Young man on a missionSeptember 18, 2017
DEMAND AND SUPPLY by Boo Chanco
The Philippine Star | September 18, 2017
There is a Pinoy Bill Gates and Mark Zuckerberg. Like them he dropped out of school while he was still an undergrad not at Harvard, but at Yale. Like them, he was a young man on a mission and college education was getting in the way. Like them, he founded a start-up that will use technology to revolutionize the way we live.
I have written about Leandro Leviste before and his mission to not just bring down power rates through the use of solar energy, but protect our environment as well. I had a conversation with this bundle of energy, intelligence and idealism last week and I am more impressed than ever. Congratulations, Tony and Loren.
He is just 25 years old, but I have not met a 25 year old like him ever in my 67 years in this earth. He is driven to accomplish what many would say is difficult to do in this country.
Lean is totally unfazed with battles he has had to wage against the entrenched interests in an economic sector as totally controlled by rent-seekers as the power industry is. In one interview, he remarked: “I just always think that anything is possible. Older people always tell me things can’t be done. The world is different now and pigs can fly.”
Lean’s attitude about his mission to make solar a mainstream power source here is best captured by a remark he made to an interviewer from Forbes: “It’s such a revolutionary thing it’s not going to be just part of the energy supply, but 100 percent of it.”
The economics is indeed compelling. “Solar is cheaper than coal in the Philippines,” but Lean complains, “why no one else is talking about that is beyond me.” Indeed, solar is now cheaper than coal, but here we are in this country, planning to build 29 new coal plants.
Lean thinks building all those coal plants is stupid. Even if utilities sign coal contracts, Retail Competition Open Access (RCOA) means the contracts will become irrelevant once all consumers will be able to directly choose their power suppliers. Upon RCOA’s full implementation, coal plants will cease operating if renewables cost less, resulting in billions of dollars in losses. This is already happening in many markets.
In Lean’s calculations, the Philippines can save over P200 billion a year by replacing planned fossil fuel plants with solar farms. This means, he said, a 30 percent decrease in electricity rates, equal to P1000 a month for every poor Filipino family. It will also make Philippine power rates more competitive with our Southeast Asian neighbors.
Best of all, he points out, going solar requires zero government funding, and no policy to favor renewable energy – it simply needs EPIRA’s Retail Competition and Open Access (RCOA) policy to be implemented. This will allow every consumer to choose their power supplier, instead of utilities choosing for them.
But RCOA has been blocked up to the Supreme Court by entrenched interests. This denies consumers the right to choose their power suppliers, when this was programmed in the EPIRA since 2001. Consumers should raise a clamor for RCOA’s implementation instead of constantly complaining about high power rates.
But even now, lower power rates can be achieved with the implementation of the Competitive Selection Process (CSP) policy of DOE and ERC on all power supply agreements. A legacy of former energy secretary Icot Petilla, the process calls for a transparent bidding for supplies required by power distributors rather than letting distributors and generators negotiate between themselves behind closed doors, as is now mostly the case.
Lean saw the promise of solar because Filipinos pay some of Asia’s highest power rates, but shouldn’t. The high rates, he explained, contribute to poverty, an issue for a large number of Filipinos. High power rates also discourage foreign investors from building manufacturing facilities here to help the economy grow more sustainably.
Solar, he says, is clearly the solution to high power rates because even now, “solar can already replace all gas and diesel in the Philippines.” He said the price of solar could go even lower than P3/kWh, but the red tape in seeking government approvals and the high cost of land are adding to costs.
Indeed, he said he can provide solar electricity at P3 a kilowatt hour (kWh) without the Feed-in-tariff subsidy of P8.69 a kWh that consumers are now required to pay for 20 years to solar power producers who joined the government’s renewable energy program. Lean is proving through actual experience that the FiT program is an unnecessary burden to all electricity consumers… pure unadulterated rent-seeking by the vested interests.
Indeed, just to prove solar is the answer… Lean is testing his micro-grid concept. He brought the first Tesla batteries into the country. He will use it to build Asia’s largest ever solar-battery micro-grid (5 MW/ 8 MW) to power a remote off grid town of 20,000 people 24/7 in Mindoro, with zero cost to the government, at a lower cost to consumers, with greater reliability than the National Grid.
Lean is hoping this can be a showcase for what every town in the Philippines can enjoy, if only utilities and government will not prevent consumers from freely availing of lower cost options.
Lean’s initiative in Mindoro should prove solar is a reliable electricity source. He wants to help communities with poor or no electric service to form their own “solar power associations” and avail of low-cost 24/7 power. I am sure the entrenched big guys now producing and distributing power will not like this.
Lean has also taken more steps forward. Undeterred by the bad experience of the Lopezes in solar manufacturing, Lean inaugurated last month a solar panel manufacturing facility in the same industrial park owned by the Lopezes which hosted the Lopezes’s failed venture with a foreign partner.
Lean told me he hired a good number of the staff who used to work with the Lopezes. They are already experienced in manufacturing solar panels following international standards and certifications. The factory will employ 1000 Filipinos and help grow the local solar industry, Lean said.
Lean’s Solar Philippines factory utilizes state-of-the-art technology and the highest quality materials. It will produce 800 MW in 2018, greater than the solar production capacity of the entire United States, making the Philippines a global leader in solar panel manufacturing, Lean claims.
Lean’s factory is partnering with Chinese companies to manufacture solar panels for export to the US and Europe. The company has also begun selling panels to local distributors, and solar systems to homes and businesses on installment at zero upfront cost. Part of the power needs of SM malls is now being supplied by Lean’s solar enterprises.
Forbes ranked Leviste at the top of its inaugural list of the 30 Under 30 for his work in pioneering solar energy. Lean was selected from among thousands of nominations received by Forbes and screened by a panel of judges.
I asked Lean when he will return to Yale to finish his bachelor’s degree in political science. He smiled and said maybe in two years when his pioneering work gets more established. I don’t think he will. He is doing a lot more exciting things for himself and his country right now and going back to college will just be an undesirable and useless interruption.
I look at the country’s situation today, the bullying politicians in Congress, the martial law threat and the daily killings in our streets, and I think we are hopeless. I had this two hour conversation with this 25 year old and I feel optimistic again. If we just have more Leans out there, we can be more hopeful about our future, despite today’s looming darkness.