“(Hydro-power) is immune to the erratic price fluctuations of energy commodities such as crude oil and coal…”
The transition from fossil-based fuels to clean and sustainable energy sources should not be a complex process.
The economic benefits and the positive environmental impacts are crystal clear. Policy-makers and regulators should easily recognize the pluses of renewable energy (RE) sources—they generate three times more jobs than fossil fuels and directly address the climate crisis.
The government, thus, must be discerning in extending incentives to proponents of clean energy and dispatch its rules and policies with urgency. There is a timeline that regulators should strictly follow in reaching the objectives of renewable sources of electricity and a fine line that they must distinguish between clean energy and grid stability.
The push for RE is moving ahead with the planned green energy auctions (GEA) by the Energy Regulatory Commission (ERC) in August this year that will significantly open the electricity grid for renewables. But are the parameters of the bidding clear to the participants?
The Department of Energy and the ERC, for one, have not laid down the regulatory framework for the transition to green energy, nor finalized the feed-in tariff—or the renewable energy policy that offers guaranteed payments on a fixed rate per kilowatt-hour.
Another policy issue bugging the auction is power stability pending the awards and delivery of the RE technologies. This interim period implies continued reliance on dirty coal.
The Philippines has been trying to create an attractive investment climate primarily by way of reducing electricity rates. The only meaningful route to cheap power rates is through clean energy and stable supply at reasonable costs.
Renewable energy from natural resources such as solar and wind abound in the Philippines. Their potential to lower energy cost is apparent because they can easily be replenished. The costs of solar panels as well as wind turbines are also declining.
Hydro-power, meanwhile, is one of the most economical energy sources overall. It is immune to the erratic price fluctuations of energy commodities such as crude oil and coal, since it harnesses the self-renewing force of rivers.
Hydro-electricity is generated through the construction of dams that use the natural flow of water to spin the turbines, as well as through pumped storage and run-of-the-river set-ups. It is not vulnerable to the threats posed by weather disturbances to solar and wind.
Hydro-power dams, in addition, provide drinking water and irrigation to farms, serve as flood and drought control, and depend on stable rainfall patterns.
Would the power grid be equipped to handle the added load once these renewables are fully developed? As if this wasn’t enough, red tape appears to be making the ERC and the DOE complacent in setting the rates for RE proponents.
The DOE is pushing the third green energy auction later in the year to boost the nation’s power generating capacity. It has projected a 28,000-megawatt demand by 2030 and 50,000 megawatts by 2040, with a increasing share from RE.
It wants to raise RE share in total energy supply to 35 percent by 2030 and 50 percent by 2040 but is silent on the question of grid stability.
For instance, supply from impounding hydro and pumped-storage hydro are set to be available from 2028 to 2030, per the DOE data. But pumped storage facilities will take five to six years to build before they become operational. Geothermal power plants will begin in 2024 until 2030, while run-of-the-river hydroelectricity is targeted from 2026 to 2028.
DOE’s power demand and supply forecast appears faulty. The night time peak demand during the dry seasons will likely suffer a 21,655-megawatt deficiency from solar and wind, which would push base-load (those in operation already) to ramp up generation. Solar and wind also will likely not be available during storms for safety reasons.
The DOE and ERC can address these deficiencies through an enabling mechanism―the next RE auction. The ERC, foremost, should act fast in determining a clear RE pricing and policy to fully open the doors to proponents.
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