New DOE policy to require development of renewable energy sources

Renewable Energy Act of 2008 obliges the power industry to source from eligible RE resources. (file photo)

Distribution utilities like the Palawan Electric Cooperative (Paleco) and other power industry players would soon be required to tap renewable energy (RE) resources in its locality.

This will be made possible once Energy Secretary Alfonso Cusi approves the Renewable Portfolio Standards (RPS), a policy mechanism which obliges the power industry participants to source a percentage or all of their energy requirements or supply from eligible RE resources.

The National Renewable Energy Board (NREB) is on its final leg of public consultations for the Philippine RPS Rules for Off-grid Areas, with its final draft up for submission to Cusi next week.

Once approved and implemented starting January 2018, NREB Chairman, Atty. Jose Layug, Jr., during the Puerto Princesa public consultation Thursday, October 5, said Paleco will be mandated to source power from renewable energy.

“Palawan has a lot of land, so there is definitely [a] potential to put up renewable energy here. Ironically, I’ve not seen any. With all those rules, we hope Paleco will start contracting because it will become a mandate,” Layug said.

Eligible RE resources are biomass, waste to energy technology, wind, solar, hydro, geothermal, among other emerging RE technologies.

“You have [a] power problem here in Palawan. Now it’s the right time to go for renewable energy. It’s cheaper, it’s cleaner,” he said.

The Palawan Island Power Development Plan (PIPDP) 2015-2035 points to renewable energy as the cheapest source of power for the province. The provincial plan has identified potential run-of-the-river hydropower projects in Palawan with an estimated capacity of 182.47 megawatts, which can provide energy supply of up to 959 gigawatt hours.

According to Layug, the shrinking cost of renewable energy, as developers confirmed, makes it more viable than before. “It’s high time that we protect our environment. There’s no reason for the high cost of electricity,” he said.

For instance, he added, the solar power is now “much more competitive” with its current pricing that ranges from P8/kWh to P11/kWh, way cheaper than Paleco’s current P12/kWh diesel-produced power.

“This is what we hope for, especially in Palawan,” he said.

In case RE is not available in an off-grid area, he added that the RPS directs the mandated participants to connect with the RE market and buy RE-produced electricity for compliance purposes, without passing on the additional cost to the consumers.

Layug said the RPS gives a three-year transition to mandated players, with full compliance expected starting 2019. The grace period allows the mandated participants to prepare, specifically in procuring and commissioning of required RE sources.

Violating key officials of distributor utilities may face administrative liability, entailing a penalty ranging from reprimand to revocation of license with correspond fine ranging from a minimum of P50,000 to P500,000, depending on the gravity of the offense.

They may also be criminally liable for violating the RE Act, and suffer the penalty of one-to-five-year imprisonment, and/or a fine ranging from a minimum of P100,000 to P1-million upon the court discretion.

Paying the fines, however, cannot be passed on to the consumers, Layug added.

Since only Paleco representatives and not its top-ranking officials were able to attend the public consultation, Layug said he will do the same presentation in the power distributor’s office.

“The most important party for the RPS off-grid is the DU (distribution utilities) or the cooperative because without them how will we implement this?” Layug said.

Tasked to implement the mechanisms set under the nearly a decade-old RE Act, the NREB will help Paleco and other off-grid power utilities in ensuring its readiness in incorporating RE in its energy mix.

“When you do some planning for renewable energy, the coops and [other] DUs need to make sure that their transmission lines, distribution lines are also ready,” Layug said, citing the case of unreadiness of Negros.

“Let’s make sure that can be addressed before you start signing up PSAs (power supply agreements).”

The NREB, along with the DOE Renewable Energy Management Bureau, will be conducting other public consultation in Oriental Mindoro (Oct. 12), Cebu (Oct. 19) and Cagayan de Oro (November 9).

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