Renewables in peril

It seems, even before it could comfortably take off, it will be shelved – or just hibernate.

We’re talking here about the government’s initiatives under the National Renewable Energy Program and the Renewable Energy Act of 2008 to promote more installations of solar, wind and other alternative non-fossil energy sources into the main grid.

This year, the Department of Energy announced the commissioning of over 600 megawatts (MW) of additional power generation facilities using wind and solar energy.

To entice investors to finance the construction of these electric generation plants, the DOE devised a feed-in-tariff (FIT) rate scheme that guaranteed renewable energy (RE) start-up companies of guaranteed income as well as recovery of all expenses.

Investors were also given generous incentives including tax holidays, at the time when oil prices were not going lower than $100 a barrel, an addition of about two centavos for every kilowatthour of electricity to the cost at that time of fossil-fired electricity seemed fair in the spirit of upholding ideologies like green Earth, cleaner air and sustainable energy.

But now that oil prices have dropped to as low as $60 per barrel, such idealism will seem difficult to swallow in the face of losses that the government could incur to support the FIT rates given to RE companies.

At worse, the energy department will have to face an irate public that will not be able to accept why they have to pay for higher electricity rates “just because” the cost difference of renewables versus oil has become too contrasted.

Not rosy

If it’s any comfort, the good news is that the contribution of renewables in the overall power grid mix is still negligible and would therefore cause as much pain as what other developed countries like the US and those in Europe will be experiencing.

America and Europe have been aggressively moving into renewables in the last decade, so much so that more than half of its new generating plants on stream this year are running on RE. At today’s oil price levels, it will really test the resolve of Americans and Europeans just how committed they are to sustainable energy.

In the Philippines, what will likely happen given the current uncertainties in the global energy environment, is a slowdown in the approval of new RE projects, supported by a hesitation by RE investors in this field, even if the technology for solar and wind energies have significantly dropped over the last decade.

Even the national RE program will have to be downscaled, and much as true-green environmentalists will find it difficult to accept, the future of renewables not only in the Philippines, but all over the world will not be as rosy as a year ago.

Climate change

The big question now being fervently debated by global environmentalists is whether the world will be able to withstand the worst effects of climate change, which is attributed to the continued use of fossil fuels.

Incentives granted to RE investors will need to be restructured to make them competitive to current oil price levels if the threat of global warming will be taken seriously by developed economies.

The other side of the equation will be dependent on the Middle East oil cartel. By simply cutting its total production to stave off recent huge quantities of US oil production, which is coming from shale using the latest fracking technology, the OPEC cartel can once again show the world that it can dictate oil prices.

But that’s an iffy situation, especially since many of the OPEC members are currently not in favor of reducing production. However, with oil prices now slashed by more than 40 percent, what they are earning at the moment may convince them to turn off some valves.

Oil will continue to be a global commodity that plays an important role in nations’ economy and politics. These are interesting times indeed as the world seeks to stabilize a trade that is going through some major changes.

Post review of the 2014 National Collegiate Championship

The De La Salle Green Archers, defending national collegiate champion, swept the Elite Eight stage beating tough CESAFI champion SWU Cobras and perennial Cebu top team University of Visayas Green Lancers at Cebu City.

DLSU continued its roll in the Manila leg with consecutive wins over NCAA champion San Beda College Red Lions and FEU Tamaraws, the erstwhile Green Archers’ tormentor in the UAAP tournament.

The San Beda College Red Lions and University of San Carlos Warriors (CESAFI runner-up) tied with one loss each at the end of the Elite Eight games. The Red Lions advanced to the championship series of the Premier Four by virtue of its win over the Warriors at Cebu City.

The USC Warriors settled for the battle for third with the UV Green Lancers. The Green Lancers made it to the Premier Four stage with a better quotient compared to FEU Tamaraws.

The games at the Premier Four stage included one game for third and fourth place between UV Green Lancers and USC Warriors. Both teams were delighted to be flown in from Cebu and be part of the finals of the national collegiate games.

The best of three championship series was between unbeaten national defending champion DLSU Green Archers and NCAA champion San Beda Red Lions. DLSU was gunning for a back-to-back national championship, while SBC was aiming for its first national title.

The Champions League (PCCL) National Collegiate Championship is sponsored by media partners ABS-CBN and Philippine Star, Phoenix Petroleum, Molten Balls, Fil-Oil Flying V Sports, Fog City Creamery and Foccacia.

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Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. For a compilation of previous articles, visit www.BizlinksPhilippines.net.