Philippine Power Gen Mix 2011Press Update:

The World Wide Fund for Nature (WWF-Philippines) contests the figures cited by the Foundation for Economic Freedom (FEF) in their recent press release opposing the increase in solar energy installation targets.

The FEF claims the cost to the Filipino consumer for implementing these new solar projects amounts to PHP12 billion annually. When WWF’s own energy experts computed the cost of the new solar projects based on Feed-in-Tariff (FiT) rates and current electricity prices – the cost was just a little over PHP3 billion.

“WWF is ready to show its computations. FEF should immediately reveal how they arrived at these prices if they want to be transparent about their advocacy of opposing solar power for the sake of the Filipino people. So far, what we have are publicly-circulated statements without any technical explanation. Where did these figures come from?” asks WWF-Philippines Vice-chair and CEO Jose Ma. Lorenzo Tan.

Figures Don’t Match­

WWF doesn’t stand alone. The FEF figures also do not match the National Renewable Energy Board (NREB) figures. In WWF’s technical analysis, the additional 450 MW solar power installations with a FiT rate of PHP9.68 per kWh will only amount to an additional PHP3,279,744,000.

Solar plants operate at an average capacity factor of 20% because solar plants do not produce energy at night, or when cloud cover is heavy. Based on this, 450 MW of additional solar power plants shall produce an estimated 788,400,000 kWh a year.

Current Meralco generation charges are pegged at PHP 5.52/kWh. When this is subtracted from the cost per kWh of solar power, a difference of PHP 4.16/kWh emerges. This means that producing 1 MW of solar power will only cost an additional PHP 4.16 compared to today’s generation charges. When one multiplies the total amount of kilowatts that solar plants will produce using that rate, then the figure amounts to PHP 3 billion – a far cry from FEF’s PHP 12 billion estimate.

WWF also estimated that the added cost to a consumer’s electricity bill would be a maximum of PHP 0.05/kwh for the additional 450 MW of solar plants. This price shall never increase and in fact, will only decrease over the next 20 years. However, FEF estimated that the added cost to a consumer’s electric bill would be PHP 0.32/kwh, showing a huge disparity.

This means that a household with an average monthly consumption of 300 kWh will only pay an additional PHP 15 per month for clean RE, which is also cheaper in the long run. This would eventually stabilize the cost of electricity, thereby achieving long-term energy security for the Philippines.

“These bloated FEF figures create false public information and delay RE projects, while promoting expensive fossil fuels. The Electric Power Industry Reform Act (EPIRA) was originally implemented to limit the cost of electricity. Has that happened? No. One of the causes is our over-reliance on fossil fuel based power plants whose fuel prices continue to fluctuate and rise,” explains WWF Climate Change and Energy Programme Head Atty. Angela Consuelo Ibay.

Cost per kWh of Additional Solar FiTFossil-Fuel-Powered Electricity Most Expensive in Asia

EPIRA was implemented in 2001 when the Philippine power generation mix had a 37.29% share of RE and a 62.71% share of fossil fuels. Since then, the share of RE has dropped to 28.37% as of 2011 and the price of electricity in the Philippines is now considered among the highest in Asia.

WWF supports the DOE’s initiative to increase RE in the country’s power generation mix. If it is the government’s desire to help stabilize electricity prices over the next 20 years – achieving greater energy security and national competitiveness – then it is imperative that we reduce dependence on imported fossil fuel supplies, the prices of which we have no control over.

RE sources are among the country’s few competitive advantages, especially since it is poor in fossil fuel resources. “Major increases in our power rates were caused by generation cost hikes. With fossil fuel prices continually rising due to dwindling supplies and soaring demand, the cost of our electricity shall rise further – unless we use RE to shield us from the cost volatility of fossil fuels,” adds Ibay.

WWF requests FEF to release the technical basis for their statements so that misconceptions regarding the implementation of the FiT rates can be cleared up and stakeholders can be properly informed on the true cost of RE when compared to current electricity costs.

“Do we have an efficient power distribution system today? Do we control the supply and cost of fossil fuels? Are our energy prices affordable? Do we still suffer brownouts?” asks Tan. “Our 50-year old, fossil fuel dependent system has not worked. Why invest good money after bad? Show me a coal plant that will commit to shield the poor and hold its power generation prices constant for 20 years. It is the age of energy self-sufficiency. We have renewable options. Let us use them.”