Rules on renewables costly

By Alena Mae S. Flores – December 21, 2017 at 07:20 pm

Power retailer Manila Electric Co. warned that consumers would shoulder more than P100 billion annually by 2030 under the government’s mandate of a 35-percent renewable energy share in the fuel mix as contained in the draft renewable energy portfolio standard rules.

Meralco cited the simulations of the Economic Power and Development Program entitled ‘Filipino 2040- Energy: Power Security and Competitiveness’ which compared policy of a 30-percent share against a policy that “favors increased temporary utilization of lesser cost resources but takes into  environment costs.”

“Their simulations show that maintaining a 30-percent RE share will cost consumers nationwide in the order of P100 billion more annually by 2030. At the 35-percent target share, contained in the draft RPS rules, the additional costs to consumers will be even more substantial and should give policy-setting cause to step back and more carefully consider the economic implications of the proposed targets,” Meralco said in a letter to the Energy Department.

The paper noted that there would be a better alternative to the current policy of the government of mandating a 30-percent share of renewables and that optimal fuel mix is not constant over time.  The report, as cited by Meralco, also  mentioned that government should exploit “less costly resources while taking environmental costs into account to bring the price of power down.”