A solution to the looming power crisis is self-generation and distributed generation of energy through renewable sources. However, this solution is riddled with regulatory strangleholds that must be loosened to become viable.
The imminent power crisis has taken the spotlight in recent weeks. According to news reports, the Philippines, specifically Luzon, will suffer a shortfall of around 400 megawatts, leading to days of rotating power outages in the summer of 2015. The government has only around six months to avert this crisis. But it takes at least three years to build and begin operation of new power plants that will address the shortage of power.
It seems like rotating brownouts will be inevitable in the coming summer. These rotating brownouts will lead to drops in productivity, and may even cause layoffs and closures of businesses that are energy-intensive, such as factories. The imminent energy crisis presents a threat to the Philippines, the Filipino people, and the legacy of President Aquino’s administration.
However, it is also an opportunity for the administration to be remembered as one that would not only revolutionize the power industry but also propel the Philippines to becoming a model country for climate-change mitigation and adaptation.
I believe that self-generation and distributed generation of renewable energy—i.e., generating power on an industrial scale for a single facility and generating power on a household scale—are the solution to the coming energy crisis. Self-generation and distributed generation of energy from renewable sources, specifically solar power, will empower each business and household to mitigate, if not solve, the looming crisis. By installing solar panels on buildings and houses, businesses and homes can generate their own electricity, and even provide others with electricity.
The advantage of renewable energy, specifically solar power installations, is that they may be constructed within months. A home solar panel array will take at most a month from contract-signing to full installation, while a commercial solar panel array will take at most two months. Solar power is the only energy source that will give us enough time to produce the capacity needed to avert the energy crisis.
However, at the moment, self-generation and distributed generation of renewable sources of energy are heavily burdened by regulation and bureaucratic red tape. Businesses that want to generate power for themselves must submit up to six documents to the Energy Regulatory Commission, and wait for around three months if they want to be allowed to operate. If these businesses want to sell their excess electricity to others, they will then be required to produce at least 12 documents, some of these highly technical, and wait for months until they are allowed to operate.
The situation is better in the Visayas, where the Visayan Electric Company, a distribution utility, has encouraged net metering. Net metering is a system where distributed generators of renewable energy are able to sell excess energy back to the grid. However, homes in Luzon that want to put up solar panels and sell their excess electricity back to the distribution utility have difficulty doing so. This process of selling energy back to the distribution utility is called net metering, and it is one of the systems of renewable energy generation put forward by the Renewable Energy Act.
Currently, people who want to avail themselves of net metering will have to submit five documents, three of which are very technical, and pay as much as P20,000 to sell a few hundred pesos worth of electricity back to the distribution utility. The application process for net metering is 15 steps long, requires dealing with both the distribution utility and the local government, and takes four to five months to complete. The entire process is so difficult that it does not really seem worth it for the persons who want to avail themselves of net metering.
To avert this power crisis, the Aquino administration must take action to make self-generation and distributed generation of renewable energy easier, faster, and less expensive. The more the people are equipped to build their own capacity, the better prepared our country will be to face the crisis.
If Luzon is able to take the same approach to net metering and self-generation as the Visayas, then the Philippines will be better prepared for the power crisis of 2015. It is simply a matter of having distribution utilities require less documents for net metering, and requiring less documents for self-generation.
Installing solar panels on homes has had publicized benefits, and it is said that they will pay for themselves in five years because of energy savings. Businesses may also benefit from the energy savings that solar panels will provide. Less requirements and fees will make self-generation and distributed generation through solar panels a viable option for more people.
This is an opportunity for the Aquino administration to show that it is dynamic and creative in solving a seemingly impossible problem. If it does, it will be remembered for transforming the Philippines from a victim of climate change to a leader in climate adaptation. It is within the President’s power to cut through the red tape.
Juan Antonio R. Oposa, a 2012 graduate of the University of the Philippines College of Law, specializes in renewable energy law and policy.