Philippines: Renewables feared to be too expensive

Philippines: Renewables feared to be too expensive

The Federation of Philippine Industries Inc. (FPI) said government should
reconsider its views on renewable energy (RE) as it might unduly burden
consumers in the long run.

RE may turn out to be too expensive because of the feed-in-tariff (FIT)
scheme.

"We have nothing against renewable energy but we do have something against
high cost of renewable energy because there are other renewable energy
sources that are much more established such as geothermal, hydroelectric and
even more basic such as biomass," said FPI president George Chua at a power
industry forum in Pasig.

Chua said the FPI is worried the cost of renewable energy may shoot up as
the FIT allowance is expected to continue to rise as long as more projects
are allowed by the government to be enrolled in the incentive scheme .

FIT was introduced by the government to boost the development of RE, among
the perks under it is priority dispatch in the spot market and fixed rates.
FIT eligible plants are assured with fixed rates currently at P9.68 per
kilowatt hour (kWh) for the first batch of solar projects and P8.69 per kWh
for the second batch; P8.53 per kWh for the first batch of wind projects and
P7.40 per kWh for the second batch; P6.63 per kWh for biomass and P5.90 kWh
for run-of-river hydro.

The premium being paid to FIT qualified developers are being sourced from
all electricity consumers as a P0.12 per kilowatt hour uniform charge and
the government is allowed to yearly evaluate the said charge whether to
increase or decrease it as needed.

Chua said the collection of the premium affects not only regular consumers
but most especially, business.

"That's all well and good if you were in the business of developing these
solar panels but not a single Philippine company operating here in the
Philippines is actually in that line of business so I don't know who we are
subsidizing. I think from the government, at this point can take a fresh
look at that and see why we are supporting or subsidizing our richer
neighbors which keep on developing these technologies," Chua said.

He said dismissed arguments that cost of power should not become a hindrance
for investments to come in the Philippines as it accounts for only three
percent of total operations.

"Unfortunately, for people like us who have to invest our own money from
our own pockets putting up our own plants, we don't even make the three
percent out of our gross revenue. In a very competitive market, three
percent means making or breaking it," Chua said.

Aside from leading the FPI, Chua is also president and chief executive
officer of the Financial Executives Institute of the Philippines.

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Ref:
http://www.malaya.com.ph/business-news/business/renewables-feared-be-too-exp
ensive

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com