FIT on the ground | Inquirer Business

FIT on the ground

Finally, after only about a year of delay, the government just came up with the rates that we, the public, must pay for RE—yes, the well-liked environment-friendly “renewable energy.”

And immediately, of course, the power generation industry sees something wrong in the proposed rates. They say the rates seem to heavily favor certain forms of RE. The rates thus are so high, so unreachable that they seem to be up in the clouds. And in a country like ours, where more than 50 million people are poor, government policies must be firmly planted on the ground.

Tasked by the law to formulate the rates, technically known as FIT, or “feed in tariff,” was the National Renewable Energy Board (NREB).


It recently submitted its proposed rates to the Energy Regulatory Commission (ERC), which promised to study them prior to giving the approval.


For the sake of some boys in the Palace who love playing with PS III, we have a law called RA 9513, or the Renewable Energy Law, since November 2009.

It provides incentives for investments in RE to attract foreign funds, which in turn are concentrated on solar and wind energy.

In other countries, the FIT is generally higher than the rates allowed by governments for power generated from fossil fuel, such as coal and oil.

Such a trend tells us that even foreign governments want to encourage investments in RE, even if consumers must pay the price in the form of higher power rates. They are rich countries like Germany and France.

Anyway, the NREB lined up five RE sources for the proposed rates, namely, hydro, biomass, wind, ocean thermal and solar.

But the NREB proposed rates are much higher for solar and wind RE technologies than, for instance, hydro technology.


If the NREB will have its way, we will pay about P18 per kilowatt-hour (kwh) for solar power, and more than P10 per kwh for wind power.

In comparison, the FIT set by the NREB for hydro is only P6 per kwh.

Yet, for several years now, even way before the RE Law was passed, the Philippines already had a well-developed RE source in hydropower.

Today, hydro accounts for about 32 percent of our total power generation.

In the United States, in comparison, the proportion of RE to total generation is only 10 percent.

In fact, in terms of power rates, hydro can compete head-on with the other energy sources, including the cheap coal, without needing subsidy.

And so why does the NREB, in its proposed rates for RE, seem to favor wind and solar power?

In the power sector, they are saying that the reliability of both solar and wind power is questionable. Power generation from these sources is highly intermittent.

For instance, based on the proposal of the NREB, we can rely on wind power for only 25 percent of the plant’s capacity. For solar power, it is even a lower 17 percent.

Thus, operators must back up solar and wind power with other—and more reliable—forms of power generation, which are really just power from fossil fuel. Yes, oil and coal!

Still based on figures from the NRED, the price that we pay for the “subsidy” or “incentive” or whatever for RE will be substantial—to the tune of P9.4 billion a year.

And so the question is this: Why must we pay P18 per kwh for solar power, when even at present, without the FIT, or the subsidy, or the incentive, or whatever, hydro can deliver the power for only P5 per kwh?

Well, one reason could be the reported $1 billion in investments that are pending in RE, waiting for the FIT. Incidentally, most of them are foreign investments. The proponents have been demanding from the government, ah, shall we say, the “right” FIT.

I think we will still have the second-highest power rates in the whole of Asia for a long, long time.


Despite our pressing problems called street flooding, uncollected garbage and horrendous traffic, the Metropolitan Manila Development Authority (MMDA) would rather rid the streets of smokers.

I am not kidding. While we are caught in bad traffic all over the metropolis, MMDA Chair Francis Tolentino announced that he would want Metro Manila to be…well, smoke free.

And he did not mean that the MMDA would finally do something about the pollution on Edsa, thanks to all those smoke-belching trucks and buses, which reportedly has the highest pollution index in the entire archipelago.

Our hero wants to ban smoking—i.e. puffers of cigars and cigarettes—on the streets of Metro Manila. Hooray!

Quick, somebody please tell the Aquino (Part II) administration that the law (RA 9211) specifies the places where smoking is banned.

They are, for instance, elevators, schools, fire hazard places (gas stations for one), hospitals, airports, train stations, and restaurants (including their kitchens). See, that specific. Good luck scouring RA 9211 for a provision banning smoking on the streets.

Now, reports have it that the MMDA already received P9.5 million from a private American foundation that is known to campaign against smoking.

But it is hard to say whether or not such “donation” was the reason for the MMDA’s vision of a smoke-free metropolis, albeit in the wrong sense.

About four years ago, the World Bank reported that air pollution was the major cause of respiratory and cardiovascular diseases in the Philippines.

A study by the UP College of Medicine also showed that more than 50 percent of the medicines sold in the country are for respiratory ailments.

Environment Secretary Ramon Paje himself has been insisting that motor vehicles are the main culprit behind the air pollution in the metropolis.

Because of the horrendous traffic, stranding all those thousands of vehicles on the streets, the pollution index actually goes up during rush hours—or precisely when a lot of people are out on the streets, perhaps waiting for their ride home.

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And MMDA just has to run after smokers.

TAGS: Health, Laws, MMDA, Philippines – Metro, pollution, smoking

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