Corporate News

Solar Philippines offers to replace coal power plants with solar farms

Posted on July 03, 2017

SOLAR PHILIPPINES Power Project Holdings, Inc. has offered to replace all planned coal-fired power plants with solar farms equipped with battery storage in a move that it expects to significantly cut electricity rates.

Solar Philippines President Leandro L. Leviste said with his company's 5,000 MW solar plan and its 24/7 solar-battery projects “we see no scenario where most planned coal projects will push through.” Photo credit: SOLAR PHILIPPINES
“Our solar costs at least 30% less than coal and can save Filipinos 100 billion pesos per year,” said Solar Philippines President Leandro L. Leviste in a statement on Sunday.

He said his company has submitted to the country’s electric utilities a plan to reduce power rates by 30% through his proposed solar-for-coal swap.

Solar Philippines is awaiting approval of a power supply agreement with a distribution utility for P5.39 per kWh. This compares with the current rate of P8.17 per kWh in Metro Manila from a mix of generation sources.

His 5,000 megawatt (MW) solar plan includes details on the target sites of the solar farms, integration of batteries for grid reliability, and the cost of batteries and panels from Solar Philippines’ factory in Batangas, which is now operating.

Based on latest data from the Department of Energy, a total of 4,615 MW of coal power is committed for completion between this year and 2022. Separately, proponents of up to 9,603 MW of “indicative” capacity are in various stages of preparation ahead of closing financing for their coal facilities.

“As to the exact price, the company will release the details at a later time, out of respect for its ongoing discussions,” Solar Philippines said.

It said sun power now averages P3 per kilowatt-hour (kWh) globally, and even as low as P1 per kWh in some markets, making it cheaper than coal. As example, it cited China, which canceled 120 gigawatts (GW) in planned coal plants. It said the cancellation included 54 GW of capacity that is under construction, while completing 34 GW of solar in 2016.

“India’s government has canceled nearly 20 GW in coal plants, shut down 37 coal mines, and is targeting 100 GW of solar by 2022. Bloomberg estimates that a mere 18% of planned coal plants today will ever get built, resulting in 369 GW of cancellations, in light of low solar costs,” Solar Philippines said.

Cheaper power is badly needed in the Philippines, it said, yet the country “is one of the only countries where plans for new coal plants are still pushing through, for now, because of the perception solar is expensive.”

Mr. Leviste said: “We can’t fault coal companies or policy makers for not believing in solar. It’s the solar industry’s fault for not having shown that it can be cheaper and more reliable than coal.”

He said with his company’s 5,000 MW solar plan and its 24/7 solar-battery projects “we see no scenario where most planned coal projects will push through.” He said the solar batteries are to be completed this year.

“It is simply a fact that solar with batteries is now the least cost power in the Philippines, and anything else will result in higher rates to consumers. We encourage the local power industry to consider this before investing billions into new coal, and hopefully they will see, like the Indians and Chinese, that the future is already here,” Mr. Leviste said.

Solar Philippines said that even if utilities sign contracts to source power from coal-fired plants, retail competition and open access (RCOA) “means these contracts will become irrelevant once all consumers will be able to directly choose their power suppliers.” RCOA regulations call for consumers to buy electricity from retail electricity suppliers and away from distribution utilities.

“Upon RCOA’s full implementation, coal plants will cease operating if renewables are lower cost, resulting in billions of dollars in losses as already seen in other markets,” the company said.

Mr. Leviste said his 5,000 solar plan “may consist more of going directly to rooftops, depending on the receptivity of utilities to solar farms.” -- Victor V. Saulon