THE Department of Energy (DOE) is unfazed by the rising number of canceled renewable-energy (RE) service contracts, as it vowed to continue to gather more applications for RE contracts.
“We should approve as many [contracts] as we can, but, at the same time, we should also be quick in canceling approved contracts that are not showing any signs of development,” Energy Secretary Carlos Jericho L. Petilla said.
As of October 31 this year, the agency has awarded a total of 638 RE contracts, six years after the RE Act of 2008 was enacted into law.
Latest data from the agency showed that these contracts have a potential generating capacity of 10,068.031 megawatts (MW), as against total installed capacity of 2,350 MW.
Of the more than 500 RE projects awarded by the government, 394 are hydro power; 75 solar; 55 wind; 68 biomass; 41 geothermal; and 5 are ocean energy.
‘Flippers’
PETILLA could not recall how many RE contracts his office has canceled, but said, “I am the Cabinet secretary with the most number of service contracts that have been canceled.”
“If we have approved hundreds, I know we have also canceled hundreds,” he said.
He added: “A lot are interested, but not serious. We call them ‘flippers.’ Many of these RE contracts are not moving, because these are sold to somebody else. When we cancel their contracts, they don’t complain because, in the first place, they were not serious at all.”
The DOE has already streamlined the process of RE applications—from two years down to just 45 days—to ensure that RE developers and investors will have an easier time in applying for RE service contracts.
“What have we got to lose if we cancel the contracts? None. It’s [RE developers] that will lose, because they will shell out money. So, I say, we should approve as many as we can, but we will be strict if they don’t comply. If you are serious, then we are here to support you; but if you are not, then you have to take the backseat,” Petilla said.
RE is affordable
PETILLA said the country, which imports 90 percent of its fuel requirements, can depend on RE as a stable power source whenever world fuel price shoots up.
The recent geopolitical issues in Indonesia and armed conflict in Iraq, Petilla said, serve as a reminder that the Philippines is highly susceptible to fluctuating global prices and the looming threats of energy crisis.
To address this, the DOE is strongly pushing for the RE to have its rightful place in the country’s energy mix. At present, coal and diesel dominate the mix.
“At present, the Philippines is harnessing 30 percent of RE in our energy mix. If we keep it at that level, we will have a secure energy source, even if oil prices go up, or if there is a shortage in supply in the international market,” Petilla said. “Because RE is indigenous, which means it is locally available, we can depend on it for energy security, even if there are political issues, such as war in other countries.”
This benefit alone, he said, should outweigh the cost implications associated with RE. The infrastructure needed to harness RE is expensive.
“As a simple example, the cost of electricity from a coal plant can run up to P5.50 per kilowatt-hour [kWh] plus P6.50 for distribution and transmission, which amounts to P12. If you install solar panels on your rooftop, you will only spend P9 per kWh for generation and no cost for distribution or transmission. This already saves you up to P3 per kWh,” Petilla said.
The World Wide Fund for Nature (WWF) cited the many benefits of RE. “Many renewable systems can be immediately installed. They produce electricity at a stable rate, and are insulated from price increases dictated by international markets,” said WWF Vice Chairman and CEO Jose Ma. Lorenzo Tan, adding that other indigenous RE sources, such as biomass and hydro, can be used to complement existing base-load power plants.
Petilla said RE is a must-have in the future of the Philippines’s energy mix. “In addition to contributing to our energy sources, which ultimately translates to energy security, utilizing RE is needed for environmental reasons. Since it is clean energy, harnessing RE can cushion the effects of climate change,” he said.
The DOE is working with other government agencies, such as the Climate Change Commission, and organizations, like Deutsche Gesellschaft für Internationale Zusammenarbeit, to improve the perception on RE and propel the shift toward a more sustainable energy supply in the Philippines.