind power added to the grid, the resulting FIT-All by 2017 will be high.

The FIT administrator is another government firm that owns the country’s grid system and assets, the National Transmission Corporation (Transco). I do not know yet how much Transco has petitioned the ERC for the FIT-All next year.

Again, my bottomline: government interventions in setting the energy mix, in setting fixed and guaranteed pricing for the variable renewables (solar, wind, biomass, run-of-river or small hydro), in granting mandatory dispatch for these renewables, are all wrong. They can lead to more expensive electricity, more unstable supply and “brownouts-friendly” electricity

Jarius Bondoc on FIT for renewables

I am reposting the article of Jarius Bondoc in his column in Philippine Startoday. My comments and discussions after his paper.

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Enough is enough. Developers of renewable energy (RE) must stop making us electricity users subsidize their insolvent solar and wind farms. They’re already wheedling P8 billion a year from us. That windfall, called feed-in tariff (FIT) in our monthly bill, enables their clean energy to compete with cheap but dirty coal. Yet precisely because the FIT is free money for them, they feel no compulsion to improve their output and bring down costs. And now they have the gall to ask for even higher subsidies starting next month.

RE inflicts a double whammy on our monthly electricity bill. The FIT subsidy of 12.4 centavos per kilowatt-hour per se swells the bill by two percent. Worse, RE further inflates the cost of generating electricity to almost 50 percent. That’s because the mix of power sources that go into the generation grid is such that 30 percent must come from the inefficient but favored RE plants.

Why is RE inefficient? That’s for the developers to explain. For decades they’ve been enjoying state subsidies worldwide to improve. Yet solar farms are only 23-percent capable of converting and storing sunlight to power. It even costs more electricity to produce one solar panel than the energy it will produce when laid out under the sun. That production process even uses acids and oxides that emit greenhouse gases and create waste, National Geographic reports. Statistics for wind are worse. The mills even directly kill flocks of birds and bats that fly into the rotors, as well as add to noise pollution. As it is now, RE worsens climate change.

To justify their subsidies, RE developers must point to a bogeyman: coal. Hiding their own bad effects on health and environment, they demonize coal as a killer fuel. They want the Philippines to switch to more RE and lessen coal from the present 39 percent of the generation mix. In truth, however, coal has become cleaner than it was three decades ago. Pollution is basically the result of wasteful processes. But coal plants have tremendously improved efficiencies, and this reduced waste and pollution. That is why Europe, where environment laws are strictest, has coal making up 25 percent of the generation mix.

Cases long have been made against subsidies to certain industries. Congress, controlled in the ‘60s-’70s by sugar barons, allocated billions of pesos a year to subsidize the plantations and central mills. Supposedly it was to enable the hacienderos to compete with foreigners, upgrade their facilities, and uplift their farm workers. The result is well documented. The sacada seasonal workers became poorer than ever, the plantation and mill technologies remained backward, while the hacienderos used the subsidies to buy Rolls Royces and Aston Martins.

That is what’s happening today. FIT subsidies of P8 billion a year are now blocked off for the next two to three decades for the new RE oligarchs. Some of them are relatives of the very politicos who imposed the FIT subsidies. Living off us electricity consumers, they will not improve their technologies or raise salaries of their workers or bring down their costs to below that of their hated coal. Why should they, when that would mean erasing the excuse for their FIT subsidies. Meantime, Filipinos remain poor because electricity cost – the highest in Asia – discourages employment-generating investments and ultimate economic development.  We electricity consumers should not let those RE oligarchs buy up all the luxury condos and executive jets at our expense.
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Many good points by Jarius. May I add the following:

1. Feed in tariff (FIT) Allowance for renewables, especially wind and solar, is not P8 B a year, much larger than that. It’s about P11 B in 2015, P20 B this year, and P23 B in 2017.

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Source: Transco petition for FIT-All for 2016, ERC CASE NO. 2015-216 RC, p. 10.

2. On solar inefficiency, its capacity factor can range from only 18% (in PH, WESM data) to 23-25% in developed countries like the US.

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3. On solar panels “production process even uses acids and oxides that emit greenhouse gases and create waste”, more than that, solar farms require zero trees within and near the vicinity. On average, it takes 2 hectares of land to produce 1 MW of installed capacity.

Consider this solar farm in Calatagan, Batangas: 63 MW capacity on 160 hectares of land. Zero tree allowed. The main hindrance to solar power generation is shade — from clouds and tall trees nearby.

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So while many environmentalists say, “Plant trees to save the planet”, the solar environmentalists say “Zero tree to save the planet.”

4. On “electricity cost – the highest in Asia”, more of 2nd highest after Japan. For the ASEAN, here’s one data.

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Source: M. Ravago, R. Fabella, R. Alonzo, R. Danao, and D. Mapa, “FILIPINO 2040 ENERGY: POWER SECURITY AND COMPETITIVENESS”, EPDP paper, October 2016, p.2.

Nonetheless, it is a good paper. Congrats, Jarius.

What companies receive FIT and by how much?

FIT1May 19, 2016.

This is the subject of my letter to the National Transmission Corporation (TransCo) last Monday. TransCo is a government corporation that owns all the transmission assets of the government. Among its five key responsibilities is to administer the Feed-in-Tariff Allowance (FIT-All) Fund for renewable energy (RE) generators. Its website clearly and proudly discusses the FIT system and why it is “good” for electricity consumers because of its “merit order effect”.

I wrote to their customerservice@transco.ph early morning of May 16, 2016:

Dear Sir/Madam,

I would like to request for data on (a) list of RE companies that have received FIT, 2015-2016, (b) how much each company received, (c) total FIT payment, (d) related data that you may want to share.

I will use the data for a research paper that I am writing for our think tank, Minimal Government Thinkers, which I hope to send you and the DOE a copy, and a short version for my column in BusinessWorld. I assume these are public data as the money collected is taken from electricity consumers nationwide.

Thank you very much and I hope to  hear from you.

Sincerely,

Bienvenido “Nonoy” Oplas, Jr.
President, Minimal Government Thinkers, Inc.
Fellow, South East Asia Network for Development
Fellow, Stratbase-Albert del Rosario Institute (ADRi)
Columnist, BusinessWorld, My Cup of Liberty

I did not get any reply. I followed it up with another email  yesterday morning,

Hi,

I would like to ask if you can share this data with me.
Thank you very much.

Sincerely,

Bienvenido Oplas, Jr.

Still no reply. Ahh, this must be among their “top secret” data perhaps? One problem with the absence of a Freedom of Information (FOI) law or Exec. Order is that certain government offices can only collect-charge-bill-fine us ordinary people and when we ask where the money went to, they can only give one standard reply, the Sound of silence.

FIT2Anyway, I saw this report in Business Mirror the other day, among the numbers reported there:

“FiT subscriptions for RE resources have significantly increased to 806.82 megawatts (mW) from 646.65 mW installations since the start of 2016. The following are the FiT subscriptions to date: Biomass has 11 power plants with a total capacity of 94.25 mW; hydro has four accounting for 26.6 mW; wind has six accounting for 393.9 mW.

Meanwhile, as of March 15, 2016, the DOE issued Certificates of Endorsement for FiT Eligibility (COE-FiT) to 11 solar-power plants accounting for 292.07 mW to the Energy Regulatory Commission (ERC). More solar-power projects may be issued COE-FiT at the completion of the ongoing validation and assessment of the submissions received by the DOE in relation to the March 15 deadline for the expanded FiT for solar-power projects.”

So, as of March 15, 2016, DOE issued COE-FiT for the following installations:

* Wind with six power plants, 393.9 MW,
* Solar with 11 plants, 292.07 MW,
* Biomass with 11 plants, 94.25 MW,
* Hydro with four plants, 26.6 MW,
Total  806.82 MW.

I just want to know who are those 6 wind plants, 11 solar plants, etc. and how much did they get from the 4.06 centavos/kWh that we consumers paid to them from February 2015 to March 2016. The FIT has been raised to 12.40 centavos/kWh starting April 2016.

Expensive electricity is lousy. Making it even more expensive with extra charges like FIT-All is lousier. And when we ask who are these companies that receive the extra charges, the answer is a Sound of silence.

Hi TransCo, I still hope to receive a reply from you. I hope to write another paper about you soon, whether you give a reply (and some data) or not. You will receive this blog post via email, fb, twitter, etc. Three of your Board Members are Cabinet Secretaries — DOF, DOE, DENR. They all have twitter accounts. Thank you.

May 21, 2016.

Today, I received a reply from Transco, they sent me two tables, the FIT-All cash flow and fund payables as of end-December 2015. They also gave me the name of the person I should talk to, the office local tel. no.

fit
Thank you Transco. I still need the list of companies that received and about to receive the FIT-All. I will call next week.