NREB sets flexibility in RE capacity purchase

By Myrna M. Velasco – July 15, 2017, 10:00 PM

from Manila Bulletin

The National Renewable Energy Board (NREB) is injecting some flexibility in the incremental purchase of renewable energy (RE) capacity that off-taker distribution utilities would have to adhere to under the renewable portfolio standards (RPS).

That had been based on the current draft of the RPS Rules that the RE body had recently set out for public comments and stakeholder inputs.

In an interview with reporters, NREB Vice Chairman Juan Antonio Bernad explained that the prescribed percentage of RE capacity supply procurement had been reduced from originally at 2.15 percent to 1.0-percent increment annually.

“Before, there was a proposal for 2.15 percent, now we set it at a starting point of 1.0 percent. Every year, (DUs) have to add 1.0 percent of some RE in (their) supply,” he said.

As a point of reference, that will be the requirement set for DUs under the RPS rules on RE capacity procurement – and that will be of any RE technology being the supply source.

He added that the planning horizon had been stretched to 2040 – from originally at year 2030 – to align it with the “Ambisyon 2040” industrialization goals of the Duterte administration.

“We changed the timeframe from 2030 to 2040 but the percentage is still at 35 percent (share in the power mix). The reckoning is anything that came after the law was passed, that was from 2009,” Bernad said.

He added the RE capacity procurement would not just be limited to the emerging RE technologies, but even the conventional ones like large hydro and geothermal facilities.

The RPS mandates electricity generation increase from RE resources and such capacity shall be taken up as part of the supply portfolio of off-takers, primarily the distribution utilities.

In a related development, Department of Energy Director Mario Marasigan asserted that consultation processes on the RPS may be completed around September – with the major multi-stakeholder event happening this August.

The tricky part of the discourse is bringing it to the level of the stakeholders in Mindanao, he said, given the grid’s unique market dynamics and the lingering strife in some parts of the region.

But he said they are confident of meeting the target, so the RPS could be aptly timed to the scheduled review of the feed-in-tariff rules (FIT Rules) by December this year.

For the other policy proposition to incentivize RE developments post the FIT regime, Marasigan noted that the rules governing “Green Energy Option” has already been crafted and would be ready for submission to Energy Secretary Alfonso G. Cusi next month.

These twin policy developments have been awaited by the RE sector so they can finally advance fresh round of capital mobilization in the industry.