2012/07/08

Wrong energy choices


EastGreenfields agree with the author below.

Its because the cost of externalities of conventional power generation system (fossil-thermal, large hydro electric and Nuclear) cannot be easily quantified... the most glaring example of all is GLOBAL WARMING which has been proven to be caused majorly by carbon dioxide emission. 

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Wrong energy choices

Manila Standard Today
By Tony La Vina | Posted on July 07, 2012 | 12:01am 

Three means of electricity generation are often raised as solutions to our looming power crisis: fossil fuel-based (coal and oil most especially), large-scale hydroelectric (big dams), and nuclear power. 

While some look at them as saviors, I view them with apprehension, and not just from an environmental aspect. These options come with overlooked costs, that fossil fuels, big hydro, and nuclear power cannot truly live up to the promise of cheap and abundant energy—that cheap energy is itself an utopian illusion.

Relative availability of the resource, and the maturity of combustion and turbine technologies are the reasons why fossil fuel power generation is relatively cheap compared to emerging RE technologies. 

Coal and oil plants (and diesel generators for independent power producers) are financially easy to set up compared to other options, explaining their appeal as the go-to option for large-scale and rural electrification. Yet we know that this cheap attractiveness doesn’t reflect or take into account greenhouse gas emissions (and prospects for emission caps) and the supply and price of fossil fuels, costs that, in the long run, we will pay dearly for.

Arguably, we have arrived at that point. We need not mince words about volatile fuel prices, influenced by global supply and demand, politics in the Middle East, and so on, and now even coal supplies are facing the crunch. For example, in an op-ed, Pete Maniego of the National Renewable Energy Board and analyst Dennis Posadas noted that in June 2011, the approved rate for Panay Energy Development Corporation, which operates a coal plant, was P7.40/kwh, when coal was at $53/metric ton. By January 2012 coal became twice as expensive, at $116/ton. Electricity costs in Iloilo in fact rose to as high as P8.30/kwh in March, before increased power consumption and reduction in rates and taxes lowered charges to P7.95—a reduction some fear is only temporary considering its bases.

All this is on top of the health effects of coal and oil combustion (localized to the plant’s surroundings), greenhouse gas emissions, and the expense required to “clean up” coal oil-fired plants with pollution-mitigating technology. The last of these increases the costs of fossil fuel plants themselves, while the rest are costs absorbed instead by society and the environment: increased health expenditures (both in private and government budgets), climate change, and other downstream effects.

As for large hydroelectric dams, they may not emit greenhouse gases like fossil fuel plants, and are so efficient that their electricity is practically as cheap as coal, but they carry just as heavy a cost. Unlike fossil fuel plants, large dams involve an equally large investment of resources and time in their establishment. Further, their reservoirs, inundating lands upriver from the dam, displace both environmental and human habitats—and in the Philippines, that usually means sensitive ecologies, and marginalized indigenous peoples and/or communities who depend on the river and land for a living—all the more true in poverty-afflicted Mindanao, an island with vast hydro resources being eyed for power generation.

It’s too easy to rationalize their loss, the sacrifices made by these people as one made “for the good of the many,” or that they will be properly compensated. (And here, the questions must be asked: how much electricity do they use, on average? Are their chances of gainful employment and a decent income truly increased by the hydro project, or do these go to more qualified outsiders/migrants? Will these people gain more access to the social services powered by the dam?) In doing so, however, we are asking a vulnerable land and people to pay the price for the benefits of sufficient electricity and energy security. In developing countries like ours, too often this price is paid with little benefit or compensation to those who bear the cost. We should remember Macliing Dulag, a Cordillera leader, whose people opposed the Chico River Dam project during the Marcos regime. He paid with his life—which also claimed the dam was for the “good of the many.”

There are however smaller-scale hydro projects—micro and mini—which are not as disruptive or destructive as the Chico Dam could have been, which I am wholly in favor of, and which I will talk about in a succeeding column.

However attractive any electrification project may be, we must remember that the opportunity costs are not always measured in dollars and pesos, and are not always taken at the national level. National development is too precious an objective to lose, but so are environmental health and human security. We need economically affordable power, but we must expand our notion of what “affordable” means, incorporating the environmental and human dimensions as well as the economic.
Next Tuesday, I look at nuclear power and its risks, concluding that this too, like coal and big dams, is a wrong energy choice. 


http://manilastandardtoday.com/www2/2012/07/07/wrong-energy-choices/

2012/07/05

Meralco warns power rates will increase again in July


Another increase... another reason somebody step up and offer solution.

visit www.eastgreenfields.com we can offer solution.

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Meralco warns power rates will increase again in July
By Alena Mae S. Flores | Posted on July 05, 2012 | 12:10am

Consumers may have to brace for another round of electricity rate hike in July, as distributor Manila Electric Co. expects generation charges to go up following the tight supply in June.
“The direction is towards higher generation charges,” a source said.

There is normally a one-month lag time before the power generation cost is passed on to consumers by power distributors such as Meralco.

Meralco’s generation charge reached P6.1375 per kilowatt-hour in June, up by P0.54 per kWh from P5.5983 per kWh in May, owing to higher prices at the wholesale electricity spot market, which acts as trading floor of electricity.

The source said the generation charge was influenced by the tight power supply experienced in June, when cheaper coal plants were shut down for maintenance. Several units of the Sual and Calaca coal plants were offline in the first week of June.

The Malampaya gas pipeline also went offline on June 8 to 12, which affected the operations of 1,500-megawatt Sta. Rita and San Lorenzo power plants of First Gas Power Corp.

The two power plants had to use the more expensive liquid fuel, during the Malampaya gas pipeline shutdown.

“We experienced tight generation supply in June. This pushed up WESM prices,” the source said.
The source explained the spot market had no choice but to tap the more expensive oil-based plants, as ‘must-run’ units due to the unavailability of the coal and natural gas plants.

Electricity prices in the spot market had already doubled to P16.30 per kWh in May from P7.91 per kWh in April because of high demand during the summer season and the low output of coal-fired and hydroelectric power plants.

Electricity traded by WESM accounted for only 5.5 percent of Meralco’s power requirements in May but the distributor said the steep P8.39 per kWh increase in spot market charges caused a rise in the overall generation charge.

Meralco sources most of its power from its independent power producers as well as the power plants managed by state-owned National Power Corp.

The overall rate charged by Meralco IPPs also increased by P0.0139 per kWh in May from the previous month.


2012/07/04

The Sun and the Philippine Government Initiative


The Sun and the Philippine Government Renewable Energy Initiative

With a declared state policy of exploration, development and utilization of Renewable Energy resource, Renewable Energy Act of 2008 (RA 9513) was enacted.


The law aims to reduce the over reliance on imported fossil fuels for power generation and to mitigate the harmful emission of carbon dioxide.

There are two important provisions in the law that is most appropriate in the development of residential and small scale (Distributed Generation) set up.

Feed-in-Tariffs (Section 7 of RA 9513).

The Feed-in Tariff system as stipulated aims to accelerate the development of RE resources by giving incentives by institutionalization of special subsidies to developers to recuperate the capital investments.

FIT is vital to RE developers since this will make the deployment of RE technologies attractive. Although RE energy is acceptable to the public there is wide spread skepticism in the way subsidies will be incorporated into end users monthly payment since it will be the end users who will foot the bill for FITs.


Amidst the power price hikes and the immediate manifestation of environmental impact of global warming, there is a clamor for the full implementation of RA 9513, the first step is the implementation of FIT.

Update (Oct 12, 2012) : The ERC approved the FIT rates for Run-of-river hydro, Biomass, Wind and Solar. Approved Solar FIT rate is pegged at Php 9.68 per kW-hr.  Click here for approval by ERC.

Net-metering  (Section 10 of RA 9513)

Net-metering is most appropriate for small scale installation of less than 100 kW rated capacity. Net metering is a scheme or system in which end user with installed RE energy generator such as rooftop or ground mounted Solar Panel modules is credited with energy credits for the excess power generation exported into the grid.


The law mandates distribution utilities (e.g. Meralco) to enter without discrimination into net metering agreement with end users who has installed RE system.

Net metering is supposed to be the incentives for residential and small building owners to attract them into Renewable Energy utilization and generation at a small but wide scale level. With net metering small scale owners will not only be able to save their electricity bill since what they produce shall be used locally but will also earn credits for whatever excess energy they have exported to the grid. With net metering credits the payback period of investment is further accelerated.

Again four years after the law, net metering scheme is yet to be formulated.

Other Laws Pending

House Bill 5405 (HB 5405) or One Million Solar Roof Act of 2011

HB 5405 is a house bill filed by Ted Casino (Bayan Muna), co-sponsored by the Representatives of AnakPawis, Kabataan, Gabriela, and Act. The Bill aims to enact incentives and provide credit facilities for small solar power systems. The Bill should be deemed urgent by the government for implementation in the middle of the unstoppable price hike almost every month for various of reasons but mostly on the limited supply of fossil fuels (Coal, gas, bunker and diesel).


Senate Bill 2751 (SB 2751) or Solar Roof Acts of 2010

Sen. Miriam Defensor Santiago had filed a SB 2751 with the aim of providing competitive grants to LGU’s for rebates, loans and other incentives to individuals or entities for the purchase and installation of SOLAR ENERGY systems. The main goal of the Senate bill is that the Act promotes the installation of solar energy systems to ONE MILLION ROOFTOPS.

There is a sense of urgency each passing day to actively utilize renewable energy in particular SOLAR ENERGY.

SOLAR power systems are the most practical for distributed generation systems because they are compact and the solar energy is abundantly available within our geographical location.

It is an accepted fact that there is a cost for technology. The cost of technology should not hinder the public to accept and use it since a law (RA 9513) has been enacted already to accelerate the payback and mitigate the capital investment needed to start SOLAR power utilization.

As a follow-up, there are pending bills in the Lower House and the Senate that aims to accelerate the financial acceptability of SOLAR POWER systems making it more affordable by giving incentive and credits to ONE MILLION ROOF TOP owners.

Four years of inaction since the signing of the first and most agressive RENEWABLE LAW in South East Asia and yet... 

The Sun is out there... but the Philippine government is somewhere else...

2012/07/03

Our energy choices

By Tony La Vina | Posted on July 03, 2012
Manila Standard



This is the first of a series of columns on the energy choices of the Philippines. I write on this topic as the Philippines confront a power crisis, most evident in Mindanao, and looming for Visayas and Luzon as well. Unfortunately our recent history does not give comfort to citizens that the government will make the right energy choices; indeed, it has frequently worsened things in the long run. But clearly the country must implement a strategy of rectification, a reform agenda in energy. And that agenda must begin by urgently and fully implementing Republic Act No. 9513, the Renewable Energy (RE) Act of 2008.


The heart of the RE Act is its Feed-in Tariff (FiT) mechanism of promoting RE-based electricity. FiT assures the RE power producer of attractive fixed purchase prices (per kilowatt-hour), for a fixed number of years. Critics hit FiT precisely because of their fear that because some RE sources, such as solar, appear to cost more than traditional electricity generation from fossil fuel or hydroelectric dam sources, they will drive the average price of electricity up, an effect which would be frozen in place by fixed rates. But as I have written before, quoting extensively from RE visionary Ramon C. Abaya, who died earlier this year, this criticism of FiT as applied to solar is not correct.


In any case, critics see FiT as an enforced subsidy taken out of consumer pockets, while pointing out that the Philippines already has the highest electricity rates in the Southeast Asian region. Concerns about the economic impact of higher electricity prices should be taken seriously but applying its criticism to FiT is over-generalized. It makes us miss out on the finer details of the Philippine energy picture. Our traditional reliance on coal and oil-based electricity, lacking any indigenous fuel reserves, leaves us at the mercy of the world fossil fuel market and competition from other energy-hungry economies—not to mention the environmental impacts, which costs are not perfectly addressed by market prices. The country’s higher electrical rates are themselves a consequence of energy policy over the past two decades, and properly are the subject of energy policy and industry reform.


FiT, on the other hand, addresses objectives as equally important as lowering electrical rates (though it runs in parallel with that policy objective). One obvious objective is environmental: increasing the Philippines’ electrical generating capacity without increasing greenhouse gas emissions or otherwise destroying the environment. RE technologies, such as solar, wind, micro-hydroelectric generators, and biomass/biofuel, don’t depend on extracting, storing, and burning fossil fuels, and can safely be established on locales with highly sensitive ecologies (e.g., critical island ecosystems detached from the main electrical grid).


A second objective is localization and rural electrification. Because they do tend to generate less electricity than their traditional counterparts, RE technologies are best suited to filling gaps and shortfalls in the electrical grid, a non-polluting complement to large-scale electrical generation, and to provide power at individual (residential, commercial, industrial) and community levels. To date, this function is met by provincial-level independent power producers (IPPs) running diesel generators. A third objective, meanwhile, is ensuring an indigenous supply of power that, while dependent on the elements, is otherwise not dependent on the world market for fossil fuels.


Not mentioned is another approach to FiT, adopted in the more affluent West: private non-utility power generation. Governments provide incentives for homeowners (as opposed to IPPs) to provide for their own electricity using RE technologies—and an additional incentive to sell any excess generated electricity to the grid under FiT rates. While the average Filipino household certainly could not afford this approach, commercial and industrial centers, which can afford this, could set up their own turbines or solar panels under the same FiT terms as IPPs, lowering their demand on the public power grid and consequently making more power available for other users.


These three objectives are essentially tactical, short and medium-term. RA 9513’s ultimate objective is energy resiliency, or Philippine electricity’s survival in a world dominated by increased energy resource competition and climate change. FiT should be seen as an indirectly taxed, government-directed investment into clean energy, deferred consumption in order to grow the economy in the long run. The primary weakness of most RE technologies—their higher relative costs of power generation and initial investment—can be offset by increased economies of scale of production through widespread adoption, at national and global levels.


An old saying goes: “the best time to plant a tree is twenty years ago; the second best time is now.” If we don’t establish the incentives for renewable energy now, we will be draining momentum on our country’s push for resilient energy in the future. Already potential RE investments have fled to countries like Thailand which have chosen to make a stand for clean power. Contrary to some views, FiT is not unfit for the country. So it’s time to flex some muscles and clean up Philippine energy.

Our Choice, from Manila Standard


The following is our comment to the article that appear in Manila Standard article: Our Energy Choice

The author has outlined the fined points of going RENEWABLES, and we would like to follow up for the readers of our blog.

http://manilastandardtoday.com/www2/2012/07/03/our-energy-choices/

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EastGreenfields comment

The best way forward is to give incentives to all would be investors by immediately implementing the FIT, this is to encourage the rapid deployment of various RE technology.

Second is to follow up with the formulation of net metering to encourage distributed power generation on micro scale (residential).

Third and is tied with the net metering scheme is to implement the RPS, so that the generation / utilization mix of the distribution utilities will increase their RE portfolios.

There is no better choice but to implement now… fossil fuels are finite sources and prices will soon jack up to economically disastrous level when developed and developing countries compete for the supply.

There is mis-information when opponents of FIT says it will burden the end consumers… its true that there is cost to RE technology, but the question is by how much ? By how much FIT ALL will be when integrated to end users bill ? Compared to 67 cents increased since January 2012 to June 2012 and as compared to Php2.22 increased since January 2010 to June 2012. Computation by RE advocates varies from 1 cents to 50 cents per kW-hr impact to end users bill, but take note that these cost impact to end users is locked for 20 years! Within 20 years by how much rate increase will be by the fossil fuel based electricity will be? 2012 records show, in 6 months increase could be as high as 67 cents! And for 20 years how high would that be compared to 50 cents (the highest FIT rate, as last been publicly debated by the pros and cons) for the entire 20 years!

The choice is clear… we don’t have any recourse but to go RENEWABLES!

Green vs Black Electricity

Up up and away!!!

This must be what all of us is screaming.

Indeed since 2010, there is dramatic increase in the cost of generation to the world's already second highest generation rate. Coming this July 2012, we are poised to be the number 1 most expensive generation cost in the world... see link here.

This June 2012 bill already had shown 112% rate increase since January 2012 or an increase of 67 cents (PhP) from Php5.464 to Php6.1375 per kW-hr.


Since Jan 2010 to June 2012, the increase is already 156.6% or more than the national inflation rate. This increase if from Php3.92 to Php6.14 per kW-hr or an increase of Php2.22 per kW-hr!



This can be summarized that increase in power bills is inevitable since these increases are pegged or being reasoned to be the effect of oil and gas price increase in the world market. Of course it is because oil, gas and coal are finite resources... dumb dumb!

This is expected already... for a finite energy source...

So what should be done..? Something infinite source of energy should be utilize... and what are those?
The wind, water and SUN.


Solar FIT impact to consumers when calculated using the already reduced proposed installation capacity is only Php0.56 per kW-hr... say what? 60 cents monthly impact for 20 years as against the 67 cents REAL increase experienced from January 2012 to June 2012! Something's wrong when you said that 60 cents is higher than 67 cents! In what universe would that be?

And then you have FIT ALLowance or the FIT rate when all Renewables energy sources are bundled together, the FIT ALL is pegged at Php0.01 kW-hr (wind, micro hydro power, biodiesel, and solar bundled into one) click here to read FIT ALL

Which is more expensive? 5 cents SOLAR FIT or monthly power bill increase?

Even so, is 1 centavo FIT ALL impact higher than what increase will be in the next 6 months?

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This is part of a series. SOLAR BASICS 101








2012/07/02

Philippine Solar FIT Basics (101)

Philippine Solar FIT Basics (101)



In this blog we will answer the question: How Much is the SOLAR FIT Impact to my electricity bill?


What is Solar FIT? Solar FIT is a fixed rate (of money) to be paid to Solar Power Developer over agreed period of time to recuperate investment. FITs are scheme adopted by other countries to encourage the utilization and generation of electricity using Solar Cell Modules. In short this is a subsidy paid to solar power developers. See link for other countries FIT program.


How much is the proposed Philippine Solar FIT? Currently the proposed Philippine SOLAR FIT is Php12 per kW-hr. This has been reduced from the previous proposed rate of Php17.95 per kW-hr. See link for the Solar FIT rate proposed.


Opponents of Solar power utilization in the Philippines always cite that Solar Power technology is expensive technology and it will burden ordinary consumer when the SOLAR FIT is integrated into end users electricity bill. 


Let's tackle it head on if their argument holds water.


Electricity produced by solar shall be mixed with other electricity produced by other sources (more than 75% of the overall mix is fossil based i.e. coal and natural gas). So how much will be the total proposed solar electricity contribution? It is only 50 MW (see link here). Electricity produced by solar then shall constitute only 0.004% out of 13,000 MW if you take the end of 2012 total per Department of Energy, Phil Energy Plan 2003-2012. The percentage of electricity to be produced by solar then will be even lower when the energy plan is updated. 


If we take the proposed 50 MW solar power installation, 13,000 MW demand and Php12 solar FIT then the following shall be concluded.


Cost impact of solar FIT to be included to the end users monthly bill for the next 20 years:
Php0.046 


How did we arrive to that final figure? Here it is.
The FIT is multiplied by solar’s generation, before they are spread over the Luzon's total consumption, resulting in what are known as retail impacts—the increase per kwhr that each end user pays. 


Do your own math, I may have a broken calculator... whatever twisting and tweaking you do, you won't have Php12 per kW-hr added to your monthly bill simply because the electricity produced by solar power plants will be mixed together with other electricity produced using other sources, 23% of which is already renewable (Geothermal, Hydro, Wind, and Biodiesel as of May 2012).


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This blog is a part of series to inform about the Power situationer and Renewable energy status in the Philippines.


Next on Series: Green electricity prices versus Black electricity prices.