DOE seeks scale in ‘non-FIT solar’ regime

by Myrna Velasco – June 19, 2016

from Manila Bulletin

The group of industry player Leandro Leviste is pushing for solar investment regime that no longer needs to lean on feed-in-tariff (FIT), but the Department of Energy (DOE) wants to see “scale” for such paradigm especially with proposals to replace even the baseload capacities like coal.

DOE acting undersecretary Mario Marasigan noted that single projects of 50 to 100 megawatts would not be enough to compensate for the country’s needs for bigger-scale baseload capacities, hence, the solar industry players need to present a more convincing business model for their propounded 100-percent renewable energy platform.

Marasigan is the department’s major advocate of RE investments, but he is also realistic about the fact that power systems would need to thrive still on diversified portfolio of energy technologies.

“I am trying to hear from all developers and quite interested in the proposal,” he said, referring to the bid from some groups to eventually replace coal-dominated baseload capacities with RE, primarily solar, without subsidy support.

Marasigan said “if they [developers] can secure a bilateral contract or agreement on their proposed projects, so be it. But it should be based on economy of scale – not just based on a 50MW project, but it should be based on a series of 100MW projects.”

He added “then they should come up with a price that could offset all other projects – so rather than individual projects, you need to lump together several projects to build scale, and bigger capacities on the contracting sphere.”

Marasigan has admitted though that “we have not done the economic side of it yet, but these are welcome [referring to the proposal of Leviste’s group].”

Leviste is advancing the idea of a 100-percent RE portfolio for the country by year 2030 – albeit many players and even government view that this as an “easier said than done” thing especially if the RE sector will already exit the regime of FIT incentives.

He is similarly sounding off that the cost of technology had already gone down drastically, setting off a trend for the FIT subsidy scrapping for RE investments.

At the rate things have been going today though, solar developers are still slugging each other out just to get in into the FIT incentives.