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Renewable energy to lower costs, boost economy — German official


Investments in the production of renewable energy may not only drive down skyrocketing electricity costs but may boost the economy as well, according to a visiting German parliament member. During the first Philippine Solar Photovoltaic Summit held Thrusday at the SMX Convention Center in Pasay City, Hans-Josef Fell, author of the German renewable energy (RE) law, underscored renewable energy’s vital function for the economy. "Renewabe energies in Germany have gone through an astonishing industrial expansion in the past decade. [As much as] 300,000 jobs were created in the renewable energy sector, 120,000 of it from the solar sector alone," he said in notes released Friday by the Philippine Solar Power Alliance (PSPA). Fell said investments in conventional energy sources are twice as expensive compared with those in renewable energy sources. "Investment in renewable energy is about 100 trillion dollars, but the fuel cost which we could avoid in 20 years would amount to about 200 trillion dollars," he said. "You see, it is cheaper to go into renewable [energy], if only to avoid the fuel costs. But then we also avoid external costs, such as climate change," he added. Should the current growth rates stay on track, Germany will be able to create about 50 percent of its electricity from renewable energy by 2020, and 100 percent by 2030, he said. Germany recently said it will be shutting down its nuclear reactors by 2020. "Our experience in Germany shows that protecting the climate by using renewable energy is not a burden but a stimulus to the economy," Fell said. Encouraging investments But for investments in the renewable energy sector to pour in, Fell emphasized that a good feed-in tariff (FIT) law must be in place. Feed-in tariff is a subsidy governments give renewable energy producers to offer their electricity at above-market rates. "Electricity price is rising rapidly because of the scarcity of resources (for conventional energy)," he stressed. "When the Philippines goes into a strategy with more renewable energy sources, it can become more competitive over other countries because of the rising fuel costs it has avoided." Fell cited a report by the Duke University which says that in 20 years the cost of electricity from renewable sources — after overcoming financial cost — is only about 0.5 euro cents per kilowatt-hour (kWh). In contrast, the price for nuclear power is up to 5 euro cents per kWh. In the Philippine market, the current price of electricity is set by the Electric Power Industry Reform (EPIRA) Act of 2001, said Tetchi Capellan, president of the PSPA. "But EPIRA and the distortions it is addressing does not take into consideration what the Renewable Energy Law is trying to put in place," she said. Profitable producers For a feed-in tariff to be effective, Fell said it is essential that compensation for renewable energy producers is profitable. "The duration of the compensation has to be at least 15 to 20 years to make it worthwhile, and a privileged grid access for the renewables has to be guaranteed," he said. Government must pour in more investments to strengthen the grid and to expand electricity storage systems, he added. Fell likewise said that in order for government to encourage more investments in renewable energy, it must cancel subsidies for producers of conventional energy. "Subsidies create more debt in the public budget," he pointed out. "If you cancel [these] subsidies, then renewable energy would be competitive very, very fast." — VS, GMA News

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