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Tuesday, September 27, 2022

Advocates claim solar PV Plants in Mindanao feasible despite low FiT

David A. Tauli, engineering consultant from the Office of Rep. Florencio T. Flores, Jr. (2nd District, Bukidnon) said this is attainable even if the National Renewable Energy Board only set 100MW as the initial installation target for solar PV plants all over the country under the Renewable Energy Law of 2008 (Republic Act  No. 9513).


“The FIT for solar PV approved by the ERC (9.68 pesos/kWh, compared with the 17.95 applied for by the NREB) cannot make any commercial solar PV project viable. No private sector project can be implemented with such a low level of FIT,” Mr. Tauli noted.


Mr. Tauli said solar PV advocates will have to apply to the ERC for higher FIT (more than 15 pesos/kWh) that would make commercial projects viable.


“But we cannot do that under the PNOY government, whose energy officials appear to be hostile to solar PV,” said Mr. Tauli. “For now, the only grid-connected solar PV projects that can get done are those that can obtain subsidies or grants, which will have to come from foreign countries or international agencies because large amounts of grants are required.”


Mr. Tauli recently attended the National Renewable Energy Program (NREP) Review and Workshop, held April 18-19, 2013, in Baguio City under the aegis of the National Renewable Energy Board to come up with revised projections of renewable energy projects for private sector investments under RA 9513.


“I believe these are more realistic targets than whatever numbers the NREP Workshop came up with,” he said. “Theirs may be more realistic than my numbers, but also hopeless. I really believe the projections below for solar PV in Mindanao are attainable.”


Mr. Tauli identified the following solar PV projects in Mindanao set for development from 2013-2023:

·         40-MW solar PV project of the Marawi City Government. Total project cost is estimated at PhP 5.25 billion. Private sector investment will be around PhP 3.22 billion, with the balance to be sourced from local LGU equity in the form of a grant from an Arabian government or donor agency in the amount of PhP 2.03 billion. The project will be operated conjunctively with one 40-MW unit of the Agus 1 hydro electric power plant to provide peaking capacity for consumers connected to the Mindanao Grid. The project is designed to be given the FIT of PhP 9.68 PhP/kWh approved by the ERC. Target date of operation is 2016.

·         10-MW embedded solar PV project in General Santos City of the Mindanao State University to be used primarily for applied research by MSU. The 10-MW solar PV plant will be used primarily for applied research by MSU. It is estimated to cost 1.31 billion pesos, with private capital contributing 0.80 billion, and MSU contributing 0.51 billion pesos to be sourced from grants. The project is designed to be given the FIT of 9.68 PhP/kWh approved by the ERC. Target date of operation is 2016.

·         100 MW embedded solar PV power plants in various electric cooperatives and private distribution utilities. This assumes that an increased FIT for solar PV, in the amount of 15.94 pesos per kilowatt-hour, will be approved in 2016, making it financially feasible for the private sector to invest in utility-scale solar PV projects. 100 MW will be installed in Mindanao to partially meet the lack of energy supply to distribution utilities. Target date of operation is 2017.

·         450 MW embedded solar PV power plants in various electric cooperatives and private distribution utilities. It is assumed that grid-parity with diesel power plants will be attained in 2022 by solar PV. If so, solar PV power plants with a total capacity of 450 MW will be installed in Mindanao to replace around 200 MW of diesel power plants that are being operated in that year as base-load power plants.



When the NREB filed on May 2011 with the Energy Regulatory Commission the application for Feed-in Tariff (FiT) rates for various technologies, the proposed FiTs in pesos per kilowatt-hour for the various technologies and the initial installation targets in megawatts were as follows: P10.37/kWh for Wind @ 250MW; P7.00/kWh for Biomass @ 250MW; P17.95/kWh for Solar @ 100MW; P6.15/kWh for Mini Hydro @220MW; and P17.65/kWh for Ocean @10MW.


“Those were realistic targets for each technology under the respective FiTs proposed because the FiTs would enable investors to earn a commercially viable rate of return for the power plants that would be constructed,” Mr. Tauli said. “However, the Energy Regulatory Commission subsequently reduced the recommended Feed In Tariff rate to only P9.68/kWh for solar PV power plants, rendering the installation target immaterial.”


Instead, Mr. Tauli advocates Public-Private-Partnerships (PPP) since these would enable government agencies, especially local government units (LGUs), to access low cost ODA funds which would make the solar projects feasible.


“For instance, for the 40-MW solar PV plant in Marawi that we are still pursuing, we will have to get a grant of around two billion pesos. We believe the Arabian countries can make such a grant available for a project in the ARMM,” he said.


Mr. Tauli concedes that because of the need for subsidies it will take some time to put a solar PV project on the ground. While continuing to pursue solar PV projects, he also advocates getting hydro projects implemented by provincial, city and municipal governments.


“After the elections, we will work on getting the Lanao Norte provincial government to implement the Agus 3 hydro (225 MW) and the Bukidnon provincial government to implement the Tagoloan 2 hydro (68 MW), and on other LGUs to implement small hydro projects (10 MW or smaller),” he said.  “This is the only way to getting enough power plants implemented to meet the long-term requirements of Mindanao, while keeping the rates low (four pesos per kWh or less).”


A US-based Filipino company providing renewable energy solutions shares Mr. Tauli’s optimism about solar energy for Mindanao.


“The Department of Energy’s thumbing down solar energy as solution to the power crisis in the southern Philippines is not a hindrance or a barrier in the pursuit of a lasting and ultimately cheaper power sources in Mindanao,” said Engr. Winston Lorenzana Mendoza, chief executive officer of Mendoza Solar, LLC in a media statement.


Mendoza Solar, LLC is an energy company registered in California and Nevada, USA. It provides renewable energy solutions for all types of property owners.


Its Philippine subsidiary, Lim Solar Philippines, promotes portable fuel cell electric systems that address base energy needs, especially for off-grid remote areas. It currently has a solar integration and development projects with De La Salle University, Subic Bay Metropolitan Authority and Camp Aguinaldo, among others.


Another company under the Mendoza Group, the Lorenzana Energy International has solar integration and development projects in Malaysia, Hawaii, Guam, California and Nevada.


“Solar energy as well as other renewable energy sources are very appropriate for Mindanao if we look at the long term and the impact of climate change, which exacerbates natural phenomenon such as typhoons and storms,” Mr. Mendoza said.


For the last several years, Mindanao is now the favorite of natural disasters, whose impacts were exacerbated by climate change-inducing fossil fuels. We can no longer afford to let Mindanao suffer. Solar energy is abundant in the island and it provides clean energy, he noted.


Mendoza said Lim solar can offer electric cooperatives in Mindanao very minimal prices for solar power as well as 100 percent financing for residences and small businesses.


“For Mindanao, I will offer P7.47 per KWh to the electric coop and large megawatt level users and P8.50 to small users. I will also straight finance the residential and small businesses,” he said.

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