Choosing our own poison
BY PHILIP S. CHUA M.D FACS, FPCS
The cost of ‘clean and green’
‘Alternative energy plants are much more expensive to run.’
WE know where the global environmental group Greenpeace is coming from. So it comes as no surprise that it is calling on President Aquino to once and for all stop entertaining the nuclear energy option. Greenpeace is less than honest, however, in saying that "clean, green and renewable" is the answer to the country’s energy problem.
First, renewal energy plants have to be backstopped by traditional so-called base plants, that is, big power generators that run 24 hours a day. This is so because renewable plants are not dependable,
Wind turbines stop when there are no winds. Solar cells do not work at night or during cloudy days. Biomass plants have to scramble for fuel during the phase of the farming cycle when there are no agricultural wastes.
Because of this, even countries with strong environment protection laws continue to require that every megawatt in demand must be matched by a megawatt of generating capacity from traditional plants.
(Geothermal plants are the exceptions, but these cannot strictly be described as "clean and green.")
Second, alternative energy plants are much more expensive to run than hydro as well as thermal plants using fossil fuel like coal and bunker fuel.
The current average generating charge is about P6 per kilowatt-hour, up sharply from around P4.50 before the hydroelectric dams went idle because of the El Niño phenomenon.
What’s the cost of renewable energy? At present there are no firm figures, but the cat will be out of the bag soon when the National Renewable Energy Board presents the so-called "feed-in rates" (FITs) for approval of the Energy Regulatory Board. The FITs is the rate all power users will be charged for renewable power fed into the grid.
Renewable energy proponents cite figures ranging from P7 to P8 per kilowatt-hour. But by most estimates, these are fairly conservative. Solar probably cannot cost less than P10 per kilowatt-hour.
It is precisely because of this lack of competitiveness that the Renewable Energy Law provides for generous tax breaks for RE plants. These range from duty-free importation of capital equipment to income tax holidays for the first seven years.
Our guess is that even with the tax breaks, the RE plants cannot sell their output at less than P6 per kilowatt-hour.
Let’s see how the enthusiasm for renewable energy can be sustained when consumers see how "clean and green" translates into actual pesos and centavos in their billings.