Consumer group wants FIT-All stopped

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CONSUMER group CitizenWatch called on the Aquino administration to immediately stop the implementation of feed-in-tariff allowance (FIT-All) in order to prevent the abrupt increase of electricity rates.

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In a statement, the group said a power rate hike will severely hurt consumers.

Under FIT-All, producers of renewable energy will get incentives through the increase of monthly rates, a reward allowed by the Aquino Administration. The FIT-ALL concept encourages players in the energy sector to tap environment-friendly sources of electricity.

The use of wind, solar, and small hydro power projects as sources of electricity are given incentives in the form of FIT rates, which will be collected by the National Transmission Corporation (NTC) from consumers.

The Energy Regulatory Commission approved the collection of FIT-All in March, translating into an increase of eight centavos per kilowatt-hour in power rates starting April, a time when power rates shoot up because of higher demand.

This means an additional monthly bill of P16 for a small household that consumes 200 kWh a month.

CitizenWatch questioned the timing of the scheme’s implementation, saying the use of electricity peaks during the hot summer months.

“We understand the clamor for cleaner energy, but we must strike a balance between this and the need to have enough energy to support the country’s development,” CitizenWatch Secretary General Wilford Wong said.

Wong noted that the energy rates in the Philippines are already one of the highest in Asia, making it a big burden both to the consumers and investors.

“The push for renewables is understandable in the context of climate change, but we’ve seen from the Negros experience that it’s far from a straightforward solution to our energy needs, especially for a developing country like the Philippines,” Wong said.

He warned that the expected high consumption of electricity starting April may lead to the entry of renewable power to alter the frequency of electricity and result in grid instability, erratic power supply, and brownouts.

This would serve as basis for the government to catch up in putting up much needed power plants, according to Dindo Manhit, president of private think tank Albert Del Rosario Institute (ADR Institute).

“The upward economic trajectory that our country is enjoying puts more pressure on the supply of reliable energy and growth will stagnate once this need is not met,” Manhit said.

Wong said CitizenWatch is strongly prodding the Department of Energy (DOE) “to do an inventory on the reliability of each renewable power plant in preparation for the summer months and to educate the public on energy saving tips to mitigate the impact of expected rate hikes.”

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1 Comment

  1. Kris Balitbukel on

    With a FIT of P 8.69/kwh for solar and P 7.40/kwh for wind, consumers pay an extra P 4.49/kwh for solar and P 3.20/kwh for wind than what we would otherwise pay a coal plant at P 4.20/kwh. The higher cost is justified from the claim that renewables avoid CO2 emission that a coal plant emits at the rate of about 1000 tons per 1 million kwh. Avoiding CO2 emission is good but is the extra cost reasonable? The cost of CO2 emission from a coal plant is about P 47,000 per 1 million kwh if CO2 emission costs $ 1 per ton. Stated another way, it costs the equivalent of P 0.47/kwh for every $ 1 per ton cost of CO2 emission. Because solar and wind avoids CO2 that would otherwise come with coal generation, we are effectively paying the equivalent of $ 95.53 per ton of CO2 avoided with the use of solar (P 4.49/kwh divided by the rate of P 0.047/kwh for every $ 1 per ton) and $ 68.09 per ton with the use of wind (P 3.20/ P 0.047). Against a backdrop that in Europe, Certified Emission Reductions are being traded at about $ 5 per ton, where is the moral ascendancy in paying solar generators investors $ 90 per ton or wind generator investors $ 62 per ton more than what they can otherwise earn in Europe? With policies such as the generous payment for FIT, it is not surprising that we have the highest power rates in Asia.