EDC seeks FIT for geothermal developments

by Myrna Velasco – May 12, 2016

from Manila Bulletin

Geothermal is the next renewable energy technology proposed to be incentivized with feed-in-tariff (FIT) to the tune of P5.00 to P6.00 per kilowatt hour.

In a press briefing on the sidelines of the annual stockholders meeting of the Energy Development Corporation (EDC), company president Richard B.Tantoco indicated that future project developments in geothermal would be highly viable if the technology would be included in the FIT system.

“If you take a look at the FIT that we’re giving to solar and wind, and you add the costs of intermittency – at P0.60 to P0.90 per kWh, it costs a lot to bring them in…why are we not prioritizing geothermal,” he opined.

In the current environment landscape, he noted that geothermal projects would not be as attractive because if their capacities are offered to off-takers like the distribution utilities (DUs), they cannot compete with coal.

Nevertheless, he emphasized that if the country is serious with its commitment at the United Nations-led 21st Conference of the Parties (COP) on a low carbon energy future, then it should incentivize technologies that will bring it into attaining that goal.

He said the potential for additional geothermal capacities could hover at 1,100 to 1,400 megawatts based on the development lead set by the Department of Energy. The country’s developed geothermal capacity is currently at 1,900MW.

Tantoco said the FIT incentives could be aligned for greenfield or future geothermal developments, if extending to existing facilities or projects would not be palatable to policymakers.

EDC director Francis Giles B. Puno added that “the holy grail is to be able to do baseload – the geothermal can do baseload but it should be encouraged more.”

Tantoco stressed that a cap on installation may also be enforced – similar to what is being done with the other RE technologies.

He said the DOE could “give an initial cap of a few hundred,” but qualifying the fact that “they (government policy framers) have to recognize also that geothermal will take time from the time you explore to the time the first kilowatt-hour is produced – you’re looking at six years.”