Subsidized power leads to energy waste
Philippines president Gloria Macapagal-Arroyo spoke at the opening plenary of the Clinton Global Initiative. Unintentionally, her remarks illustrated the challenge of sustainable development.
First the good news — green power:
We are endowed with geothermal power and it fits very well with our Green Philippines program. We want to use clean energy, we want to have energy independence, and geothermal power gives us clean energy and energy independence. Just before coming here yesterday, I was in an island in Santro Philippines, in a geothermal field. In fact the biggest wet field of geothermal power in the world. And what we did was we presided over yesterday a turnover of a build, operate, and transfer project from the private sector to the government sector. I had a similar turn over a few weeks ago, and the private sector has been able to get, the investors have been able to get their money back before they turn it over to the national government. So it’s been a well paying proposition for them, too.
Now the bad news (which she thought was good news) — subsidized power:
Yesterday, I also announced, for the second time, an initiative where we are encouraging economic zones to be set up around the geothermal sites, because not only can geothermal fields give us power, they also give us jobs because the local governments earn royalties from the geothermal power. And they, by law, they can only use most of it for electricity. So they subsidize the electric bills of the constituents. So now we are creating economic zones there, so that businesses, like electronics, for instance, power incentive electronics firms, will locate there. So aside from the subsidized power bills from the local governments, they will also have the usual investment incentives. So these areas, which are usually far from central Manila, will now have industries, as well as power.
Subsidized power means overused power means wasted power. No country, and certainly not the Philippines, has renewable power to waste — especially not in the age of global warming. What an unfortunate law that forces local governments to waste energy.