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FEF not opposed to renewable energy

08:56 PM March 01, 2012

We write in response to Neal Cruz’s Feb. 24 column titled “Renewable energy vs coal and diesel.” Cruz said that the Foundation for Economic Freedom (FEF) is against renewable energy, and he ascribed certain, inaccurate reasons for FEF’s opposition.

First of all, FEF is not against renewable energy, especially geothermal and hydro, whose generation cost is comparable to conventional sources of energy. What FEF is against is taxing Filipino consumers by charging them twice the cost of conventional energy as in the case of wind (P10.37 kWh) and three times the cost as in the case of solar (P17.90 kWh) in order to subsidize and guarantee the profits of renewable energy companies.

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Cruz stated that there’s no bidding for coal, so why should FEF insist on auction for renewable energy? Because in the case of renewable energy, its producers are given a subsidy through a surcharge imposed on consumers. Moreover, such subsidy is not unlimited, as there’s an installation target set by government, and therefore the only fair way of allocating the subsidy is through an auction process.

Finally, Cruz is wondering why FEF is opposing the locking in of prices to renewable energy developers for 20 years. The answer is, technological developments and renewable energy prices are getting cheaper every year. In the last year alone, solar panel prices have dropped by at least 30 percent. Would Cruz have liked the Filipino consumers to be paying P10,000 for a Motorola portable phone model of 10 years ago and continue to pay for the phone for 10 years more, even if phones are getting cheaper and better every year?

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Cruz cannot compare renewable energy sources like wind and solar to conventional sources of energy. Not only is energy from wind and solar expensive, it is also intermittent and unreliable. On certain days, wind doesn’t generate any energy. Solar doesn’t generate energy at night or on cloudy days. The country cannot industrialize on the back of expensive renewable energy like wind and solar.

To repeat, FEF is not against renewable energy, but only against subsidizing the profits of very expensive  renewable energy sources like wind and solar. It is opposing the Feed-in-Tariff petition of these companies (a petition that will hike power prices) in behalf of consumers like Cruz, and not for any coal-energy company.

—CALIXTO V. CHIKIAMCO,

president, Foundation for

Economic Freedom Inc.,

[email protected]

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TAGS: energy costs, foundation for economic freedom, letters, renewable energy
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