ONE cannot help but somewhat worry about the seeming pressure on the government to move quickly on regulations, incentives and supply allocations for renewable-energy companies, particularly those that propose to generate power or electricity using solar, wind, water or hydro, and biomass, among others.
There is no arguing, of course, against using renewable or non-fossil fuel inputs to generate electricity. Even with respect to motor vehicles, it is highly laudable to move toward hybrid—or the combined use of fossil fuel-based internal-combustion engines and electro-mechanical mechanisms to propel cars and trucks.
The concern, however, lies in the manner and process undertaken by regulators with respect to giving life to the legislation on the development and use of renewable energy, also with respect to existing policies on clean air, energy self-sufficiency, industrial development and consumer protection.
One senses significant political pressure being exerted on powers that be to adjust or calibrate policy and regulation one way or the other. After all, it will not be surprising if big players in energy—local or foreign—can always establish some linkage or political connection to policy-makers and regulators.
Take the case of the United States, where The Associated Press reported that House Republicans were “questioning whether the White House rushed approval of a half-billion-dollar loan guarantee for a now-bankrupt solar-panel manufacturer once cited as the kind of renewable-energy company worthy of federal stimulus money.”
The AP reported: “Solyndra Inc. was a major presence in Washington and spent millions of dollars on lobbying there, particularly about the energy department’s loan-guarantee program. And its executives raised thousands of dollars for Obama and the Democrats in Congress. The collapse of the Fremont, California-based company once touted by President Barack Obama ultimately left taxpayers on the hook for $528 million, raising questions if the loan was rushed to accommodate a company event in September 2009 that featured Vice President Joe Biden.”
The AP added that “a congressional panel examining the loan disclosed e-mail that appeared to show senior staff at the Office of Management and Budget chafing about having to conduct rushed approvals of federal loan guarantees designed to help jump-start the nation’s renewable- energy industry.”
“We would prefer to have sufficient time to do our due diligence reviews and have the approval set the date for the announcement rather than the other way around,” the AP quoted one e-mail from an unnamed OMB aide to Biden’s office.
The AP added that documents it reviewed showed that Solyndra spent nearly $2 million lobbying the federal government during the last four years, including on provisions of the energy department’s loan program just months before White House officials urged that the funds be approved. Solyndra has since filed for bankruptcy and shed 1,100 workers, claiming it could not compete with foreign manufacturers of solar panels.
This was a terrible conclusion to a laudable effort by the Obama administration and Democratic lawmakers to aggressively push for investments “in renewable- energy projects as a way to create jobs and to reduce the nation’s reliance on oil.” One hopes, however, that Philippine solar developers do not suffer the same fate. In policy-making, haste obviously results in waste.
The AP noted that Solyndra went under after being rendered uncompetitive as Chinese companies “flooded the market with inexpensive panels and Europe’s economy weakened demand from customers. The result has been an unprecedented drop in solar cell prices this year.” Such market developments, no doubt, will also pose some concern for local solar companies.
Locally, a Netherlands-based solar-power developer was reported to be complaining about delays in approvals for its application to build eight solar-power plants all over the country, involving an investment of more than $100 million for a total generating capacity of 70 megawatts.
The same company, like several others, is also awaiting the approval of the feed-in-tariff (FIT) rates by the Energy Regulatory Commission (ERC, which refers to a “guaranteed rate given to renewable-energy developers for their output.”
To date, the National Renewable Energy Board reportedly recommends FIT rates for solar power, ocean power, wind power, biomass and hydropower at P17.95 per kilowatt-hour, P17.65/kWh, P10.37/kWh, P7/kWh and P6.15/kWh, respectively. It also trimmed the installation target for solar-power projects to 50 MW instead of 100 MW.
Given current market developments with respect to dropping prices for China-made solar panels, which rendered a major US solar developer uncompetitive, should the Filipino public still be burdened with a significantly expensive FIT rate particularly for solar power? Will such a policy continue to make sense relative to incentivizing local developers if imported panels may turn out to be cheaper?
And given developments in the US with respect to alleged anomalies in the grant of incentives to a major solar developer, should the Philippine government exercise more caution in ensuring it does not make the same mistake with respect to its push for renewable-energy use?
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