NREB to ask DOE to extend period to complete hydro, biomass projects for FiT

By Lenie Lectura – May 24, 2017

from Business Mirror

THE National Renewable Energy Board (NREB) will propose to the Department of Energy (DOE) to extend the period for developers of hydro and biomass to complete their projects in order to avail themselves of the current feed-in tariff (FiT).

The DOE has set an installation target of 250 megawatts (MW) each for run-of-river (ROR) hydro and biomass power projects. However, as of December 31, 2016, a total capacity of 28.6976 MW and 144.804 MW for ROR hydro and biomass, respectively, were subscribed.

“We plan to ask the DOE to extend both biomass and hydro completion of projects hopefully by two years so that the target of 250 MW can be fully subscribed,” NREB Chairman Jose Layug Jr. said.

The NREB is the advisory body tasked with the effective implementation of renewable-energy projects in the country.

Layug said an official proposal from his office would be submitted to the DOE within the third quarter of this year.

“There’s an ongoing discussion with the board. The developers proposed an extension of between two yars to four years. But hopefully, we can submit it to the DOE not later than the third quarter of the year,” Layug said. The current FiT rates for hydro and biomass power projects are P5.8705 per kilowatt-hour (kWh)  and P6.5969 per kWh, respectively.

The approved rates are lower compared to the July 2012 FiT rates of P5.90 per kWh for hydro and P6.63 per kWh for biomass.

“FiT rates for ROR hydro and biomass shall be digressed at a rate of 0.05 percent for the period of January to December 2017, which is two years from the January 2015 FiT effectivity,” an earlier Energy Regulatory Commission order stated. These are the degressed FiT rates for January to December 2017 hydro and biomass plants with commercial operations within the year.

Under the FIT rules, the eligible RE plants shall be entitled to such digressed FITs corresponding to the year when they started commercial operation. The ERC may approve a different digression rate for different technologies.

The FIT is basically an incentive in the form of guaranteed power rate given to RE producers for 20 years. However, consumers are the ones who shoulder the FIT-All, a separate line component in the power bills.

The FIT rates were based on installation ceilings set by the DOE. The ERC is the agency that sets the FIT rates.