The Department of Energy’s (DOE) Green Energy Option Program (GEOP) empowers business enterprises to save electricity costs while driving the country’s clean energy transition.
This was the key takeaway of advocates during the first run of “REalTalk: A Communications and Movement Building Workshop on Renewable Energy” held this month.
REalTalk is The Climate Reality Project Philippines’ energy literacy and movement-building training program. It brings together energy experts and seasoned campaigners to mentor Climate Reality Leaders and advocates in communicating and influencing decision-makers in the public and private spheres to support the transition to renewable energy.
The GEOP is a new mechanism implemented by the DOE that allows electricity end-users with an average 100kW or above to source their electricity from renewable energy sources.
Amid the volatility of fossil fuel costs in the global market and the unreliability of coal-fired power plants in the country, as exemplified by frequent power outages for areas connected to the grid, GEOP gives consumers the power to make their operations more competitive by veering away from coal.
“Imagine the difference if many businesses will join GEOP. We are saving money by having electricity sourced from 100 percent RE. We are paving the way to reduce CO2 emissions and prevent global warming. We are helping the Philippines transition into a more sustainable future,” said David Co, head of Business Development in Vita Tropic Ice Company, Inc., during one of REalTalk’s virtual sessions.
Vita Tropic is among the few and first GEOP switchers in the country.
“On our first month alone, the savings were already significant. With the uncertainty and continuous rising cost of fuel, the traditional electricity rate has gone off. Our savings are becoming larger. It also feels great to know that 100 percent of our energy is from green energy sources. Because we made the switch, we are saving so much so soon enough we might be able to save enough money for expansion,” Co added.
High electricity costs in the Philippines
“The Philippines has one of the highest power rates in the ASEAN Region because of its dependence on imported fossil fuels,” said Atty. Pedro Maniego, Jr., senior policy advisor at the Institute for Climate and Sustainable Cities, during one of the REaltalk sessions.
Alberto Dalusung III, Energy Transition advisor at the Institute for Climate and Sustainable Cities, identified generation cost as the most expensive and largest component of electricity bills causing power rates to shoot up.
The generation sector deploys combinations of powerplants to meet the variability of load demand. While the Renewable Energy Act of 2008 aims to promote the development, utilization, and commercialization of renewable energy, coal remains to dominate the power generation mix among all Philippine grids.
Jephraim Manansala, chief data scientist at the Institute for Climate and Sustainable Cities, explained that Luzon, Visayas, and Mindanao grids are mainly powered by coal, alongside fossil gas, hydroelectric, and geothermal.
Coal and geothermal are considered baseload power plants that generate consistent power to meet the minimum daily demand but are inflexible to adjust outputs vis-à-vis the variability of the load demand. Meanwhile, fossil gas is an example of an intermediate powerplant that meets the variability of load demand but entails higher construction costs.
“We need to shift from the usual baseload paradigm, where coal is prioritized. We need to advocate for a new system that prioritizes solar and wind energy because they have the cheapest operational costs. Solar and wind energy will lower our electricity costs,” Manansala explained.
Accessibility, reliability, and profitability of renewable energy
Solar and wind power plants are examples of variable power plants that have cheap operational costs and zero marginal costs.
“Renewable energy sources are much cheaper compared to the rising price of coal. It also provides cheaper and more reliable power in the small island-grids in the Philippines,” Maniego stated.
Maniego added that the country needs a just transition to renewable energy, specifically leaning toward grid-connected solar and wind plants because of their less frequent outages than coal-powered plants.
“The unreliability of coal-fired power plants is the direct cause of rotating brownouts and the high cost of electricity during summer 2021 and 2022. Variable power plants historically reduced the price of electricity during the peak hours by 28 percent despite only having a 3 percent share in the energy mix,” he mentioned.
Sara Jane Ahmed, founder and executive director of Financial Futures Center, noted that a shift toward cleaner energy is happening globally, with over 145 globally significant financial institutions announcing coal exclusion policies and over 50 beginning to include oil and gas drilling exclusions.
Movement building for GEOP
Ruziel Larmae Gimpaya, manager for Corporate Strategy and Program Management of the Independent Electricity Market Operator of the Philippines (IEMOP), said that there are currently 95 applicants in the pipeline for GEOP.
Building on the success story of Vita Tropic, Climate Reality Philippines, together with its roster of volunteers, is set to roll out a campaign to encourage more eligible entities to sign up to GEOP.