Feed-in tariff to eventually reduce rates

by Alena Mae S. Flores, February 13, 2015
from Manila Standard Today

LAOAG CITY, Ilocos Norte—Philippine Electricity Market Corp., the administrator of the country’s Wholesale Electricity Spot Market, assured Friday that the feed-in tariff on renewable energy projects will eventually reduce power rates.

PEMC made the assurance after declaring its readiness for the integration of renewable energy resources in the electricity bourse.

All intermittent and feed-in tariff-qualified resources, under the Renewable Energy Act of 2008, are entitled to must- and priority-dispatch at the WESM, subject to the issuance of qualification and registration guidelines.

This means eligible renewable energy resources identified under the RE Act will be given preference in the dispatch scheduling in the market. There are currently around 503.9 MW of intermittent renewable energy projects registered with the WESM.

As a result of the preferential dispatch, eligible renewable energy resources will be given priority to contribute to the electric grid by offering a zero bid, thus displacing expensive fuels, which may possibly result in lower prices in the spot market as observed by other power exchanges.

“There will be reduction on power rates. FIT all is like an OPSF [Oil Price Stabilization Fund]. Assuming system wide, the impact is P1 per kilowatt-hour reduction, compared to the increase to your total bill which is P0.04 equivalent to FIT,” PEMC president Melinda Ocampo told reporters here.

Ocampo said like the OPSF, any price differential to the actual renewable energy consumption will be returned to consumers.

PEMC since 2012 has worked on the appropriate framework for the implementation of the must- and priority dispatch of renewable energy resources to encourage their use.

PEMC, a non-stock, non-profit corporation incorporated in November 2003 on the initiative of the Energy Department and with representatives from the various sectors of the electric power industry, serves as governance arm of the WESM.

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