FEF Position on Unfair Power Price Hike


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FEF Position on Unfair Power Price Hike

  1. 1. Our Position on RA 9513 Foundation for Economic Freedom, Inc .
  2. 2. What is renewable energy? <ul><li>Energy from resources that do not have an upper limit on the total quantity to be used. </li></ul><ul><li>Such resources are renewable on a regular basis, and whose renewal rate is relatively rapid to consider availability over an indefinite period of time. </li></ul><ul><li>These include, among others, biomass , solar , wind , geothermal , ocean energy , and hydropower conforming with internationally accepted norms and standards on dams, and other emerging renewable energy technologies. (RA 9513) </li></ul>
  3. 3. Fast Facts: the Philippine Situation <ul><li>34% of the country’s energy mix is renewable or around 5,300 MW out of the 15,000 MW installed capacity </li></ul><ul><li>Contrast to the Global average: less than 10% </li></ul><ul><li>Philippines contributes only 0.48% to global carbon pollution (NREB) </li></ul>
  4. 4. Fast Facts: the Philippine Situation <ul><li>Transportation is the country’s top polluter </li></ul><ul><li>Power plants belong to the bottom ten polluters </li></ul>
  5. 5. Renewable Energy Act of 2008 <ul><li>Signed into law in December 2008, supposedly to provide incentives for investors to engage in RE projects in the country </li></ul><ul><li>Department of Energy (DOE) </li></ul><ul><li>- lead agency </li></ul><ul><li>Energy Regulatory Commission (ERC) – an independent quasi-judicial regulatory agency supposed to issue FIT (feed-in-tariff) rules in consultation with the National Renewable Energy Board (NREB) created under Sec.27 </li></ul>
  6. 6. What is FIT? <ul><li>An RE policy that guarantees payments on a fixed rate per kwh for emerging RE sources: solar, biomass, wind, solar, run-of-river hydro </li></ul><ul><li>A fancy term for the amount that the government wants to add to our electricity bills to encourage more use of new RE </li></ul><ul><li>For all intents and purposes, </li></ul><ul><li>FIT IS A TAX </li></ul>
  7. 7. What is FIT? <ul><li>A subsidy to make up for what the RE technologies cost: </li></ul><ul><ul><li>Solar – PHP 17.95 kw/hr </li></ul></ul><ul><ul><li>Wind-PHP 10.37 kw/hr </li></ul></ul><ul><ul><li>Biomass – PHP 7.0 kw/hr </li></ul></ul><ul><ul><li>RoR-PHP 6.15 /kwhr </li></ul></ul><ul><ul><li>… vs conventional </li></ul></ul><ul><ul><li>(PHP 5.0 kw/hr ) </li></ul></ul>
  8. 8. <ul><li>We do not oppose RE . We oppose the plan to make Filipino consumers and industries pay PHP 8B annually for the next 20 years to subsidize and guarantee the profits of RE developers . </li></ul>Our Position <ul><li>It is more prudent to wait , given advances in technology, until the cost of solar and wind power drops to parity with conventional sources which are more efficient. </li></ul>
  9. 9. Our Position <ul><li>We can increase our share of RE by rehabilitating and improving existing hydro and geothermal sources , which produce energy far cheaper than wind or solar. </li></ul><ul><li>We support solar for OFF-Grid small island areas where the avoided cost is much higher (PHP 11/kwhr) due to the use of diesel </li></ul>
  10. 10. Our Disagreements with NREB <ul><li>DOE recommended 20 MW for solar but NREB increased it to 100 MW. This means an additional surcharge on consumers. </li></ul><ul><li>Why should FIT be imposed for 20 years when the minimum proposed by law is only 12 years? </li></ul><ul><li>No competitive bidding whether from among the different RE technologies or within a specific technology. </li></ul>
  11. 11. Our Disagreements with NREB <ul><li>No bidding for terms of less than 20 years. No bidding, period. All contracts are negotiated. </li></ul><ul><li>FIT Rate determined by a “risk-adjusted” rate of return. = guaranteed super-profits </li></ul><ul><li>Subsidy will not go to “cheapest first” but all </li></ul><ul><li>RE developers are guaranteed subsidy, even high costing wind and solar. </li></ul><ul><li>RE Developers are guaranteed cash flow, profits, collection and against technological obsolescence for 20 years. </li></ul>
  12. 12. Our Disagreements with NREB <ul><li>NREB hiding onerous charge against consumers by submitting FIT Rate under the “rule-making” power of ERC. </li></ul><ul><li>Ergo, no public hearing , no publication , just “public consultation” EVEN IF THE FIT RATE WILL INCREASE CHARGES FOR ALL CONSUMERS . This is a clear violation of the letter and spirit of EPIRA and the mandate of ERC. </li></ul>
  13. 13. They say; we say They say… We have to diversify. We say… Solar and wind are unreliable and can’t be basis for energy diversification. We need around 5,000 MW in the next few years to supply growing energy demand Old RE is still available that is yet to be untapped -15,000 MW (hydro and geothermal)
  14. 14. They say… It is good for the environment. We say… The Philippines has no obligation to reduce its carbon emissions. Our contribution to global pollution is almost negligible . Transportation is the top pollutant; power plants rank in the bottom ten. We are already producing more than 30% of our power from Renewables, more than the US at 10 %.
  15. 15. They say… Energy independence and security We say… Better results; cheaper alternative . Solar and wind are rather inefficient and unsteady since they are dependent on weather and other climatic conditions. Conventional sources are more reliable and cost only PHP 5 per kilowatt hour We still have 15,000 MW of untapped hydro and geothermal
  16. 16. They say… Solar energy is good. We say… We don’t oppose solar energy per se, but they should go to off-grid small island areas where the avoided cost (about PHP 11/kwhr) is high due to the use of diesel.
  17. 17. They say… What is PHP 12 centavos per kilowatt hour? We say… It only covers the generation charge. There are hidden costs . NGCP will also need to install new transmission lines and it may require further rate hikes for distribution utilities.
  18. 18. Why does it concern you? <ul><ul><li>Businesses, which already suffer from the </li></ul></ul><ul><ul><li>highest power cost in Asia, will have to suffer more unnecessarily. This will make them less competitive. </li></ul></ul><ul><ul><li>Investors will not come to the country if power cost will become higher still. </li></ul></ul><ul><ul><li>No investments, no jobs. </li></ul></ul><ul><ul><li>Consumers are being taxed without them knowing it just to subsidize the profits of these wealthy RE developers. </li></ul></ul>
  19. 19. What can you do? <ul><li>File a comment using the official comment form at the ERC </li></ul><ul><li>File a petition for intervention/relief </li></ul><ul><li>Make noise in social media . </li></ul><ul><li>“ Like” our page: NO to Electricity HIKE for Filipinos </li></ul>PROTEST, PROTEST, PROTEST!
  20. 20. Annex A <ul><li>P1.6 billion - Daang Hari-South Luzon Expressway link </li></ul><ul><li>P10.59 billion - NAIA expressway </li></ul><ul><li>P21 billion - North Luzon-South Luzon expressway link </li></ul><ul><li>  P10.5-billion   - Cavite-Laguna </li></ul><ul><li>expressway </li></ul>
  21. 21. Annex B