DOE open to FIT perks for geothermal

by Myrna Velasco – May 18, 2016

from Manila Bulletin

The Department of Energy (DOE) is acquiescent to proposals of including geothermal technology in the array of renewable energy (RE) projects that shall be incentivized under the feed-in-tariff (FIT) system.

Nevertheless, Energy Secretary Zenaida Y. Monsada has qualified that such set of perks may only be granted to project developers based on the recommendation of the National Renewable Energy Board.

She said the NREB must carry out an extensive study on the proposal; and shall subsequently lodge its policy recommendations to the DOE for approval.

“It (FIT for geothermal) can be considered… we will have to review it,” the energy secretary said. The FIT subsidy is typically extended to qualified projects at a fixed rate for 20 years.

At this stage, Monsada indicated that they may only be amenable to granting FIT incentives to low enthalpy geothermal resources; and those developments of smaller capacities.

“It (FIT) could be done for low enthalpy geothermal and smaller capacities… there should be special incentive to develop especially if we really want to improve geothermal share in the mix,” she stressed.

She emphasized though that given propounded capacity limit on installations, the FIT system may no longer apply to big-ticket projects.

Asked on what would be an ideal capacity cap to be underpinned by FIT subsidy, the energy chief just asserted that “it should be part of the NREB study.”

She added that the NREB must also assess what could be a more prudent policy approach – if the FIT shall be based on steam temperature or the capacity or scale of the resource.

It had been leading geothermal player Energy Development Corporation (EDC) that put forward the proposal on FIT system for geothermal projects – seeking a FIT charge of P5.00 to P6.00 per kilowatt hour (kwh) for baseload type of development on the technology.

Some industry players are raising questions though on how that can be enforced without necessarily subverting the provisions of the Renewable Energy Law.