While it seems to be the correct step, there are issues that could make the headlong push for renewable energy more challenging
If we’re talking about the priority economic thrusts of the current administration, two seem to stand out above the rest: one, create an investment climate attractive to investors, and two, make the transition to clean energy.But to meet the first challenge, the second one has to hurdle its biggest test, that of ensuring a stable supply of electricity which is on top of the to-do list of investors everywhere.Stability, however, is not the sole requirement for power supply. It also has to have reasonable costs.The transition to renewable energy or RE appears to be the most logical solution. Its potential to bring down energy cost is clear. Go solar because energy from the sun is limitless and free of charge. Harness the wind and it offers the same benefits.The costs of solar panels are falling. Wind turbines, the giant spinning towers that dot the skyline, are also declining in costs.But grid stability? On this question, the answer brings us to hydro, particularly pumped storage which is not as vulnerable to the threats posed by weather disturbances to solar and wind.The push for RE is moving ahead with planned green energy auctions (GEA) by the Department of Energy (DOE) which is historic in the sense that it actually will open the grid to renewables.While it seems to be the correct step, there are issues that could make the headlong push for RE more challenging.First, the extended GEA schedule set in August, with producers of solar, wind and hydro power expected to participate, actually puts into question the availability of these RE solutions. While we certainly hope for its success, given the critical role the DOE plays in the nation’s energy security, the absence of urgency offers ample cause for concern.Second, the challenge is to stabilize the supply of power while waiting for all the RE technologies to deliver. Does it mean continued reliance on coal? Will it require a forced wedding with coal in the interim? Once these renewables are fully developed, will the power grid be equipped to handle the load?Yet another challenge, a third one, is the bureaucratic red tape that appears to hobble the Energy Regulatory Commission (ERC) into complacency.The ERC has yet to move ahead in setting rates for RE sources, much less act on a regulatory framework for the transition to green energy, including the pricing determination methodology and cost parameters for the Non-Feed-In-Tariff (Non-FIT) eligible RE Technologies. Which means there’s zero policy foundation for RE from the country’s energy regulatory body, a misnomer in an era of deregulation.As the energy sector heads to a historic third GEA, the DOE appears to be brimming with good intentions but lacking in wisdom.The DOE projected a 28,000 megawatt demand and supply of 50,000 megawatts with increasing share from RE.It wants to raise RE share in total energy supply to 35 percent by the year 2030, 50 percent by 2040, but while enthusiasm is above the rim on RE, it conveniently forgets, wittingly or unwittingly, the question of grid stability.A system overhaul is required to walk the tightrope between clean energy and stable supply. And the timetable seems to lack a sense of urgency.The commencement period for impounding hydro and pumped-storage hydro will be from 2028 to 2030. Here, we are simply not being helped by time as pumped storage facilities need 5 to 6 years to build and become operational.Geothermal will begin in 2024 until 2030, and ROR hydro is targeted from 2026 to 2028. As we wait for these dates, these numbers stare us in the face in real time.One, dry season night-time peak demand will likely suffer a 21,655 deficiency from solar and wind which would push baseload (those in operation already) to ramp up generation. And two, solar and wind are likely to be unavailable during storms for safety reasons.The time to act to secure the energy future is now. Let us hope DOE and ERC can expedite the enabling mechanism, GEA3, to start these projects.As we watch developments in the energy front with eyes wide open, let’s try to heed one lesson on enthusiasm. Sometimes going full steam ahead without careful study can be counter-productive, even misplaced.Especially if the ERC continues to drag its feet on the one thing needed to fully open RE’s doors—determine pricing and policy.(Email: [email protected])