Gov’t warned against flip-flopping stand on RE

The European Chamber of Commerce of the Philippines and the European National Chambers have expressed apprehension over the stand of the Board of Investments (BoI) regarding the country’s push for renewable energy development.

They said inconsistent policies within the government would scare off potential investors.

In a joint statement issued Tuesday, the two business groups said the BoI’s call to delay the implementation of RA 9513, or the Renewable Energy Act of 2008, would deal a huge blow to the country’s pursuit of new investments.

While agreeing with the BoI that the country’s power rates were already too high to be raised further, the European businesses warned that a change in government directions would send the wrong signal to investors.

It could further cement the perception that the government was inconsistent in its policies and was apt to change its mind in the middle of the game.

The groups noted that it was the BoI’s responsibility to assure investors that policies would be the same all throughout, whoever was in power. The government had already announced that it would push RE development and had even invited investors to enter the industry.

“If the administration were to change the policy soon after that statement, it loses the trust from not only foreign investors in the power sector but also in other sectors. Lack of consistency will definitely make the Philippines less competitive,” the joint statement read.

The groups said the main focus should not be on the immediate rate impact but on the long-term benefits to the country of increasing the share of RE in the power mix.

The additional 12 centavos per kilowatt-hour to be added to power rates as a result of the feed-in tariff (FIT) scheme would be more than offset by the number of jobs that a strong RE environment would create and the additional investments that the country would be able to secure in the RE space, they said.

In the long run, as RE technologies mature and RE rates approach grid parity, or levels matching those currently being charged for power injected to the grid, the country should already be reaping the benefits of reduced carbon emissions, higher efficiency and, ultimately, lower costs.

“We urge the government neither to turn back on this sustainable path to economic development, nor to be distracted by the issue of rate impact to electricity consumers. The experience of European countries like Germany and Denmark are shining examples of how the feed-in tariff mechanism successfully increased deployment of renewables, created jobs for its people and reduced carbon emissions,” the groups said.

“It has also shown that promoting the different technologies makes for increased efficiency, thus reducing costs. Finally, this will also lead to consumers generating energy for their own use, i.e. outside the scope of the feed-in tariff,” they added.

Instead of delaying the implementation of the law, the groups suggested that energy conservation and energy efficiency measures be practiced more strictly, to cushion the additional charge that would have to be borne by power users once the FIT scheme takes effect.