The quest for cleaner energy

Is the country prepared to say no to coal power?

The Department of Energy does not think so, at least not yet. Energy Secretary Al Cusi has said he does not agree to the idea of implementing a moratorium on new coal-fired power plants as proposed by some sectors despite the country’s commitment to the United Nations to significantly slash its greenhouse gas emissions by 2030.

According to Cusi, coal still serves a purpose for baseload and a moratorium on any technology would be a disservice to the country’s energy security, adding that the contribution of carbon emissions is not only from coal plants, but also from the transportation sector.

Based on data from the DOE, coal represents 52.1 percent of the country’s power generation mix in 2018, up from 49.6 percent in 2017. There are at least 16 coal-fired power plants currently operating in the country. The DOE has adopted a technology-neutral policy, Cusi has said.

At the recent meeting of world leaders for the UN Climate Action Summit, 16-year old Swedish environmentalist Greta Thunberg took centerstage when she condemned what she believes is lack of action on the part of leaders around the world to put a stop to climate change.

Last month, these world leaders gathered to discuss strategies to mitigate climate change and to further their commitments to reduce greenhouse gas emissions.

Back home, a week-long Global Climate Strike, a youth protest against fossil fuels, was launched in the Philippines and was carried out in 120 countries around the world.

Here, the Power for People Coalition (P4P) conducted the very first National Day of Action Against Coal during which they urged financial institutions go stop funding coal power projects. The coalition includes Murang Kuryente, the Philippine Movement for Climate Justice, Sanlakas, and Living Laudato Si.

They claim that coal power is the biggest culprit of greenhouse emissions and climate change, and as such is being disfavored in many advanced economies around the world.

P4P spokesperson Gerry Arances said they are asking these financial institutions to become responsible corporate citizens and stop funding coal, the source of high power rates, much environmental damage, and a lot of health issues in coal-affected communities. The group also urged power distributors to start patronizing cleaner energy sources and to bring the issue of renewables closer to consumers.

Rodne Galicha, lead convenor of the Catholic climate movement Living Laudato Si Philippines, urged Filipinos to use the power of their peso in choosing to invest in enterprises that are sustainable and environment-sensitive, and for financial institutions to make greener investments.

Until such time that the country has enough affordable cleaner power sources, it may indeed be hard to say no to coal. Fortunately, many power companies have chosen to develop clean coal power plants while simultaneously pursuing renewable energy projects.

Isolated case

It will be recalled that the Supreme Court in a recent decision said that all power supply agreement (PSA) applications submitted by distribution utilities to the Energy Regulatory Commission on or after June 30, 2015 shall undergo a competitive selection process (CSP) based on the DOE’s 2018 circular.

Under the CSP, electric cooperatives and distribution utilities must conduct a bidding for the contract of their power supply to ensure transparency and fair competition.

The public saw the beauty of the CSP when Meralco recently bid out thousands of megawatts of supply contracts over many years. Different power generators submitted their proposals and the best prices and best offers were selected in what looked like a fair and transparent process. Cheapest price and the best terms mean a big win for consumers. 

Meralco said that its customers are expected to save over P9 billion annually for 10 years or around P0.28 per kwh from its first successful CSP covering 1,200 megawatts of brownfield supply. The resulting prices were significantly lower than Meralco’s average generation cost today of around P5.88 per kwh including VAT. Meralco’s third party bids and awards committee declared Phinma Energy Corp., San Miguel Energy Corp., and South Premiere Power Corp. as having offered the least cost rates.

However, there are still baffling results coming out of CSPs elsewhere. Take the case of Sorsogon Electric Cooperative (Soreco) which recently conducted its CSP recently. According to reports, there were three competitors: AP Renewables Inc. (APRI) which offered P5.85 per kwh, Biliran Geothermal Inc. (BGI) which submitted a bid of P6.11 per kwh, and GNPower which offered P6.53 per kwh. It would have been an easy decision if Soreco managers had put the welfare of the consumers of Sorsogon on top of their priorities. 

The reports revealed that Soreco disqualified the lowest-priced supplier on a technicality, skipped the second placer and awarded it to the supplier who submitted the highest price, leaving BGI officials scratching their heads.

Aside from price, the plants offered by APRI and BGI are from their renewable geothermal power plants located in Bicol, which are nearer, cheaper and tax-free. Yet Soreco chose a coal power plant located hundreds of kilometers away. The difference in the cost will definitely be felt by Soreco consumers.

The Soreco experience should, however, be taken as an isolated case and should not diminish nor should it be allowed to reduce the worth of CSP. And that is why it must be looked in to immediately.

As pointed out by the Supreme Court in its ruling, the requirement for a competitive public bidding under the CSP is primarily aimed at ensuring a fair, reasonable, and cost-effective generation charge for consumers under a transparent power sale mechanism between gencos and DUs. For his part, DOE’s Cusi noted that the CSP will ensure transparency and fair competition in the procurement of power supply, and will protect the consuming public from power rate spikes, pass-on charges, and avert predatory practices.

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