‘Green is gold’ - greenpeace-A A +A
An Independent View
Monday, September 23, 2013
RENEWABLE energy – that is when the energy source is not depleted when used – is, in principle, supported by all of us. Renewable energy, intrinsically, has no enemies.
It is somewhat disappointing, therefore, that Greenpeace’s recently produced report ‘Green is Gold’ adopts a curiously defensive tone. It starts by saying that we have been bombarded with information by ‘outright untruths, often peddled by polluting industries.’ These ‘outright untruths’ apparently include ‘renewable energy is expensive’, ‘renewable energy is a pie in the sky dream for tree huggers’, ‘coal is cheap’.
Shades of Gray
It is easy to see the RE picture in black and white terms – fossil fuels such as coal are bad and RE activity, of whatever kind, is good. The reality is different. There are always shades of gray.
We may see wind energy as 100 percent renewable and with no deleterious effects. Not so. Windmills may look benign if not very slightly, but their mechanisms contain significant quantities of rare earths which have been mined in extremely environmentally unfriendly conditions in China.
The things we can do with sugarcane derivatives are, in principle, laudable but, one way or another, we need fossil fuels to help things along. We sometimes think in terms of there being an unlimited supply of biomass but the reality is different. There can be shortages and when there are we return to coal. Furthermore, the collection of biomass, often from remote areas, necessitates the use of fossil-fuelled driven vehicles.
If we are operating a bioethanol plant for example, we shall from time to time run low on biomass, which would normally power our boilers. What do we do then? Close the plant or acquire coal to keep our boilers functioning? Of course we would acquire coal which is what happens in practice.
We need to undertake regular calculations to see what is being gained by engaging in ostensibly pious renewable energy projects. These calculations would establish accurately the benefits and disbenefits of the projects.
The government has provided substantial support to the renewable energy industry. Two Republic Acts have been passed which were designed specifically to help the development of renewables.
In 2007, GMA signed into law RA 9367 The Biofuels Act. The purpose of this Act is to reduce dependence on imported fuels by developing indigenous renewable and sustainably-sourced clean energy sources. To facilitate this, the implementing rules and regulations for the Biofuels Act have required gasoline companies to include 10 percent bioethanol for vehicle fuel. This provides an assured bioethanol market size of over 400 million liters per year. In practice, this means that any entity in the Philippines which produces bioethanol will be able to sell it.
The second Act designed to encourage the renewable energy industry was passed in 2008. RA 9513, the Bioenergy Act is designed to encourage the use of renewable energy (RE) for electricity generation. Of tangible benefit is the introduction of feed-in-tariffs (subsidies) as a qualitative concept. The purpose of the FIT is to encourage investment in RE industry. It was left to the civil servants to put numbers on the FIT incentives.
FIT quantification has taken our bureaucrats several years. In 2011, proposed FIT numbers we produced for wind, biomass, solar, hydro. These numbers were revised downwards and in 2012 the current FIT numbers were produced together with the maximum amount in megawatts (MW) that would attract FIT incentives. These data are:
Peso/KWH Max (MW)
Wind 8.53 200
Biomass 6.63 250
Solar 9.69 50
Hydro 5.90 250
It is to be hoped that the subsidies are sufficient to attract the necessary investments.
Last month, at the Philsutech convention, SRA’s Gina Martin gave a detailed presentation as to how the sugarcane industry could diversify over the next few years. Her target for fuel ethanol is that sugarcane would produce 57 percent of the mandated volume in 2015-2016. Assuming that the mandated volume is 400 million liters, this target is 228m liters. Ambitious but possible.
According to Martin, the expected bioethanol production in 2013 is 80 million liters compared to only 32 million liters in 2012. Does this mean that San Carlos Bioenergy Inc. (SCBI) was the only producer of bioethanol last year?
SCBI’s bioethanol is transported to Petron where it is added to gasoline to produce the mandated mixture consisting of 10 percent ethanol. Since Petron has a large market of retail gasoline sales in Negros, this means that SCBI’s ethanol could remain in San Carlos and Petron could transport its raw gasoline to San Carlos and produce the 10 percent ethanol mixture there. The net effect would be to save the transportation costs of the ethanol. This should help to cause the price of vehicle fuel sold in Negros to be reduced.
Martin’s target for cogeneration is more challenging. Her target is 200 MW to be produced by the sugarcane industry in 2015-2016. I do not think this is likely.
San Carlos BioPower Inc. (SCBP) is currently constructing an 18MW plant which will produce electricity from biomass and, we understand from a United Nations website on climate change, from coal products as well. This would create administrative issues if the electricity generated from biomass attracts a feed-in tariff of P6.63 per KWH whereas the electricity generated from fossil fuels attracts a zero feed-in tariff.
How can we decide how much electricity is generated from biomass? What proportion of SCBP’s proposed 18MW will come from biomass?
Greenpeace draws attention to the fact that many countries have introduced ‘net metering’, - a system which allows a two way connection to the grid so that users can buy energy from the grid but also be paid for any energy we the give to the grid, often from solar panels from our roofs. It may be possible that the utility companies in the Philippines are not enthusiastic about this possible development. Why not? We believe that the Department of Energy (DOE) should encourage more public discussion about the potential benefits of net metering. Is Ceneco interested? We believe that net metering could be helpful to our electricity co-operatives because peak demand corresponds to high noon when the amount of energy put into the grid from the solar panels is also at a peak. Hence Ceneco would find it easier to cope with peak demand.
We believe DOE would be supportive of net metering, since it is compatible with its Mission statement:
‘We at the Department of Energy, in partnership with our stakeholders, shall improve the quality of life of the Filipino by formulating and implementing policies and programs to ensure sustainable, secure, sufficient, accessible, and reasonably-priced energy. In pursuit of this mission, we commit to render efficient service with utmost integrity and professionalism.’
We do not consider renewable energy fans as ‘treehuggers’. In any case the term is used with some affection. After all, some of us call accountants ‘beancounters’ and lawyers ‘suits’. These terms are not used pejoratively.
Greenpeace also draws attention to the almost universally held view that carbon dioxide emissions are already causing climate change. As a developing nation, we are well below the global average for per capita emissions. We produce approximately 0.5 percent of global CO2 emissions but we have 1.4 percent of global population. The carbon footprint of the average Filipino is only on tenth of the average American. This is not to say that there is nothing for us to do. There is and our legislators and administrators have made a start by creating a favorable RE framework. What we need now are investors.
‘New opinions are always suspected, and usually opposed, without any other reason but because they are not already common.’ - John Locke (1632-1704), Essay Concerning Human Understanding (1690)
Published in the Sun.Star Bacolod newspaper on September 23, 2013.