DOE circular seeks at least 30% renewable-energy mix

by Lenie Lectura, 19 July 2015
from BusinessMirror

The Department of Energy (DOE) has moved to ensure renewable energy (RE) would have its rightful place in the country’s energy mix, when it issued Department Circular 2015-07-0014, or the “Guidelines for the Policy of Maintaining the Share of RE in the Country.”

The circular states that the share of RE should be at least 30 percent. The renewable sources of power include solar, wind, biomass, ocean and hydro.

Based on the 2014 DOE Power Statistics, 25.64 percent of the country’s total power generation is sourced from RE facilities, or equivalent to installed generating capacity of about 32.87 percent of the country’s installed capacity.

“To maintain the share of RE in power generation, the DOE hereby adopts a policy of at least 30-percent share of RE in the country’s total power-generation capacity through the holistic implementation of the FiT [Feed-in-Tariff] System and other pertinent provisions under the RE Act and RE IRRs [implementing rules and regulations],” the circular stated.

FIT is the per kilowatt-hour rate guaranteed to RE developers to ensure the viability of their projects. Consumers shoulder this under FiT-Allowance (FiT-All), a separate line component in the power bills. They are now paying an additional P0.0406 per kWh since February this year.

At present, coal dominates the country’s energy mix. US consultancy firm HIS said early this month that coal is seen to take up 56 percent of the mix by 2020, with 23 new coal-fired power plants lined up for commercial operation in the next five years.

To be sure that this policy is strictly enforced, the DOE will use the FiT installation targets: 250 megawatts (MW) for hydro, 250 MW for biomass, 400 MW for wind, 500 MW for solar and 10 MW for ocean. When these targets are met, a bidding will take place.

“Upon the full subscription of the existing FiT installation target, the succeeding
rounds for the installation targets for  FiT-
eligible resources shall be made through an  auction system to be adopted by the DOE,” stated the circular, which takes effect 15 days upon its publication.

The DOE will take into account the distribution and grid security, cost and other considerations in determining the installation targets for each FiT-eligible resources, “provided that the auction…may only be made upon the issuance of the implementation of the must-dispatch implementing rules and regulations.”

To balance the impact of RE in the grid, the developer of FiT-eligible resources shall be responsible for the nomination and the dispatch of generated power from its generation facilities. “Provided that deviations outside the prescribed range set per FiT-eligible technology, the RE developer shall be responsible for procuring the replacement power,” the DOE added.

There will be an “intensive and massive information, education and communications activities” to be conducted by the DOE in a bid to increase public awareness and appreciation of the guidelines and the RE industry as a whole. The share of RE resources in the installed capacity is targeted to increase to 15,304 MW by 2030.

The country’s RE resource assessment shows vast amounts of RE sources that are yet to be developed on top of the more than 10,000 MW of potential capacity already covered by registered RE projects with existing RE operating contracts that are currently being implemented as of March 31.

The DOE has been saying there is a need to issue a policy that ensures and maintains
the share of RE in the country’s installed
capacity to ensure energy sustainability, security and independence.

“The circular that will come out is not a power mix. It is a guide policy for the DOE on FiT, wherein it is emphasized that RE is set at 30 percent and FiT is a balancing act but with certain conditions,” former Energy Secretary Carlos Jericho L. Petilla earlier said.

Many power firms generate power from coal because it is the cheapest among all power sources. “You want a good mix in power generation? If you look at the cost, coal is the cheapest.  But you just don’t want to have the cheapest. You need to have reliability and self-sufficient power source.”

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