PSPA to energy department: Come clean on FiT rate perk for solar projects

by Lenie LecturaJune 15, 2016

from Business Mirror

The Philippine Solar Power Alliance (PSPA) strongly urged the Department of Energy (DOE) to release the parameters used to determine which among the solar-power projects were provided a feed-in tariff (FiT) rate of P8.69 per kilowatt-hour (kWh).

The list of solar-power projects that are entitled to the second round of FiT rate has yet to be made public by the DOE. The deadline for the completion of solar projects, which includes commerciality and injecting power into the grid, lapsed on March 15.

Energy Secretary Zenaida Y. Monsada said on Tuesday night that her office will release the list before she steps down on June 30.

But PSPA President Tetchi Cruz-Capellan wants the agency to also disclose the basis for its decision in coming up with the list.

“It’s a welcome development for the DOE to release the list, but why only 90 days after the deadline? We encourage [the] government to disclose the parameters of the companies that were included in the list, full disclosure of the companies so that there will be no questions that will arise as we move forward into the next FiT,” Capellan said on the sidelines of a forum on solar energy hosted by the environment committee of Finnex Research and Development Foundation Inc. on Wednesday in Makati City.

The DOE increased the capacity allocation of solar-power projects to 500 megawatts (MW) from 50 MW. The FiT rate, which serves as an incentive to renewable-energy (RE) developers to ensure the viability of their projects, for the first round stood at P9.68 per kWh.

The FiT rate for RE was based on the installation ceilings set by the DOE. The Energy Regulatory Commission (ERC), meanwhile, is the agency that sets the FiT rates.

Monsada, for her part, said her office needed to verify and revalidate the findings before the list is out. This was the reason she provided when asked for the delay.

“This is a very long process. We must check and recheck so that the DOE won’t be accused of midnight deals,” the outgoing energy chief said.

Monsada said there are around 800 MW of solar capacity vying for FiT incentives for the remaining slots in the 450-MW installation target for the second round. This means that some 350 MW of solar- power projects did not make it to the second round of FiT rate.

“I think it’s not a question of who is excluded, because if you really should be excluded, you should be excluded if you did not make it to the parameters you have set. There is no question about it. What we need to work on are the parameters that were the basis of their decision,” Capellan said.

The DOE has so far issued Certificate of Endorsement for FiT Eligibility (COE-FiT) to 11 solar-power plants accounting for 292.07MW to the ERC.

PSPA earlier feared of possible midnight deals, which may cause uncertainty on investments, especially foreign capital.

On a possible third round of FiT, Capellan said the DOE must review the implications of a build-first policy.

“The build-first policy is structured for an oversubscription because, once you do not control the issuance of the contracts from the beginning, the oversubscription is inevitable. There has to be a review of the build first. FiT 2 is a glaring example of how the effect of build first really hit investors.

“In other countries, you’re able to manage your FiT, supply and generation mix because you know exactly how many will go on stream. They will not build unless you issue contracts. Here, you issue contracts after you build. Whether they get into the first 500 MW, they’re already injecting into the grid. There is already supply there,” Capellan pointed out.