By Victor V. Saulon, Sub-Editor
SOLAR Philippines Power Project Holdings, Inc. targets to deliver 24 hours of electricity to two towns in Masbate and Cagayan provinces by the end of June as the company expands its initiative to build microgrids in poorly served areas in the Philippines.
Solar Philippines President Leandro L. Leviste said the move is under the company’s social enterprise called “Solar Para Sa Bayan (Solar For The People)” in which he expects to lose money initially.
“With around 10 megawatts (MW) of solar and back-up diesel, we will be bringing 24-hour power to a dozen or more towns before the end of this year for the first time in history,” he told reporters.
“We’ll be doing 24 hours in Claveria, Masbate hopefully later this month,” he said, adding that Calayan town in Cagayan province is also set to be energized in June.
Masbate and Cagayan are two of the eight provinces that Solar Philippines plans to put up a microgrid, or a small-scale electricity grid that can be operated independently from the country’s interconnected network of power transmission facilities.
The other provinces that Mr. Leviste identified are Mindoro, Romblon, Palawan, Davao, Batangas and Isabela. About 500,000 people are expected to benefit when the microgrids have been put up by the end of the year.
“We’re losing a decent amount of money initially, but the business case is that if we can help these people get out of poverty, their electric consumption per capita will increase and it will become a viable market,” Mr. Leviste said.
In March, Solar Philippines inaugurated its first microgrid in Paluan, Mindoro, which Mr. Leviste claims to be the largest solar battery microgrid in Southeast Asia with 2 MW of solar panels, 2 MW-hour of batteries and 2 MW of diesel backup.
“Across the portfolio, the average cost is — not our price — the cost is probably P16 to P20 per kilowatt-hour and we’ll be selling it at as low as our budget can afford us to lose money,” he said.
Next to Claveria and Calayan, Solar Philippines will be launching microgrids in Divilacan and Maconacon towns in Isabela “all within 60 days,” Mr. Leviste said.
“The rest will come within four to five months,” he added.
The microgrids will have different power capacities, but for Claveria and Calayan, the demand is around 500 kilowatts each thus the power system will have a capacity of 1 MW each to allow for some redundancies, Mr. Leviste said.
“We believe that this is a way of looking at business that is largely absent in the Philippines where power investors are used to the ERC (Energy Regulatory Commission) guaranteeing their returns, and passing through all costs to consumers,” he said.
“We’re hoping that showing, however, modest our means, we’re able to do this for half a million Filipinos, even the bigger power companies can find it in their heart to devote more of their resources to helping our less fortunate countrymen as well,” he added.
Asked how he is dealing with resistance from electric cooperatives that hold the power distribution franchise in the provinces, Mr. Leviste said: “First, the Constitution is clear that no franchise shall be exclusive and the very franchises of these utilities have a provision on non-exclusivity. So the notion that utility franchises are exclusive is patently false. You can ask any lawyer that.”
Mr. Leviste said that if the government allows the company to extend its coverage to not only the underserved areas “that will enable us to offer lower costs to the unserved areas without any government subsidy.”
He said he expects the Office of the President to issue an executive order that will open up all the poorly served areas in the Philippines to be served by the private sector.
“We don’t need any subsidy whatsoever. If there is any subsidy we believe that it should be given to the people and not the suppliers, which unfortunately is not the present situation,” he said.
By Victor V. Saulon, Sub-Editor