Cusi scraps next round of FIT for solar, rules no subsidy for stranded capacity

By Myrna M. Velasco – May 29, 2017, 10:00 PM

from Manila Bulletin

A final “death sentence” had been rendered by Energy Secretary Alfonso G. Cusi on any next round of feed-in-tariff (FIT) that is planned for fresh round of solar technology installations in the country.

The energy chief similarly indicated that there shall be no subsidy to be extended on the 360-megawatt “stranded solar capacity” – or the installations losing in the second wave FIT race culminating in 2015.

Cusi is sending this clear message even to the National Renewable Energy Board (NREB) that has been contemplating on another form of subsidy scheme for the stranded solar developments.

Even diverting conceptually from the FIT system, the energy secretary noted that any fixed set of subsidy on per kilowatt hour (kWh) basis for solar is already a ‘no go’ for the Department of Energy.

“We want to drive electricity prices down because we are the highest in our region … continuous granting of FIT is opposed to that objective,” he stressed.

Cusi reiterated “for solar, the direction is that we stop it…we have to stop the FIT because we have been grating a very high FIT for that one technology source.”

On the bid of some parties that the DoE comes up with a written policy on such, the energy chief noted that with his recurrent public pronouncements, there shall no longer be a need for it.

Instead of incessantly wishing for fresh round of FIT or any subsidy in another name or form, Cusi noted that solar power developers should start working on their business models that shall be revolving around an auction system through competitive selection process (CSP) and the enforcement of Renewable Portfolio Standards (RPS) in the renewable energy sector.

The NREB has yet to come up with an updated draft on the proposed RPS – given that the last version of the past administration had some array of opposition from various stakeholders.

The RPS will impose the level or volume that distribution utilities shall be sourcing from RE players as a component of their overall supply base. The last proposed figure was at 2.5-percent.

Cusi emphasized that with the drastic collapse of solar technology costs in the world market, developers on that terrain would already have that much leverage to compete in the marketplace even against traditional energy technologies.

“The Philippines, we are a very poor country…and we have been saying that we are technology-neutral… We want our supply to be secured and we don’t care where we source it. At this point, we cannot favor any technology – we have to undergo competitive selection process,” Cusi asserted.