The
Philippines will be the first developing
country to submit its international commitments on what it will do to ease
climate change.
It is committed to submit an
Intended Nationally Determined Contributions (INDCs) to the 2015 United Nations
Climate Conference by June—the first pledge by a developing country.
With no significant deposits
of fossil fuels, the Philippines has few competitive advantages in clean and
renewable energy such as geothermal, hydro, wind and solar.
Tapping these alternative
energy sources will lessen its continued reliance on imported fuel that has
made Philippine electricity rates among the highest in Asia.
About 70 percent of
Philippine electricity is currently generated from fossil-fuels; 90 percent of
coal and oil are imported.
The World Wide Fund for
Nature (WWF)-Philippines believes that increasing support for renewable energy
will lower Philippine electricity prices.
The Department of Energy
(DOE) has recently supported an increase in the installation targets for solar
energy under the Feed-in Tariff regime.
Under the Feed-in Tariff
system, renewable energy projects are guaranteed a rate for the electricity
they produce per kilowatt hour that will be held constant for the next 20
years. The Energy Regulatory Commission will conduct periodic reviews to adjust
rates for foreign exchange and inflation.
This means that the price of
electricity from renewable energy will continuously become cheaper over time.
Unlike fossil-fuels where VAT
is applied to add to existing cost, renewable energy has been given a zero
percent VAT rate.
The WWF says the DOE now has
the “prime opportunity” to generate an INDC by increasing the share of
renewable energy in the country’s power mix.
The INDCs are country-wide
climate change mitigation and adaptation commitments that will be submitted to
the climate conference to be held from November 30 to December 11 in Paris.
World leaders gathered in Lima last December for the 20th Conference of Parties
designed to set the stage for strong climate change agreements this year.
WWF believes that with the
increase in solar energy, an additional increase in wind energy installation
targets is a firm, next step that the DOE can commit to.
In 2001, the Electric Power
Industry Reform Act (EPIRA) was implemented to limit the cost of electricity.
At that time, the Philippine power generation mix was composed of 37.29 percent
renewable energy and 62.71 percent fossil-fuels.
A decade later, the share of
renewable energy has since dropped to 28.37 percent.
“Most of our power rate jumps
were caused by generation cost hikes,” says Gia Ibay, who heads climate change
initiatives by WWF-Philippines. “With fossil-fuel prices continually rising due
to dwindling supplies and soaring demand, the cost of our electricity shall
rise even further. The best solution is to use renewable energy resources to
shield us from the cost volatility of fossil fuels.”
Many renewable energy plants
can be directly embedded on key areas to further reduce the cost of
electricity, eliminating the need for transmission and distribution lines to
deliver electricity from power plants to households.
The International Energy
Agency forecasts a steady increase in the cost of coal and other fossil-fuels
over the next decade. (SciencePhilippines)
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