Cusi not inclined to use FiT scheme for RE projects

By Lenie Lectura – November 4, 2016

from Business Mirror

THE Department of Energy (DOE), under the leadership of Alfonso G. Cusi, is not inclined to implement a third round of feed-in-tariff (FiT) scheme for solar- and wind-power projects.

“It’s too much because FiT runs up to 20 years, and it’s overburdening our consumers. We want to bring down our electricity rates. How can we bring it down if we keep on giving FiT?” Cusi said on Thursday.

The FiT-All serves as an incentive to renewable-energy (RE) developers to ensure the viability of their projects. RE includes wind, run-of-river hydro, solar, geothermal and biomass.

Consumers shoulder the FiT-All, a separate line component in their power bills. The distribution utilities (DUs) collect the FiT-All from end-consumers. They will remit this to the National Transmission Corp., which was tasked by the Energy Regulatory Commission (ERC) to administer the FiT-All fund.

The current FiT-All rate is P0.124 per kilowatt hour, up eight centavos from the previous FiT-All rate of P0.0406/kWh. If Cusi’s pronouncement is deemed final, solar-power proponents, with an aggregate capacity of 390 megawatts (MW) that were in a race to meet the March deadline to subscribe to the 500-MW solar-power installation target previously set by the DOE, would have to contend with the selling rates at the Wholesale Electricity Spot Market (WESM) or via bilateral contracts.

“In any race, there’s a winner and there’s a loser. So those people who qualified, they will get the FiT. For the 390 MW, they knew the rules when they participated. If you don’t qualify then you should know your options, which are either the spot market or bilateral contract,” Cusi said.

The National Renewable Energy Board (NREB) earlier proposed to the DOE lower FiT rates for solar and wind technology amounting to P7.66 per kwh and P6.97 per kwh, respectively, under another round of FiT.  The proposed rates are based on another proposal, which is to increase the installation targets by 500 MW each for wind and solar.

Solar FIT rates under the first round reached P9.68 per kwh. This went down to P8.69 per kwh in the second round. Meanwhile, wind technology had a rate of P8.53 per kwh in the first round and P7.40 per kwh in the second round.

The DOE sets the installation ceilings while the Energy Regulatory Commission (ERC) sets the FIT rates.

When asked what will happen to those that failed to secure incentives via the FIT rate under the second round, Cusi said he is not endorsing that these projects should no longer be processed. “We are not changing any rules here. If ERC has completed its own evaluation, then so be it.”