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RP Deregulation Policy Spells Trouble for Renewable Energy

Written By David D'Angelo on Monday, December 17, 2007 | 12/17/2007

Bali, Indonesia – Bayan Muna Rep. Teddy Casino today said a major stumbling block to the development of renewable energy in the Philippines is the government's deregulation policy in the power sector.

Casino and Quezon Rep. Erin Tanada are in Bali attending an international hearing of parliamentarians on renewable and clean energy sponsored by the Europe-based e-Parliament and the World Future Council. Twenty-two legislators from 14 countries are attending the meeting.

"One of the revealing conclusions raised by several expert presentations here is that the government's role in regulation and public financing is crucial in developing renewable energy. Without strong government intervention and public financing, renewable energy will never achieve the scope and scale needed to make an impact on the environment or the economy," said Casino.

He said DENR Sec. Angelo Reyes' call for the enactment of a renewable energy bill was "hypocritical" given the Arroyo government's intensified thrust to deregulate and privatize the power sector under the Electric Power Industry Reform Act (EPIRA).

"For example, now that we have sold the national power grid (TRANSCO) to the private sector, it will be very difficult for the government to compel the owners of the grid to give preference to small and independent renewable energy producers who, in the experience of many countries, spearheaded the shift to renewable energy," he said.

"On the other hand, the privatization policy in the power industry, which started under the Ramos administration, has reduced the percentage of geothermal and hydro power plants as private investors would rather invest in cheaper but more environmentally- destructive coal and bunker fuel plants," he added.

"We should remember that we achieved number two status in the world in geothermal energy production and became a major producer of hydropower during the time when NAPOCOR and its plants were purely state owned. Now NAPOCOR is selling all its plants and detaching itself from its leading role in energy production," he said.

"The deregulation and privatization of the power industry have failed to meet the twin objectives of lower cost and more efficient operations. It will most probably fail to develop clean and renewable energy as well," stressed Casino.

Casino agreed that a renewable energy bill should be prioritized by Congress but such a bill should not be tied to the existing framework of privatization and deregulation in the energy sector. ###

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