Philippines: Renewables surge; RCOA debate rages

Philippines: Renewables surge; RCOA debate rages

Renewables are fast making their way into the energy mainstream and could be
the norm in the not-so-distant future. Even Saudi Arabia, the world's
biggest oil producer and exporter, is turning to wind and solar to generate
electricity at home.

The Middle East kingdom plans to develop nearly 10 gigawatts of renewable
energy by 2023, starting with wind and solar plants in its vast northwestern
desert. The effort could replace the equivalent of 80,000 barrels of oil a
day now burned for power, a Bloomberg report said. Saudi Arabia, in all, is
seeking $30 billion to $50 billion worth of investment in renewables.

In the Philippines, renewables already account for about 30 percent of the
country's power mix, compared with the plan of the more developed European
Union to generate 20 percent of energy from similar sources by 2020. The
share of renewable energy sources is expected to further increase amid the
plan of government-led National Renewable Energy Plan to triple the capacity
to 15,304 megawatts by 2030.

More entering the fray

A relatively new aggressive company is making its own stride in the
renewables sector. Pure Energy Holdings Corp. is on the prowl to
strategically acquire assets, develop natural resources that are
sustainable, and be a basic service provider for the needs of the community.

Pure Energy's existing and planned projects, under unit Repower Energy
Development Corp., will have a total capacity of 153 MW, of which 123 to 125
MW will come from hydro energy. The company plans more investments in the
renewable energy sector―besides hydropower ventures―to build up its
portfolio to 500 MW in five years, company officials said.

Pure Energy is looking at a basket of renewable energy projects such as
wind, solar and biomass to expand the portfolio, after it lists its shares
in the local stock exchange. It already owns 50 percent plus one share in a
joint venture named Pure Meridian Hydropower Corp., which has nine
projects. These include a 10.6-MW project in Bukidnon, which has just broken
ground with construction soon to start.

The company also broke ground for the second project with Manila Electric
Co., a 3-MW station in the province of Quezon. Then there's a run-of-river
hydro power plant in Pulanai River, Bukidnon that is expected to generate
more than 74 gigawatt-hours annually.

Aside from Meralco, Pure Energy is jointly developing a P620-million hydro
power plant with the Tiu-Laurel family behind the food and fishing
conglomerate Frabelle Corp. The 3-MW facility will be built in the upper
cascade of the Labayat River.

A recent report from Philippine Electricity Market Corp. said renewable
energy investments had saved the Philippines P4.04 billion. Renewable energy
technologies have the potential to bring the Philippines to a state of
energy independence.

Muddled issue

The Supreme Court on Tuesday last week temporarily barred the government
from implementing new regulations that compelled big consumers starting on
February 26 to enter into a power supply deal with any of the retail
electricity suppliers accredited by the Department of Energy and the Energy
Regulatory Commission.

The TRO did not effectively stop the implementation of the retail
competition and open access, or RCOA, as some misinformed sectors want to
make it appear.

These groups claimed the Supreme Court order could lead to unfair
competition. Not really. The TRO actually empowers customers to decide on
their own, instead of favoring big generators and generator-RES. It gives
consumers the power to choose and not impose on customers to abandon
existing power suppliers

The DoE and ERC resolutions mandated that customers who consume more than 1
MW and 750MW of power must discard their current suppliers, even if they are
already satisfied with the arrangement. Some quarters have complained that
electricity consumers would be forced to buy their power only from retail
electricity suppliers "hand-picked" and accredited by the ERC.

The local RES who were previously allowed by the Electric Power Industry
Reform Act to sell power to the contestable customers were disallowed by the
ERC and ordered to wind down their operations. But why force these customers
to leave if they do not want to?

The SC did not not stop or delay RCOA. Consumers are still free to buy their
power from the ERC-licensed RES if they choose to. They are not prevented
from doing so by the SC.

What the TRO prevented is the order of the ERC to force consumers to buy
their power only from ERC-licensed RES. The RCOA, thus, is still in place
and effective contrary to what the some sector claims.

Several customers have deferred switching their suppliers when the TRO was
issued because they believe mandatory contestability is disadvantageous to
them. About 140 electricity customers readily requested a delay in their
RCOA switching applications.

Electricity consumers are not keen on abandoning their current suppliers,
who have been providing them with efficient service, in favor of RES
licensed by the DoE and ERC. Small business enterprises, the academe, power
sector watchdog and electricity consumer groups have lauded the SC TRO
because it gives back their right to freedom of choice as envisioned by
Epira.

"We believe that our government and regulating bodies should protect our
basic, constitutional right to freedom of choice. And this right should
extend to all electricity consumers. If we are allowed to choose the best
supplier for our needs in a market that is allowed to work freely and for
the common good, then such a scenario will be most beneficial to all
consumers concerned, especially those smaller scale contestable," one
consumer said.

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Link to Original Article:
http://thestandard.com.ph/business/business-columns/ray-s-e-ano/230634/renew
ables-surge-rcoa-debate-rages.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com