Philippines' 40 Richest Power Surge

Brian Mertens, 06.22.11, 06:00 PM EDT 
Forbes Asia Magazine dated July 18, 2011 




The Philippines' power sector, plagued by a legacy of inefficient state ownership and underinvestment, is in the limelight as a liberalization process begun in 2001 gathers speed. With demand for electricity climbing 4% annually, perennial brownouts and hardly any large-scale power plants in the pipeline until 2014, the country's tycoons are rushing to plug the gap.


 One strong incentive is favorable regulatory changes and privatization structures, which were designed to attract much-needed investments.




 Several of the country's wealthiest have snatched prize generation and distribution deals at attractive prices in a privatization wave that saw a dearth of foreign bidders amid the global financial crisis. More than 70% of generation assets once in government hands have been privatized. Today power companies account for over one-third of the total market capitalization of the Philippines Stock Exchange.


 A new electricity leader is Eduardo Cojuangco's San Miguel, which spun off its brewery operations in 2007 to fund new businesses. It has acquired four major plants to become the nation's largest independent power producer; it owns one-third of former state-owned unit Manila Electric Co. (Meralco), the largest distribution grid. According to Credit Suisse ( CS -  news  -  people ), by next year San Miguel will be generating more profits from power than from its famous beers and other beverages.


 Last year mall magnate Henry Sy's son and namesake Henry Sy Jr. led the group's charge into power paying $590 million to buy Enrique Razon's 30% stake in transmission firm National Grid, in which Robert Coyuito holds 30%. A proposed backdoor listing of the unit should boost their wealth further.


 Construction tycoon David Consunji's power play has enriched him: Shares of his DMCI have been doubling every year since 2009, when it bought a 600-megawatt coalfired plant from the government.


 Another big boomer is Aboitiz Power Corp., whose market cap has soared eightfold since 2008, boosting the wealth of Enrique Aboitiz and his nephew Jon Ramon. Aboitiz is investing $2.8 billion to add 1,400 megawatts of capacity. With all this action, competitive pressures are likely to increase, but Credit Suisse predicts that capacity will lag demand through 2014, helping shore up prices.

1-M solar-powered homes eyed to cut power costs

Support this bill.

***

WITH the Philippines' electricity rates now ranked as the fifth highest in the world, Bayan Muna Representative Teddy Casiño on Tuesday filed a measure that would help reduce electricity rates "by putting it in the hands of the people".

Dubbed the "One Million Solar Rooftops Act", House Bill 5405 mandates the government to encourage the use of small solar power systems in homes and business establishments through various financing packages and fiscal incentives.

Under Casiño's proposed legislation, Pag-Ibig, GSIS and SSS will be mandated to offer soft loans for members who want to install solar power rooftops in their homes and businesses. The measure covers solar power systems with a capacity of 10 kilowatts (kW) and below for residential, and 500 kW and below for business establishments.

Pag-Ibig, also known as the Home Development Mutual Fund (HDMF), helps its members buy their houses. The Government Service Insurance System (GSIS) and the Social Security System (SSS) are pension funds of public and private employees, respectively.

The bill also requires electricity distributors like Meralco to allow small solar power users to feed excess power into the system and get paid for it through a net-metering arrangement, resulting in savings in their monthly bills.

“This measure will make ordinary electric consumers producers of electricity as well, thereby empowering them and opening up various options for reducing their electricity bill,” the party-list lawmaker said.

"If government is serious in implementing the RE (Renewable Energy) Law, it has to accelerate its permitting process, start awarding solar service contracts, and allow homeowners and commercial establishments to produce their own power needs by using their rooftops,” he added.

"It is hoped that through this, the demand for clean solar energy, as well as the opportunities for local manufacturing and related solar energy products and services, will increase,” the author stated.

The Trade Union Congress of the Philippines (TUCP) revealed early this week that the Philippines has the highest electricity in Asia and the fifth highest in the world. Other countries who belong in the top five are Denmark, Germany, Italy, and Austria.

Renegotiate IPP contracts

In a related development, the House committee on energy approved a motion to draft a resolution urging the Power Sector Assets and Liabilities Management (Psalm) to renegotiate the 19 contracts with independent power producers (IPP) sealed in the last 10 years.

"The country overpaid the IPPs by $10 billion dollars based on normal costing. The $10 billion would translate to 10 power plants. It is enough to take care of our power needs in 10 to 20 years,” Parañaque Representative Roilo Golez, a member of the House energy committee, said in a news conference.

Casiño, for his part, said that the review and renegotiation of 19 IPP contracts will reduce or totally do away with P74 billion worth of stranded contract costs that is being planned to pass on to electricity consumers via a monthly P0.36/kWh universal charge.

The House energy committee will also ask the Energy Regulatory Commission (ERC) to suspend ongoing hearings on Psalm's petition to impose the said universal charge while the renegotiations are pending.

The universal charge is a pass-through charge imposed by Meralco for the recovery of stranded debt and contract costs of the National Power Corporation (Napocor).

Stranded debts are obligations left over after proceeds from power plant sales have been used to pay for debt originally meant for the construction of these facilities. Stranded costs are charges resulting from the rise of foreign exchange and fuel prices as guaranteed in the power purchase agreements between Napocor and IPPs.

Over the weekend, Meralco said it will increase its electricity rates to an average 14.19centavos per kilowatt hour (kwh). (Kathrina Alvarez/Sunnex)

Summer 2012... How GREEN have you been?

How GREEN are you during the Summer of 2012?


During the month of March 2012 when the summer heat started to kick-in an aggregate total of 77% of electricity was produced using conventional power plants. These is composed of Coal (40.1%), Natural Gas (35.3%) and Diesel/Oil (1.6%) Power plants that litter across Luzon and Visayas. The Green Electricity is only 23% (Geothermal 16%, Hydro 6.8%, Wind 0.13%, and BioDiesel 0.09%). Refer to below pie for illustration. (Source: WESM monthly report)

April 2012, see pie below:

And May 2012

If Pies can speak a thousand words, what would it tell you? It would tell you that the electricity that you used during the summer months came from fossil based power plants. 

Is it bad then? Not bad per se... but neither it is good. You could have at least mitigate the use of "dirty" electricity by shying away from malls... you should have gone to the provinces if you have one, stay there for the summer and spend with your cousins... under the mango tree, or to the rivers and beaches instead of going to the malls, because malls are power hungry buildings. Just to think of it... Earth Day Celebration was celebrated in the malls? Are you kidding me? Earth Day in malls? We're out of our minds! It should have been in the Parks... celebrating life, earth, wild life, trees, future, children with arts exhibits, poem reading and rock-and-roll!... But malls? Twisted logic!

Can we increase the GREEN electricity then? Yes... by installing more wind and solar farms... and as an individual install a small scale solar generator in our roof tops.

Ask yourselves, have you been GREEN the last summer? I know what you did last summer... you hanged up in the malls! 

Commercial muna, visit our website: www.eastgreenfields.com

Renewable Energy Law’s Enforcement Sought

Finally somebody got into their senses.

Implement the law... now!

*****

MANILA, Philippines --- House leaders asked the Aquino government yesterday to exercise its "political will" in addressing the rotating brownouts in Luzon by ensuring the full-blown implementation of the more than three-year old renewable energy law.

Aurora Rep. Juan Edgardo "Sonny" Angara and Eastern Samar Rep. Ben Evardone challenged the government to resolve the problem by keeping an eye on the full-swing implementation of Republic Act 9513 or the Renewable Energy Act.

They also pressed on the Energy Regulatory Commission (ERC) to address the issues hounding the proposed Feed-In Tariff (FIT), which according to them stalls the implementation of the renewable energy law.

FIT is a tariff scheme which provides incentives to local and foreign investors who intend to pour in resources in the country's renewable energy program.

"We should enforce the renewable energy law and for it to be enforced fully, political will is needed," Angara said, citing the need to further explore the renewable sources of energy, including the geothermal, solar, wind, hydroelectric and biomass.

The government was only able to tap 35 percent of the country's renewable sources of energy.

Angara lamented that the ERC has been sitting on the FIT proposal, which provides for the payment of renewable energy developers depending on the energy that they will inject into the transmission or distribution system. Since the signing of the Renewable Energy Act in Dec., 2008, the FIT policy regime has long been stalled.

"We don't realize the value that we are sitting on," Angara stressed, believing that the FIT would attract more investments for the energy sector and would pave the way for cheaper power rates.

In 2009, the ERC, along with National Renewable Energy Board, was expected to come up with rules for the tariff scheme.

Evardone said the government should "hasten the resolution" of the FIT issue, which he said, has been long pending before the desk of ERC.

"It (energy problem) really remains a challenge for the government. I agree with Congressman Angara that it needs political will," he said.

He even cited that the non-implementation of such traffic scheme was due to the lobbying "between those existing power producers and the proponents of alternative energy."

"The existing power producers want to protect their interests from the new players which are for alternative energy program," he disclosed.

Last June 22, some parts of Luzon experienced one-hour rotating brownouts. Power interruptions were experienced in San Pascual, Batangas; parts of Malolos, San Ildefonso, San Rafael; parts of Quiapo, Sampaloc, Sta. Cruz and Tondo in Manila; parts of Bacoor, Dasmarinas, General Trias, Imus and Kawit in Cavite; and parts of Caloocan, Las Pinas, Pasig, Quezon City, Balintawak.

The National Grid Corp. of Philippines disclosed that the Luzon grid has "thin" power supply reserves at only 101 megawatts, which fired up rotating brownouts in some parts of the region.

Source: Manila Bulletin

Solar Power - Small Scale Grid Tie Power Generation

Solar Power - Small Scale Grid Tie Power Generation

Phetz Zantua

At an alarming rate that the power crisis is creeping in our midst either by limited power generation capacity or by escalating bunker and coal prices, it is but riveting that full implementation of Renewable Act of 2008 has turned into lip service.

It has been 4 years ago when RA 9513 (Renewable Energy Act of 2008) was enacted and yet renewable energy has not yet sink in into general public consciousness. The general public is still left in the dark (pun intended) on the provisions of the law that enables them to become energy independent. All talks are concentrated on large scale commercial Renewable Energy (RE) power generation. There are no mention or public information drive that encourage small scale power generation like house grid-tie systems.

While it is a fact that FIT is still debated and to be agreed upon by major players, there is the provision of the law that is totally neglected. Section 10 of the Act stipulates Net Metering scheme that can be entered between utility provider (e.g. Meralco and consumer), but this provision is not being implemented or encourage to be "enabled."A net metering scheme will encourage house owners to install themselves with Renewable Energy (RE) power generating units such as grid-tied Solar power systems.

There is now current technology that is economically viable to be fitted in household level. There are now systems that can be specified or scaled to provide a percentage of the household demand. The system can also be scaled up to provide electricity generated by a RE source (i.e. solar panels) to even up to 100% of the household demand. 100% can be realized only by full implementation of Section 10 of the law, since in absence of clear regulations on the net metering scheme the household owner will be in trouble explaining to Meralco how come his bill has gone down to Zero consumption. What owners of grid tie solar power system can do now is size their system at a level that they will not export too much of excess electricity or dump their excess since excess exportation of surplus power will yield them nothing in return or in fact put them into trouble if local Meralco offices will treat this phenomena as tampering.

As a private citizen with an adequate know-how of the technology, I have installed in my own household a grid tie Solar panel system. We are now in the second month of operation of the system and we have now reduced our dependency on Meralco by as much as 32%. We have lowered our bill at almost half we pay on average the past year, we were able to cut down our demand from 248 kW-hr (12 month average) to 180 kW-hr (last February billing) and to 149 for March bill’s. There are days when our household demand is lower than what the system is producing, during those days we are exporting power from solar panels to the Meralco grid. The savings if equated to car (Honda City as a reference) milage is almost 96 kilometer driving without filling the tank, and if equated to greenhouse off set value, we off setted an approximate 1 tree already. At the rate of the generation we are making, we are about to off set 12-15 trees in 1 year.

System like mine is still unknown to the public and of course also unknown to Meralco. I will be willing to enter into net metering agreement with Meralco if there is clear scheme that’s been approved by the government (i.e. ERC or DOE or DTI) as stipulated by Section 10 of RA 9513.For immediate action, it is but imperative that the net metering provision of the law should be implemented to encourage small grid tie connections. Grid tie solar power will result in a distributed power generation for direct end users and enabling the system owners to export their excess power to the grid. The system owners can be compensated either by energy credits or paid by an agreed price based on the volume of their exported power. After all the Renewable Portfolio Standards (RPS, in short their energy mix) value of utility providers (i.e. by Meralco) will increase by accepting into the grid the excess power produce from household solar panels.

Since Solar panels are yet to be sold at an acceptable level to middle class families, households with Solar Panels either grid-tie or off grids, should be given incentives like 5 year suspension of realty tax, access to credits for procurement of panels from US or China and rebates for balance of system procured locally like breakers, cables, and mounting brackets.

It is only the backward thinking, lack of ingenuity and neglect of the government people that discourage the full implementation of the law for the benefit of the suffering Filipinos. And to add insult to injury, the democratization of power generation is left into big business interest who after all are behind those power projects that promote fossil (coal, bunker and diesel) fuel use.

Govt rejects Subic coal plant transfer

Posted June 25th, 2012 by Alena Mae S. Flores

Manila Standard Today

The Energy Department has rejected proposals to relocate the 600-megawatt coal-fired power plant of Redondo Peninsula Energy Inc. to the site of mothballed Bataan nuclear power plant in Morong, Bataan due to lack of “logistical capability.”

Energy Secretary Jose Rene Almendras said the Bataan nuclear plant site was not conducive for a coal-fired power facility, which was supposed to be built at Subic Bay Freeport.

Almendras also said transferring the coal power project to Bataan from Subic Bay would push back its scheduled operation by 2015 and threaten Luzon’s power situation.

“If it will be placed there [Bataan], you will not meet the deadline. You have to dismantle some of the facilities. Remember, we had a team of experts who looked at BNPP to convert it to a coal-fired power plant. They said it was not feasible to coal-fired, and it was very expensive to convert it to a natural gas-fired power plant,” Almendras said.

“If you’re going to use that site for coal, you have to clear some areas and retrofit it,” he added.

RP Energy plans to build a 600-MW coal project at the Subic Bay Freeport but the Subic Bay Metropolitan Authority asked the government to relocate the plant to another site such as Bataan. Concerned sectors in Subic have strongly opposed the project, citing health, tourism and other concerns.

RP Energy led by Meralco PowerGen Corp., a subsidiary of distributor Manila Electric Co., is the controlling shareholder of RP Energy.  Meralco PowerGen holds 50 percent plus two shares in RP Energy while Aboitiz-controlled Therma Power Inc. and Taiwan Cogeneration International Corp. hold the remaining shares in equal proportion.

The energy chief said the unloading facility of Bataan nuclear power plant had no design for a port, which is crucial to a power plant because imported coal is delivered and unloaded at the port.

“The problem with coal, you need to be an area where you can unload the coal in huge quantities because a 600-MW coal-fired power plant will consume a lot. The problem with BNPP was the site is not the best site for a coal- fired power plant because it does not have logistical capability to handle the fuel itself,” he said.

Almendras said there were no concrete plans for the nuclear plant yet.  The Aquino government earlier announced it had no plans of reviving the plant which was shut down by former President Corazon Aquino in 1986 due to safety issues.

The $2.3-billion nuclear plant was already completed when it was shut down.

Solar Bracing For FIT Reduction

Solar Bracing For FIT Reduction

By MYRNA M. VELASCO

MANILA, Philippines --- The feed-in-tariff (FIT) for solar technology to be approved by the Energy Regulatory Commission (ERC) will likely be lower than what was applied for by the National Renewable Energy Board (NREB), sources from the industry have tipped off.

Nevertheless, the industry regulator is reportedly setting in place a “cost-balancing scheme” for solar developers via the net metering program so investors would still be enticed to cough up capital despite a lower-than-expected FIT.

In the net metering scheme, solar developers would be able to sell their surplus generation vis-à-vis the capacity that they will be allotting for their own use.

The FIT ruling for various RE technologies is expected to be out this July. The rules on net metering as well as the revision on the FIT Rules are also anticipated to be issued soon. ERC executive director Francis Saturnino Juan has explained that the July timeline for the issuance of the FIT ruling “is ours. The hearings were finished April. The 90-day period to evaluate ends sometime July.”

Of all the calculations made on various technologies, it was deemed that the P10.37 per kWh for wind; and those on hydro at P6.15 per kWh as well as biomass at P7.00 per kWh are better aligned with the imposed tariffs of other countries.

“Solar developers are re-assessing the economics if the FIT will be reduced. They’re looking at the viability of P12 per kWh or lower … at that rate, it might still be difficult for them,” a source from NREB has pointed out.

It must be noted that the proposed starting FIT of P17.95 per kWh had drawn intense opposition from Joint Congressional Power Commission co-chair Senator Sergio Osmena III, as he intimated that he is only amenable to a FIT of P10 to P12 per kWh.

Solar developers later on manifested that they can compromise for a reduced FIT of P15.22 per kWh, with allowance for 10-percent reduction if solar prices will continue to skid.

Given the continuous slide in solar photovoltaic (PV) prices in the past months, however, regulators are still cautioned on their approval of the FIT rate for the technology.

Investments in RE projects already faced delays so it remains to be seen if the country would still be able to corner its share of capital in this area.

Philippines "Way ahead" of Green-Energy Target

PAUL ANTHONY A. ISLA / REPORTER

MONDAY, 25 JUNE 2012

The Department of Energy (DOE) said renewable energy-based power plants remain a bigger priority than coal-fired power plants.

According to the department, it has awarded 304 renewable-energy (RE) contracts that will put in place 7,843.65 megawatts (MW) of renewable energy-based capacity.

In terms of capacity, the DOE said it has awarded more than the coal-fired generating capacity it has endorsed totaling 1,935 MW as of end-June 2012.

“There are very few countries in the world that can stand up and say that 58.2 percent of their power are green. As a matter of fact, the United Nations Industrial Development Organization [Unido] has set a target of 30-percent renewable by 2030. And clearly, the Philippines is way ahead of this target,” Energy Secretary Jose Rene Almendras said in a statement on Monday.

He added that the share of green energy in power generation now stands at 58.2 percent in 2011 from 55.1 percent in 2010.

Almendras said the share of RE generating capacity also increased to 28.4 percent in 2011 from 26.3 percent in 2010. “These numbers show that from 2010 to 2011, we have been increasing our green generation capacities,” he added.

The energy chief said due to renewed confidence in the Aquino administration, as clearly evidenced by economic indicators, electricity consumption is growing faster than it has been for the past 10 years.

He added that Manila Electric Co. (Meralco), for instance, announced that its year-on-year growth is at 10 percent and leading the increase is the industrial sector growth at 13.4 percent.

Almendras said the projected double-digit growth in electricity consumption has not been seen in years where the 10-year average growth only stood at 4.3 percent.

“All of these indicate that we must increase base-load generation to meet the increased consumption of electricity so as not to stifle economic growth. Then, there is the other challenge of keeping electricity rates low, therefore we must increase generation capacity using the lowest cost technologies to meet the short- to medium-term needs,” he added.

Almendras said more sustainable options will be more economically viable due to technology advancements, and this is precisely why the DOE sees more RE and green options taking the lead by 2017 and beyond.

“But we are not restraining the growth of green and renewable generation. We just need to consider when these capacities will be available. While waiting for them to be available, we must explore other technologies,” he added.

***

I would not count large hydropower projects as green.

Why?

Because large hydropower projects destroys natural habitat of wildlife, it displaces communities, it buries forever the heritage, the lands, the memories of large area and it's people.

If run-of-river hydropower then yes its Green and sustainable... if large projects NO... its never green if its artificial.


visit our website: www.eastgreenfields.com

DOE debunks bias for coal power

THE Department of Energy (DOE) on Monday refuted allegations that it had a bias for coal-generated power, adding that it awarded 304 Renewable Energy (RE) contracts that will put in place 7,843.65 megawatts (MW) in power generation capacity.

This is significantly a lot more than the coal-fired power plants’ generating capacity totaling 1,935 MW as of end-June 2012.

Energy Secretary Jose Rene Almendras said that, “There are very few countries in the world that can stand up and say that 58.2 percent of their power is green. As a matter of fact, the UNIDO [United Nations Industrial Development Organization] has set a target of 30 percent renewable by 2030. And clearly, the Philippines is way ahead of this target.”

In addition, the share of green energy in power generation in the Philippines now stands at 58.2 percent in 2011 from the previous 2010 level of 55.1 percent.

Similarly, the share of RE-generating capacity has also increased from 26.3 percent in 2010 to 28.4 percent in 2011. These numbers show that from 2010 to 2011, the Philippines had been increasing its green generation capacities, the DOE stated.

Almendras also explained that because of the renewed confidence in the Aquino administration, as clearly evidenced by recent economic numbers, electricity consumption is growing faster than it has in the past ten years.

Also, the DOE noted that the Manila Electric Co. announced that their year-on-year growth is now at 10 percent, and leading the increase is the industrial sector growing by 13.4 percent. This double-digit growth in electricity consumption has not been seen in years, where the 10-year average growth only stood at 4.3 percent.

“All of these indicate that we must increase baseload generation to meet the increased consumption of electricity so as not to stifle economic growth. Then there is the other challenge of keeping electricity rates low, therefore we must increase generation capacity using the lowest cost technologies to meet the short to medium term needs,” Almendras said.

“Subsequently we believe that more sustainable options will be more economically viable due to technology advancements and it is precisely why the DOE sees more RE and green options taking the lead by 2017 and beyond,” he added.

Written by : RAADEE S. SAUSA

For: Manila Times.net

Published: June 26, 2012

Solar Power FAQ

What is PV generation system?    PV generation stands for Photovoltaic generation system. Photovoltaics (PV) is a method of generating electrical power by converting solar radiation into direct current electricity (wikipedia). What is the difference between off grid and grid tie systems?    Off grid is for total independence, it needs banks of batteries to run the system during night time. Grid tie system needs utility connection to run the system thus the residence or the building can be energize by the utility provider, instead of batteries it uses the utility grid as one giant battery (wikipedia: net metering). Grid connected system is more economical to install in the cities or in areas where utility is available 24 hours.  Go to Document center, view or download Diagrams to learn more. Is it legal to have grid connected PV generation system in the Philippines?    Absolutely! Thru the Republic Act 9513 or Renewable Energy Act of 2008 the government encourages the utilization of renewable energy sources. Section 10 of the Act stipulates net metering schemes between end user and utility provider (e.g. Meralco or Provincial Elect Coops).  What is net metering?    Net metering refers to a system, appropriate for distributed generation (i.e. PV generation system or small wind turbine system), in which a distribution grid user has a two-way connection to the grid and is only charged for his net electricity consumption and is credited for any overall contribution to the electricity grid. (From IRR of RA 9513). Is there an installation reference for review or study or confirmation that the system works?    Of course we do have proof. Click here to learn more of our Solen 1 Project. What does EastGreenfields offers?    EastGreenfields is a start-up family owned company that can provide grid connected PV generations solutions. Our grid connected system is mainly composed of products that are UL listed and California Energy Commission approved for grid connection. Our system is adaptable to Philippine Distribution Code (220 V, 60 Hz). Our product line is not limited to grid tie systems, we also also offer off grid systems, and solar panel modules of low capacity rating.  Visit us to lear more: www.eastgreenfields.com.

EastGreenfields Opening Soon

EastGreenfields is a solar power solutions provider aimed to provide clean energy choice for every Filipino.


We are a company with the technological know how to provide affordable and safe Renewable Energy systems and equipments to meet the demands of power shortage and climatic challenges.


Not only we will count the pesos in energy bill savings, but most of all we will count the equivalent number of trees saved by clean energy offset.


We aim to provide every Filipino family and small business owners the latest technology in Solar Power equipments. In this pursuit, we will only provide technologies and equipment that are internationally accepted brands, equipments that have passed UL and other international standard testing methods and manufacturing process.


Join us in this journey.