• Shooting yourself in the foot, again – renewable energy

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    MIKE WOOTTON

    MIKE WOOTTON

    To shoot yourself in the foot is to be the author or instigator of your own misfortune. This is something that happens frequently in the Philippines, in fact it is common practice. The question is, of course, whose foot is it that gets shot. It is rarely the foot of the shooter unless you count voting in elections when many people shoot themselves in the foot by voting in exchange for payment—selling their vote.

    Last Friday there was a groundbreaking event for a small hydropower project in Palawan. It’s necessary to add the word “small” to the description lest people think that something like the Chinese Three Gorges dam project is to be thrust upon the Palawan eco-system! It is the first of three small hydro projects to be developed; all are run of river, meaning that the flow of the river is diverted down a pipe [a big one that you could drive a truck through]to spin turbines that produce electricity, after which the water is returned to the river.

    In order to ensure that the water in the river keeps flowing over the years it is necessary to preserve the tree cover in the watershed, the catchment area.

    The electricity that will be produced from these schemes will be cheaper for the consumers of Palawan, and because no subsidy is needed to support the cost of imported fossil fuel, all consumers in the Philippines will pay a little less in their mandatory contribution to the Universal Charge/Missionary Electrification Fund.

    We have, therefore, three projects, all of which will contribute to maintaining the pristine Palawan ecosystem. That should reduce the need for exposure to volatile international fossil fuel markets and foreign exchange risks in importation, which will, in turn, cut the cost of electricity and contribute to the government’s targeted reduction in carbon emissions.

    What is more, the development will not cost the Philippine government a single centavo and all the risk; if it stops raining and the water no longer flows, if the construction costs balloon out of all proportion, if the scheme is blown up by rebels, or if the construction just collapses because the ground is not strong enough to bear the major structures, is on the shoulders of the developer.

    So wouldn’t you think that this is a good thing which should be supported by all stakeholders and, which, everybody should appreciate? It’s like a gift isn’t it? Needless to say, the schemes also produce much needed additional electricity generation.

    The interesting thing is that it has taken the developers seven years to get to the point of breaking ground in this first of three projects, one initially identified as technically feasible 24 years ago by consultants working for NPC.

    To explain why it took 17 years from initial identification to the start of pre-development work by the current developer is not too difficult; oil prices were low, thus, the cost of oil-fired power was cheaper, there was little environmental consciousness and there was the mess and confusion in the power sector caused by the disastrous EPIRA. But by 2008 there was at last a renewable energy law and encouragement, albeit heavily politicised as usual, for renewable energy development—the oil price had risen too and showed distinct signs of increasing even further.

    But still, seven years is a long time to get from deciding to have a look at it, to the point of actually breaking ground. The books say it should take about four years on an international average. But the books are wrong.

    It takes more than four years particularly in the Philippines, but also elsewhere, and this, in large part, has to do with the heightened environmental consciousness of these days and the nightmare permitting and regulatory requirements.

    All the activities in pre-development of a small hydro plant for, in the Palawan case, 6.8MW are the same, exactly albeit the numbers are bigger, as for a hydropower project of say, 680MW, which would produce much more income and by implication profit for the developer. So to take on a small hydro project is to take on a lot of work in exchange for a proportionately relatively small return.

    This is not to say that the developers of the Palawan hydro projects are some form of charity. It is to point out that what is being done is a good thing for the Philippines power sector and the electricity consumers of the nation and that because of that simple argument it might be expected that the road to construction and commercial operation could be smoothed out and made easier.

    If it were smoothe out and made easier, then we would see a lot more renewable energy developments, less reliance on volatile oil or coal international markets, less carbon emissions and lower cost electricity with development risks taken by investors and the private sector.

    Isn’t it right then that everybody should get behind the renewable energy initiative and try to help, rather than hinder the “lunatic” entrepreneurs who are actually prepared to tackle this challenge with their own money and their own time, effort and knowledge, in order to bring about cheaper power and protect the environment?

    Otherwise it will be just yet another example of shooting yourselves in the foot! Let’s stop finding reasons to not do it and use our ingenuity, instead of finding ways to hinder development, to actually make it happen for the benefit of all.

    Mike can be contacted at mawootton@gmail.com

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