You are on page 1of 21

Reaction to DOE plans and pronouncements

RTD on “Energizing Economic Growth in the
Philippines”

Bienvenido S. Oplas Jr.
Pres., Minimal Government Thinkers
Fellow, Stratbase-ADRi
Columnist, BusinessWorld, “My Cup of Liberty”

RTD sponsored by Stratbase-ADRi
F1 Hotel, BGC Taguig City, August 15, 2017

https://electricityasia.wordpress.com/
http://funwithgovernment.blogspot.com/
* We already
have high RE
share, 33% of
installed cap. à

* In World
Energy Council
(WEC)’s World
Energy
Trilemma Index
2016, out of 125
countries
studied, PH was
#1 in Env’l
sustainability à

But #90 in
energy equity/
affordability.
http://bworldonline.com/towards-increased-energy-security-affordability/
* Good trajectory. To
sustain fast econ
growth, we need
stable, reliable, 24/7
electricity.
Dispatchable on
consumer demand
when they need it, not
the weather.

* Solar-wind are
intermittent, unstable,
unreliable. Solar has
zero output at night
when people need lots
of streetlights, etc.

* Kudos to DOE for
this projection.
Germany case:
* They put lots of wind-solar
since early 2000s, reducing
nuke (& kill it next decade) à
Source:
No Tricks Zone: Analysis:
Adding More Solar, Wind
Power Increases Dependence On
Fossil Fuels, ‘Doubles’
CO2 Emissions
By Kenneth Richard
24 November 2016

* Energy demand high in Oct-
March. Yet solar (yellow)
output is lowest, wind (light
blue) intermittent, on those
months. à
* Germany avoids
deindustrialization & frequent
blackouts due to its coal plants.
Source:
https://www.agora-
energiewende.de/de/themen/-
agothem-
/Produkt/produkt/76/Agorameter/
* Good, smart
move by Sec.
Cusi. Focus on
additional
capacity
especially the
24/7 baseload
plants
It is good that
Sec. Cusi has
saved the DOE
and PH energy
from the “save
the planet with
less coal, more
REs and natgas”
alarmism and
cronyism.

Forcing 30%
natgas from the
current 16%
installed cap.
would mean
natgas plants
will enjoy high
prices bec DUs,
ECs will have no
choice
These are
important. Cheaper
and affordable
electricity for
consumers
because the feed in
tariff (FIT) for
renewables keep
rising.

Solar-wind lobbyists & developers
say their prices will decline bec.
the Sun and wind are free & tech
keeps improving.

The opposite happens. Their FIT
or guaranteed high price for 20 yrs
keep rising. Really bad cronyism.
Among the beneficiaries of expensive electricity via FIT for 20 years:

Project, RE Developer, Owner Inst. cap,
Province MW SOLAR FIT rates, P/kWh 526.4
(a) 9.68 2015, 9.91 ‘16,
TOTAL 10.26 ‘17
721.56
(b) 8.65 2016, 8.89 2017
WIND FIT rates, P/kWh 426.9
Ormoc, Philippine Solar Farm Leyte, 30.4
(a) 8.53 2015, 8.90 ‘16, 9.19 ‘17
Leyte Inc.
(b) 7.40 2015, 7.40 ‘16, 7.72 ‘17
San Carlos San Carlos Solar Energy 23.0
Burgos (Ph. EDC Burgos Wind Power 150 (a)
Ph. 1-C and Corp.
1 & 2), Corporation (Lopez)
1-D
Ilocos N.
Tarlac Solar PetroSolar Corp. 50.1
Caparispisan Northern Luzon UPC Asia Corp. 81 (a)
, Ilocos N. (Ayala) Calatagan, Solar Philippines Calatagan 63.3
San Lorenzo, Trans-Asia Renewable Energy 54 Batangas Corp.
Guimaras Corp. (Phinma) (b) Cadiz Solar, Helios Solar Energy Corp. 132.5
Pillilla, Alterenergy Wind One 54 (b) Neg. Occ.
Rizal Corporation (Perez)
Bangui Northwind Power Devt Corp. 18.9 (a) Cavite Eco Majestics Energy Corp. 41.3
(Phase 3), (Ayala) Zone
Ilocos N. Clark Solar, Enfinity PH Renewable 23.3
Nabas, Petro Wind Energy, Inc. 36 (b) Pampanga Resources
Aklan
Bangui Wind Northwind Power Devt Corp. 33 Corimao, Mirae Asia Energy Corp. 20.0
(Phase 1 & (Ayala): 5.76 2015, 6.01 2016, Ilocos N.
2) and 6.20 2017.
PH’s RE Act of 2008 (RA 9513) has more favoritism and cronyism than RE laws
of other Asian countries, at least as of 2009.

From Vince Perez’ presentation at ACEF, ADB in 2009.
P10.2 B in 2015,
P18.5 B in 2016,
P24.4 B in 2017
and P26.1 B in
2018 projected.

Cornered mostly
by wind-solar
firms.

Same experience in Europe --
more wind-solar installed
means more expensive
electricity. Denmark and
Germany at the top.

Source: http://euanmearns.com
/green-mythology-and-the-high-
price-of-european-electricity/
Aug.17, 2015.
But wind powerhouses Denmark and
Germany are beaten by S. Australia
for having the most no. of wind
plants per hectare. And S. Australia
has the highest electricity rates in
the planet as it tries hard to “save
the planet.”

Power Prices in Wind ‘Powered’
South Australia Double the Price of
Power in Nuclear Powered France
August 13, 2017 by stopthesethings
Another data – subsidies for renewables comprise 60%+ of domestic/household
prices in Denmark and Germany, which make their prices the highest in EU.

Source: http://euanmearns.com/energy-prices-in-europe/
-- Felix WB Fuentebella, “Philippine Experience in Developing Energy Resiliency”,
Asia Cooperation Dialogue, 8 August 2017, Bohol
à Resiliency is important but it should not lead to alarmism which leads to huge
climate loans and public debt.
à ODA climate loans: P95 B in 2013, P98 B in 2014, P173 B in 2015. Loans, not
grants to be paid by Fil. taxpayers, not by the UN, Al Gore or Leonardo di Caprio.
4,000 years data
But climate change (CC) is:
• Cyclical (warming-cooling…),
• Has many precedents, not
“unprecedented”, and
• Natural (nature-made), not man-
made.

http://www.greenworldtrust.org.uk/Science/Images/Main/Warm_p
Temperature reconstruction* for N. eriods.jpg
Hemisphere, 1-2000 AD 700 million years data

Source: Dr. Roy Spencer, Senate EPW Hearing:
“Climate Change: It’s Happened Before”, July 19th http://www.geocraft.com/WVFossils/PageMill_Images/image27
Climate models are
not facts, they are
just guesses.

Models' projections
of "more warming" is
wrong compared with
actual warming since
1975.
https://wattsupwiththat.com/2016/0
7/26/climate-facts-versus-climate-
theories/

Extreme weather
getting “more
frequent”?

No. See Global
Tropical Cyclone
Accumulated
Cyclone Energy
(ACE), 1971 to
2015.
http://policlimate.com/tropi
cal/global_running_ace.pn
“Extreme weather now unprecedented,
result of ‘man-made’ climate change as
we burn more fossil fuels.”
Really?
PH typhoon Nov. 2013 vs typhoon Nov. http://trove.nla.gov.au/
1912 (101 yrs apart), same province
Leyte…

1912 reports on Tacloban storm ‘killing’
15,000 resurface | Headlines, News, The
Philippine Star | philstar.com

30 Nov 1912 – DEADLY TYPHOON.
HOLOCAUST IN PHILIPPINES WASHING…
http://www.bworldonline.c
om/content.php?section=
Nation&title=sc-urged-
compel-denr-and-doe-to-
review-coal-plants-
proliferation&id=147568

à DOE should not give in to these lousy pressures. People who hate coal are
exactly those who hate brownouts even for 1 minute. Coal plants produce about
50% of total electricity supply in the Luzon grid, 48% of supply nationwide.
* Countries
with higher
coal use have
faster GDP gr.

* If “more coal
= more
diseases,
death” is true,
then there shd
be massive
illness, deaths
in Taiwan (3x
PH), S.Kor (6x
PH), Japan (9x
PH), China
(140x PH).

* Reverse is
true. More coal
plants = more
inv, more jobs,
healthier
people.
Conclusions: (1) EPIRA is working
Good news: power generation prices are going down
WESM, Load Weighted Average Price (LWAP), 2011-2016, P/kWh:
• From average P5.37 in 2012 down to P2.81 in 2016.
• Due to expanding supply capacity, mainly from fossil fuel plants.
• There are price spikes, true, and there are also price dips.

Source: Antonio Moraza, Aboitiz Power. Presentation during the Bworld Economic
Forum, May 19, 2017, Shangrila BGC
Electricity Prices/Tariffs ave. excl. VAT, US cents/kWh
Markets Jan. Jan. %
2012 2016 change PH power generation charge,
Japan (Kansai) 24.48 23.32 -5%
Hong Kong 12.88 15.10 +17%
Meralco area, P/kWh
PHIL. (Meralco) 20.26 14.65 -28% 2012 2013 2014 2015 2016
New Zealand 16.18 13.08 -19%
Sri Lanka 19.49 11.13 -43% Jan 5.46 5.79 6.12 4.72 3.92
Singapore 20.06 10.89 -46% Feb 5.58 5.24 5.54 5.24 4.17
Thailand 10.45 9.93 -5% Mar 5.33 5.19 5.21 5.21 4.00
S. Korea 8.91 9.47 +6% Apr 5.66 5.39 5.90 5.41 4.10
Malaysia 11.11 8.83 -20% May 5.60 5.47 5.97 4.81 3.88
Taiwan 8.71 8.73 0%
Jun 6.14 5.66 5.31 4.46 3.72
Indonesia 8.51 7.03 -17%
Jul 6.45 5.33 5.41 4.74 4.06
Source: Intl. Energy Consultants (IEC),
Regional/Global Comparison of Retail Electricity Aug 6.74 5.05 5.64 4.55 3.86
Tariffs, Executive Summary, May, 2016. Sep 5.40 5.17 5.19 4.13 3.94
* Subsidized markets: Indon, Mal, Thai, Oct 5.50 4.68 5.35 4.00 3.89
S. Korea, Sri Lanka, Taiwan. Nov 5.63 5.67 5.11 4.08 3.84
* Unsubsidized and deregulated: Japan, Dec 5.48 5.94 4.94 4.13 3.94
PH, Sing, NZ. HK is unsubsidized but
Ave. 5.75 5.33 5.41 4.62 3.94
unsure if deregulated.
* All deregulated markets experienced
price decline.
Conclusions: (2) RE Act of 2008, RA 9513, is anti-consumers

FiT provision in RE Act of 2008 (RA 9513) is
anomalous:
(1) Guaranteed high price locked in for 20
years despite technology improving fast,
(2) FiT rates rising yearly due to inflation and
forex adjustments,
(3) FiT rates of P8+ to P10+ per kWh for
wind-solar way high compared to current
WESM prices P3+/kWh,
(4) Capacity installations for wind-solar higher
than what was originally allotted,
(5) Even Mindanao consumers, not part of
WESM, not connected to the Luzon-Visayas
grids, been paying since 2015.