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Salceda says renewable energy portfolio expansion ‘crucial’ as energy reserve thins over Luzon; House tax chair says RE to help stem ‘uncompetitive practices’ in power generation; House tax chair proposes inter-agency ‘Energy Investments Review Board’ instead of separate agencies processing separate applications

October 21st, 2021

House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) says that the country needs more renewable energy sources “especially solar and wind power” following an anergy reserve thinning this week that resulted in the National Grid Corp. of the Philippines (NGCP) issuing a yellow alert beginning noon until 3:45 p.m yesterday. The warning was issued after five power plants with a total capacity of 1,230 megawatts (MW) went on forced outage.

“Coal prices are up, and coal accounts for as much as 52% of the country’s energy. That’s not a diverse portfolio at all. What’s more, coal is extremely easy to game if you are a generation company. If you cite ‘maintenance issues,’ or even a ‘lack of supply,’ you could manipulate power generation, and thus prices,” Salceda said.

“Furthermore, even when we produce our own coal, much of it is not at the quality required to fuel power plants, so we import, and are basically dependent on the peregrinations of coal prices.”

“What we need is more indigenous renewable energy. I particularly favor solar and wind because generations companies cannot game them as much. You can’t stop the wind or the sun from producing energy, so it makes it very difficult for companies to manipulate supply. It’s almost out of their hands, really,” Salceda added.

“As a result, these sources can also threaten to undercut uncompetitive practices in non-renewable sources, since there would be cheaper energy sources available at the spot market,” Salceda explained.

Local permits, land conversion hampering solar, wind permits

Salceda said, however, that government offices have to deal with applications for renewable energy plants faster.

“For solar, which requires a significant land area, and in some cases for wind, you need land conversion. That tends to be a problem, especially since you are dealing with the Department of Agriculture, the Department of Environment and Natural Resources, and the Department of Agrarian Reform.”

“The Energy Virtual One-Stop Shop (EVOSS) helped significantly cut processing time and made compliance easier, but the capacity of agencies to process conversion applications from energy companies isn’t there yet,” Salceda added.

“I think the solution is not to approve them as separate agencies with separate requirements, but to compose a committee for land conversion for energy projects so that they can be discussed collaboratively.”

“The model we can follow is that of the Fiscal Incentives Review Board, which basically allows many agencies to weigh in on an application, instead of allowing each of them to delay the investment,” Salceda said.

“The problem with the current binary land conversion process is that you can either use it for agricultural purposes, or you use it some other way, in this case energy. In many cases in the world’s best RE producers, land is used for both. In California, they cover irrigation canals with solar panels so that evaporation is reduced, and water is saved, while also producing energy. A collegial approval system will help synergize similar ideas.”

“For certain big projects, we can have it approved at the top committee level. We can have a technical committee under that Board for smaller projects. I think it will work better and faster.” #

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