Understanding electricity bill

What goes into your electricity bill?
By Riza T. Olchondra
Philippine Daily Inquirer
Monday, July 22nd, 2013

MANILA, Philippines—With the recent hike in Meralco’s rate, consumers are now asking just what it is that goes into their electricity bills, and how power rates are set. 

The biggest factor—all 58.2 percent of it—is the generation charge or cost of electricity sold by power producers, which distributor Manila Electric Co. (Meralco) said grew by P0.19 per kwh to P5.66 per kWh for June 2013 compared with the previous month. 

Still, this is 48 centavos lower than the generation charge in June 2012. 

Transmission charges, which take up 10.1 percent, went up by P0.02 per kwh on higher service charges incurred by the National Grid Corp. of the Philippines from generators. Taxes, which take up another 10.1 percent, increased by P1.50 per kwh. System losses take up about 5.4 percent of the total charges and the rest, or 16.2 percent, go to Meralco. 

Meralco assistant vice president and head of utility economics Lawrence S. Fernandez says in a recent media orientation that all the elements affecting monthly charges are reflected on the itemized part of a consumer’s electricity bill. 

Fernandez admits it is very hard to explain why there are system losses, which result from energy facilities turning out slightly less output compared to how much input, namely fuel, is used. 

“In every system, in every country, there are system losses. What we can do about it is reduce the system losses as much as possible. We have to understand, however, that investing in efficiency comes with costs, too, for us and for the consumer. We try to balance these factors,” Fernandez says. 

The government has, in fact, set in R.A. 7832 how much can be charged for system loss in order to encourage energy efficiency, and such levels get more strict over time, Fernandez says. 

“In the past 10 years before 2008, there were a lot of system losses. There was a P10 billion equivalent of out-of-pocket for the 10 years that Meralco was above cap for system loss. Thankfully our system losses have come down. The customer benefits because, by law, we have to reflect the system loss charge based on the cap or the actual figure, whichever is lower for the customer,” Fernandez says. 

From 2008 to 2012, savings to consumers due to lower systems losses have reached P8.7 billion, he points out. 

And just how does Meralco charges fare with those of power distributors in other countries? Responding to the Joint Foreign Chambers of Commerce allegation in October 2010 that the Philippines had the highest residential electricity rates among seven Asia countries covered, and the second highest in industrial rates among eight countries, Meralco asked the study’s source, Perth-based International Energy Consultants (IEC), to unbundle the components of each country’s electricity charges and compare them using a common time frame. 

The result: A 2012 study by the same consultancy firm showed the Philippines ranked ninth of 44 countries surveyed (regionally, No. 2 in Asia after Japan) and had “the most unbundled” or itemized rates (as reflected in the monthly bill) in the world. 

The same report showed that Meralco’s tariffs reflect the true cost of power in the country. This, IEC says, “is sound economic policy in a high-growth market such as the Luzon grid.” 

While Meralco’s tariffs are higher than those of Taiwan, South Korea, Thailand, Malaysia and Indonesia, the study says this was because of government subsidies for customers and/or utilities in these markets. 

Tariffs in those countries “remain well below the cost of supply.” Indonesia, for example, provides fuel subsidies to the local utility. 

Others allow deferred capital expenditures, financing operations through debt, and/or direct cash infusions into the utility from the government. 

This, IEC says, is unsustainable since the government and/or the utility firms cannot indefinitely incur losses and customers in such subsidized markets are likely to suffer extreme price shocks when the subsidies are removed. 

But Fernandez believes Meralco can still improve tariffs. 

Meralco is working on this, he says, by securing new competitively priced power supply agreements up to 2019, supporting power capacity buildup and the use of fuel efficient systems, seeking more cost competitive fuel sources (coal, natural gas, and LNG), working with industry for synchronized maintenance turnarounds of generation facilities, and advocating time of use (peak and off-peak) rates for high load customers. 

Meralco has also set flat distribution charges until 2015 (although this takes up just 16.2 percent of total monthly charges) and invested in further system improvements, among other steps, Fernandez says.

***

EastGreenfields additional note

And with Renewable Energy sources goes online some time in 2014, another item will be added into each electricity bill. This will be the FITALL or FIT Allowance.

Jobs in Renewable Energy

http://opinion.inquirer.net/55533/jobs-from-renewable-energy

20-MW solar power project in Ilocos Norte

Energy approves 20-MW solar power project in Ilocos Norte\
Manila Standard Online edition
By Alena Mae S. Flores | Posted on Jul. 17, 2013 at 12:01am

The Energy Department has issued a certificate of commerciality to the 20-megawatt solar power project of Mirae Asia Energy Corp. of Korea in Ilocos Norte province.

The certificate allowed Mirae Asia to proceed with the construction of the solar project in the village of Paguludan in Currimao town and entitled it to avail of the feed-in tariff rate of P9.68 per kilowatt-hour.

Mirae Asia vice president Lito Badua told reporters the Energy Department issued the certificate of commerciality for the P2.4-billion project and that the company would now process the remaining permits for the construction.

“We are looking at starting construction around fourth quarter,” he said.

This is the third solar project in the Philippines given the certificate of commerciality. The other solar projects are the 30-MW solar farm of Philippine Solar Farm-Leyte in Ormoc and the 30-MW project of ATN Philippines Solar Energy Group in Rodriguez, Rizal.

Badua said Mirae Asia aimed to construct the project in nine to 12 months and start full commercial operations in the late part of 2014.

“This is in response to the call of government to put up renewable and indigenous sources of energy,” Badua said.

The solar project will cover 60 hectares.  Mirae Asia has an existing but smaller solar project in Korea.

“Funding will be equity and loans from local and foreign banks,” Badua said.

Mirae Asia said in a recent presentation it concluded the topographic and geotechnical study of the plant site in Currimao.

Micro Grid Tie Installation in a 250 kW-hr requirement

Study Project: 470 watts system installation

Average energy consumption per month: 250 kW-hr

Average Meralco bill per month: Php2,680

Meralco rate: Php10.72 per kWh

Insolation Data (Average Metro Manila)

  

  

Summary

Investment ROI

Cost of Project
470 watts installed capacity, PV modules and Inverter (system generator) cost only.
Balance of System cost not accounted. Based on July 2013 Meralco rates.

System Generator Capital cost: Php 100,000.00

Annual Savings: Php 6,629.37

ROI: 15 years

Disclaimer
This is just indicative price for the cost of the generator modules only. Not to be used for detail cost analysis of the project.

Email us for details: inquiry@eastgreenfields.com

July 2013 MERALCO rate

July 2013 Meralco rate

The July generation cost for Meralco rate is peg at Php5.3269 per kW-hr across all consumption level (50-5000 kW-hr)

Graph 1:  2011 to 2013 the cost for 300 kW-hr for the month of July

Graph 2: Annual electricity rate as of July for all level (50-5000 kW-hr)

Graph 3: Monthly electricity rate for 300 kW-hr level from January to July 

source: Meralco website

http://www.meralco.com.ph/customer/page-cusCare-billRates.html#

Philippine challenges in renewable energy implementation

Challenges in renewable energy development cited

By Claire-Ann Marie C. Feliciano, Reporter

BusinessWorld Online

June 25, 2013

ONE hundred thirty-eight countries, including the Philippines, have set renewable energy (RE) targets, but challenges in developing the resources remain, according to a new study by environmentalist groups.

In the report, "Meeting Renewable Energy Targets: Global Lessons from the road to implementation", the World Wide Fund for Nature (WWF) and the World Resources Institute (WRI) noted that challenges to upscale the implementation of RE projects must be immediately addressed to reach the global goal of 100% power from RE by 2050.

 The study showed that power harnessed from RE technologies -- specifically sun, water, wind, thermal vents and biomass -- currently supplies only 16.7% of the world’s power.

 The study highlighted the challenges in a bid to explain the factors critical to reach the national RE targets of seven specific countries: the Philippines, China, India, Germany, Morocco, South Africa and Spain.

 Samantha Smith, WWF Global Climate and Energy Initiative leader, said that setting targets is not enough, even though it represents a clear commitment to RE.

 "The real job is to create an enabling environment, including financing, assured access for the poor, infrastructure and capacity-building. This is what will ensure these targets are achieved," she said in a statement yesterday.

PHILIPPINES

 The report recognized that the Philippines’ energy mix already includes a high RE capacity, with data from the Energy department showing that RE already contributes about 40.6% of the country’s primary energy mix, as of 2011.

 In order to push forward the development of RE, the country has laid down a long-term energy plan which aims to increase the RE capacity to 15,304 megawatts (MW) by 2030.

 Hydropower is expected to account for 8,724 MW; geothermal, 3,461 MW; and wind, 2,378 MW. This would signify a total increase in renewable energy capacity by 9, 865.3 MW.

 However, despite significant support from government officials in meeting the targets, external opposition has set back the development of RE.

 "Opposition to feed-in tariff (FIT) rates came from various stakeholder groups, including project developers who wanted higher prices and consumer organizations that represent the interest of lifeline consumers," the report read.

 It also cited weak capacity in the Energy Regulatory Commission (ERC), leading to delayed RE mechanisms processing, which in turn "has caused investor uncertainty." This, according to the report, led to the loss of $2.5 billion in potential RE investments.

 The government has been pushing for various non-fiscal mechanisms to fast track the development of RE resources, including net metering, FIT, renewable portfolio standards, green energy option and renewable energy market.

 However, only the FIT has been finalized.

 The ERC approved in July 2012 FIT for run-of-river hydro (P5.90/kWh), biomass (P6.63/kWh), wind (P8.53), and solar (P9.68/kWh) RE projects.

 The FIT, which will be divided among consumers as a FIT allowance, will be paid to the RE developers over a period of 20 years.

 "The delay has caused frustration among industry stakeholders, who saw the anticipated development of renewable energy projects stalled due to lack of clarity in policies or slow action on these crucial rules," the report read.

 These delays in policy decisions, the report noted, was caused by disagreements between the government and various influential groups.

 "Opposition is mostly based on the argument that a feed-in tariff, to be called the FIT allowance, will result in additional charges, which will be collected from all electricity consumers..."

 The joint study by WWF and WRI said that the country’s experience with RE development serves as a good example of the importance of political will and overall mobilization of stakeholders.

 It said that despite the presence of the Renewable Energy Act of 2008 -- which sets the policy framework for the development of the RE sector -- many rules pertaining to the policy mechanisms have been delayed due to resistance from many stakeholders.

 The report called on the mobilization of the stakeholders -- government, private and public sectors -- through engagement and public participation.

 "Furthermore, coordinating decision-making and project planning processes, and ensuring the technical and human capacity exists by involving beneficiaries in the development stages, operation and maintenance of projects, will help strengthen the sector," it added.

 At a briefing held at Oakwood Premier in Pasig City, WWF Global Energy Policy Director Stephan Singer said, "If addressed appropriately and consistently, these barriers can become opportunities for creating fundamental and solid conditions for successful RE implementation."

 Meanwhile, WRI International Financial Flows and Environment Project Manager Athena Ballesteros emphasized the need for good governance to meet RE targets.

 "This report’s case studies show how successful RE implementation needs far more than financing and technology; it needs good governance," she said.

 "With RE investments expected to spike in the coming decades, it makes sense to maximize our natural assets," added Rafael Senga, WWF International Asia Pacific Energy policy manager.

 "In the 1970s, the Philippines had the foresight to invest in indigenous geothermal power. We must again retrace that path and invest in one of the country’s few competitive advantageous -- our vast renewable energy resources. And we need to do it now," Mr. Senga said.

***

Note by EastGreenfields Enterprises blog admin.

Net Metering at the time of this posting has been approved by ERC.

Solar firm gets green light for plant

Solar firm gets green light for plant

Business World Online

Posted on July 08, 2013 11:58:23 PM

ATN Philippines Solar Energy Group, Inc. has been given the green light to proceed with construction of its planned 30-megawatt (MW) solar power plant in Rizal after the Energy department declared the venture as commercially feasible.

  “We issued a certificate confirming the declaration of commerciality to another 30-MW solar project,” Mario C. Marasigan, the department’s director for Renewable Energy Management Bureau, said in a text message yesterday.

Mr. Marasigan identified the company as ATN Philippines Solar Energy Group, Inc., adding that it is the second firm to have received such confirmation from the department for a solar project.

ATN Philippines will build the 30-MW solar power plant in the municipality of Rodriguez in Rizal.

“They can now proceed with the construction of their project. Project operation is eyed in January 2016 with project cost of $70 million,” Mr. Marasigan said.

Mr. Marasigan added that the department is currently evaluating five more applications for declaration of commerciality of solar power projects.

The department, he added, also “completed evaluations and will soon confirm” the application of Mirae Asia Energy Corp.

Mirae Asia is the proponent of a 20-MW solar power plant in Currimao in Ilocos Norte. The company had said in April that the project will cost about P2.4 billion

The Energy department has issued similar certificates to five other companies, entailing “declaration of commerciality” of four wind projects and one solar project.

For wind, these are: Energy Development Corp. for its 87-MW project in Burgos, Ilocos Norte; Alternergy Wind One Corp. for its 67.5-MW project in Pililla, Rizal; Trans-Asia Oil and Energy Development Corp. for its 54-MW project in Guimaras Island; and PetroEnergy Resources Corp. for its 50-MW project in Nabas, Aklan.

The solar venture involves Philippine Solar Farm-Leyte, Inc. which is undertaking a 30-MW project in Ormoc, Leyte. -- Claire-Anne Marie C. Feliciano  

Philippines Net Metering rules finally approved

Philippine Net Metering rules finally approved after 5 years of waiting.

We in EastGreenfields Enterprise had been anxiously waiting for the approval of the Net Metering Implementation Rules and Regulations from Energy Regulatory Commission.

The net metering is important to us since this will enable our customers to export their excess solar derived electricity into the grid and therefore earn credits.

The net metering is the most important aspect of the Renewable Energy Act of 2008 (RA9513).  Net Metering enables the consumers to become generators themselves and contribute to the overall grid electricity supply.

We in EastGreenfields Enterprise is in the best position and with expertise in designing micro grid tied solar power generation system for residential and small building applications. Our system is scalable, we don’t have minimum limit we can provide as small as single module system and we can design up to multiple array system for your needs.

We can give you simulation studies and give consultation advice as long as it is intended for small scale distributed generation system.

Indeed, Sun without People is just sun.

Email us: inquiry@eastgreenfields.com

ERC issues net metering rules

ERC issues net metering rules

Manila Bulletin

By Myrna M. Velasco

Published: July 8, 2013

End-users intending to generate their own power supply and sell their excess to distribution utilities (DUs) can now plan ahead, following the issuance of the net metering rules by the Energy Regulatory Commission (ERC).

In other jurisdictions, net metering has just primarily targeted solar power generation, but the Philippine energy sector opted to expand the coverage to also include other renewable energy (RE) systems such as wind and biomass, among others.

The ERC emphasized that while a specific pricing methodology for net metering is still being sorted out, the interim policy will be for “the customers’ export energy (to be) priced based on its DUs’ blended generation cost.”

Based on the assessment of ERC chairperson Zenaida G. Cruz-Ducut, “the net metering program will definitely change the electricity landscape.”

She explained that “from just being recipients of electricity, users may also now become generators, supplying not only their electricity requirements but also that of others through their distribution utilities’ system.”

The net metering rules, the ERC said, will “allow electricity end-users who are updated in the payment of their electric bills to their distribution utility to engage in distributed generation.”

The rules prescription will be for end-users to strive putting up embedded RE systems not exceeding 100 kilowatts, and any surplus from their own consumption, can be sold to their servicing DUs.

Ducut added that the target will be for electricity consumers to appreciate savings that they can gain from participating into the net metering program; and “get paid a reasonable price for their RE generation that they cannot anymore consume.”

To enable that, the end-user will have to maintain a two-way connection to its distribution utility. The two meters will measure separately the export and import of electricity by the end-user to and from its servicing DU.

The rules similarly prescribed the standards “which shall be complied with and observed by the net metering customer to address engineering, electric system reliability and safety concerns for net metering interconnections.”

These shall also cover concerns on voltage level, frequency and power quality as well as those relating to system protection.  source

Philippines largest solar plant

Construction of Philippines largest solar plant set in Sept.

By Bong S. Sarmiento

Saturday, June 29, 2013

KORONADAL CITY -- Construction of the largest solar power plant in the country worth at least P1 billion is scheduled to start in September and expected to go on stream by January 2014, an official said on Friday.

The renewable energy project will be located in a 20-hectare property in Surallah town in South Cotabato, said lawyer Antonio Bendita, the incoming town mayor.

"This will be a big boost to our town through the employment and revenue that the project will generate," he said in a radio interview.

Bendita said the solar power facility will rise along the road in Barangay Tubi-allah, adding they expect it to become an ecotourism attraction of the locality.

The facility will produce power for the South Cotabato I Electric Cooperative Inc. (Socoteco I), he said. The supply contract has been signed last Wednesday between Socoteco I and NV Vogt Philippines Solar Energy One Inc., Bendita added.

At five megawatts (MW), it would be the biggest photovoltaic (PV) power project in the country once completed, surpassing the one MW solar facility in Cagayan de Oro City.

Socoteco I, which serves this city, the seat of government of Soccsksargen (Region 12), eight other towns in South Cotabato, and Lutayan in Sultan Kudarat, has a daily peak power demand of 32 MW.

Santiago Tudio, Socoteco I general manager, said their contract with the National Power Corp. (Napocor) is ending this August, and the cooperative has been looking for suppliers as the state-owned power company reportedly indicated it would no longer renew its 20-MW allocation to the cooperative.

Napocor operates the Agus and Pulangi hydropower plants, which supply half of Mindanao's power needs.

Tudio said earlier that they are working for the acquisition of diesel-fired modular generator sets that could produce 15 MW to offset the projected supply shortfall with the end of the three-year contract with Napocor in August.

Napocor started reducing its allocation to electric cooperatives in Mindanao last year due to the declining capacity of its hydropower plants in Bukidnon and Lanao del Norte.

Daily rotating brownout lasting up to eight hours hit some parts of the island months ago and the interruptions are expected to be back in August to December due to the scheduled preventive maintenance shutdowns of power plants.

As alternative solution to the Mindanao problem, the Department of Energy has offered a loan scheme that will allow electric cooperatives in Mindanao to acquire their own modular generator sets.

Under the scheme, which will be coursed through National Electrification Administration, Energy Secretary Carlos Jericho Petilla said electric cooperatives will be given a grace period of two years wherein they will only be required to pay for the loan's interest.

After two years, he said the cooperatives will have an option to pay for the loan principal and interest or completely waive any further payment by returning the generator sets to NEA.  Source

BDO helps fund $130-M power project

BDO helps fund $130-M power project

 

Published on Sunday, 30 June 2013 18:47 

Written by Paul Anthony A. Isla

Business Mirror

ALTERNERGY Wind One Corp. said on Friday that BDO Capital & Investment Corp. (BDO Capital) led a syndicate of banks extending $130 million for the 67.5-megawatt (MW) wind-farm power project in Pililla, Rizal province.

Alternergy, which focuses on tapping renewable energy, is the joint venture between Alternergy Viento Partners Corp., founded by former Energy Secretary Vincent Perez, and Korea East West Power, a subsidiary of Korea Electric Power Co. (Kepco).

The company said the $130-million financing is the first all—Filipino commercial bank syndicated term-loan facility for a wind-power project in the country.

It said the 67.5-MW Pililla wind-farm project is the first renewable-power project that has received full project finance based on the feed-in-tariff (FIT) regime under the Renewable Energy Act of 2008.

An FIT is a cost-based compensation mechanism assuring certainty of price and designed to encourage renewable-energy producers to invest for the long haul.

Eduardo V. Francisco, BDO Capital president, said the fund extended to the project is a testament to the domestic banking industry’s growing awareness and confidence in helping the private sector develop power-generation projects that harness renewable energy.

He said the syndication of four all-Filipino commercial banks demonstrates the technical and commercial viability of renewable-power projects in the country, specifically for large-scale wind projects.

BDO Unibank Inc. leads the project lenders for the Pililla wind- farm project, together with the Philippine National Bank, Rizal Commercial Banking Corp. and China Banking Corp. BDO Capital is the lead arranger and sole book runner.

The syndicated loan facility has a term of 12.5 years and is available in both Philippine pesos and US dollars.

The Pililla wind-farm project will involve the construction and installation of 27 wind turbines along the ridge of the mountainous Rizal province. Based on the Wind Atlas of the Philippines produced by the National Renewable Energy Laboratory of the United States, the Pililla wind site has a promising wind-resource potential.

Alternergy verified and confirmed the potential after more than three years of wind-resource assessment by GL Garrad Hassan, the world’s leading wind-consultancy firm. The Asian Development Bank partly financed the feasibility study under a technical-assistance facility.

The Pililla wind-farm project received the Confirmation of Commerciality from the Department of Energy (DOE) on May 17. Under the renewable-energy law, the first batch of wind-power projects will receive an P8.53 per kilowatt-hour FIT rate for the next 20 years.

The Pililla wind-farm project is expected to be ready for commissioning by late 2014.

The groundbreaking ceremony of the Pililla wind-farm project was held on June 18, led by Energy Secretary Carlos Jericho L. Petilla.

PH warned of losing $2.5B in potential renewable energy investments

PH warned of losing $2.5B in potential renewable energy investments

By Matikas Santos

INQUIRER.net

3:26 pm | Tuesday, June 25th, 2013

MANILA, Philippines – The Philippines risks losing “over $2.5 billion in potential renewable energy investments” due to delays in the crafting of rules and mechanisms that were causing investor uncertainty, a 2013 World Wide Fund for Nature (WWF) report said.

“In 2011, at least 384 renewable energy service contracts were awaiting approval from the Department of Energy (DOE), equaling to 6,046MW of generation capacity,” according to the 2013 WWF report titled “Meeting Renewable Energy Targets: Global lessons from the road to implementation.”

“While the feed-in tariffs has been approved, unfortunately, many of these projects are still in limbo pending the approval of other renewable energy mechanisms…because of administrative bottlenecks,” it said.

The Philippines passed the Renewable Energy Act of 2008 five years ago which puts in place mechanisms that will help the development of the renewable energy sector. Among those, only one, the feed-in tariff has been passed last July 2012. “The delay has caused frustration among industry stakeholders, who saw the anticipated development of renewable energy projects stalled due to lack of clarity in policies or slow action on these crucial rules,” the report said.

“The delay on policy action has put thousands of megawatts of potential renewable energy projects at a standstill and put the country at risk to losing over $2.5 billion in potential renewable energy investments,” it said.

The report also cited the country’s high electricity rates saying it has the second highest rates in Asia and the fourth highest in the world “partly attributed to high costs related to importing fossil fuels.” “While one of the main strengths of the renewable energy framework is that the policy mechanisms are legislated under the Renewable Energy Act, 2008, many of the details and rules pertaining to these mechanisms have been delayed and un-clarified since the law’s inception,” it said.

“These delays have been caused by resistance from many stakeholders- governmental, private, and utilities, among others- which has been the primary challenge in renewable energy development for the country,” the report said. The report also cited the country’s already high mix of renewable energy from geothermal, biomass, and hydro energy.

“As far as renewable energy sources, the Department of Energy reported that 40.6 percent of the primary energy mix was contributed by renewable energy sources in 2011, primarily composed of geothermal at 21.7 percent, followed by biomass at 12.4 percent and hydro at 6 percent,” the report said.

Though the DOE aims to triple the country’s renewable energy capacity by 2030 there were still many setbacks that continue to slow the development of the sector. “Delays in policy decisions have mostly been affected by disagreements within governments and the opposition of various influential groups, such as Electric cooperatives, Freedom from Debt Coalition, Foundation for Economic Freedom, Consumers’ Associations and the Department of Trade and Industry (DTI),” the report said. “Opposition is mostly based on the argument that a feed-in tariff, to be called the FIT-allowance, will result in additional charges, which will be collected from all electricity consumers,” it added.

The report concluded that the country needs to engage more with all the stakeholders as well as to improve coordination in the decision-making and project planning process.

“Primarily, the challenges that lie ahead in the Philippines for renewable energy deployment and achievement if its national targets will be to properly mobilize all stakeholders involved in the sector through engagement and public participation,” the report said.

“Furthermore, coordinating decision-making and project planning processes, and ensuring the technical and human capacity exist by involving beneficiaries in the development stages, operation and maintenance of projects will help strengthen the sector,” it said. source