ERC wants cap on solar projects

by Alena Mae S. Flores – May 22, 2016 at 11:56 pm

from Manila Standard Today

The Energy Regulatory Commission asked the Energy Department to limit the solar power projects availing of the feed-in tariff rate at 500 megawatts to lessen the impact on power cost.

“We computed the FiT rate based on 500 MW, so if it’s going to exceed 500 MW, definitely we have to adjust the [power] rates,” ERC chairman Jose Vicente Salazar told reporters.

FiT refers to incentives given to renewable energy developers such as solar projects in the form of fixed, high rate paid by the government for their power output.  FiT rates were incorporated in the power bill of consumers and are now known as FiT allowance.

The regulator earlier approved an FiT-allowance of P0.124 per kilowatt-hour, to be collected by the National Transmission Corp. and used to pay the renewable energy developers.

“The position of the commission is to limit to 500 MW [the solar capacity] until we determine the impact on the rates considering that our previous approval was for that [P0.124 per kWh],” Salazar said.

The department approved a 50-MW installation for solar projects under the first round of installation targets at a rate of P9.68 per kilowatt-hour. The installation was increased by an additional 450 MW but with a provision that the power projects would be completed by March 15, 2016 to provide additional capacity for the dry months.

ERC granted a lower rate of P8.69 per kWh for the second wave of installation target covering the balance of 450 MW.

The Energy Department, however, has yet to come out with the final list of solar developers that were able to beat the feed-in tariff race for the 450-MW solar capacity.

Energy Secretary Zenaida Monsada said as much as 300 MW of solar capacity would not be eligible for the second wave of solar FiT rate.

Monsada earlier said the department would announce the final list of the solar projects that qualified for the second wave of feed-in tariff for solar once the list was finalized.

“We are sure that there will be questions, that’s why we want to be transparent,” Monsada said.

She said a total of 800 MW of solar power capacity was presently being evaluated by the department.

The Philippine Solar Power Solar Alliance earlier asked the department to exercise prudence in disqualifying completed solar projects from the FiT availment.

PSPA president Tetchie Capellan said the government should recognize the role of solar energy in adding capacity to the national grid and for helping avert possible shortages.

“The alliance asks the DoE  for prudence in disqualifying  completed solar projects. These companies poured billions of pesos into solar projects and their possible disqualification to the RE [renewable energy] incentives not only denies the investors the opportunity to recover their capital. More importantly, it kills the momentum created by the DoE and erodes investors’ confidence,” Capellan said.

She said the government should encourage policymakers in finding a common ground to recognize solar companies that reached 80 percent electro-mechanical completion and delivered electricity to the grid.”

“There is already an admission from national authorities and utility distribution companies on the tightness of supply.  Undeniably, the contribution of 750 MW solar energy in the daytime when demand is at its peak, cannot be ignored  – the 750 MW solar provided more security to the grid, averted a possible supply shortage as well as delivered economic benefits to the consumers and the rural economy,” she said.

PSPA also asked the government to provide the industry with a win-win solution in consideration to the huge fund poured in the countryside.

“More importantly, solar power plants today averts the power crisis. It also hedges the inevitable increase in oil prices, and effectively reduce the consumers’ burden. The entry of solar balances the environment impact of fossil-fuel-dependent power plants as well as contributes to the national agenda of reducing greenhouse gas emissions,” she said.