Renewable energy plan picks up pace

by Riza T. Olchondra, February 2, 2015
from Philippine Daily Inquirer

THE GOVERNMENT is keeping up its push for renewable energy (RE) projects to diversify energy sourcing and boost power supply in the country.

In an update on its RE campaign, the Department of Energy (DOE) said it has so far awarded 638 renewable energy projects as of end-2014 with a total potential capacity of 10,041 megawatts (MW), of which 2,584 MW were up and running.

Another 172 projects are awaiting approval, with a total potential of 1,511 MW, of which 697.8 MW were already installed, according to the report.

The number of projects awarded as of 2014 was 33 percent more than the 479 projects as of 2013.

The government is encouraging RE projects and even has an incentive program for it—the Feed-in-Tariff (FIT) scheme. Starting this month, consumers will start paying a fixed charge that will be used to pay the guaranteed FIT rates to RE power producers.

The Energy Regulatory Commission (ERC) has authorized the inclusion of the line item called FIT-Allowance or FIT-All in the billing of power consumers, ERC Executive Director Francis Saturnino Juan said earlier. The FIT-All will be collected by distribution utilities such as Manila Electric Co. (Meralco) and the pooled fund will be managed by National Transmission Corp. or Transco.

Since 2012, when the FIT rates were approved in the Philippines, the DOE has regularly reported on the number of RE projects awarded to monitor the pipeline of candidates for FIT. Although the projects have been awarded, there is a first-come first-served basis for FIT endorsements, making developers race for project completion and power plant opening.

The FIT system guarantees all eligible renewable energy plants an entitlement to the applicable rates for a 20-year period. The approved tariff rates are P5.90 a kilowatt-hour for run-of-river hydro; P6.63 a kWh for biomass; P8.53 a kWh for wind; and P9.68 a kWh for solar.

Energy Secretary Carlos Jericho L. Petilla said the DOE has been increasing the list of issuances for the Certificates of Endorsements (COE) to the ERC as part of efforts to make the country become a hub for sustainable energy development.

Fourteen RE projects have either been endorsed or set to be endorsed to regulators for accreditation so that the respective developers can claim FIT fees.

Meralco spokesperson Joe Zaldarriaga confirmed that starting February, Meralco customers would start getting billings with a line item for the FIT-All, with an initial fixed rate of P0.0406 a kilowatt-hour.

FIT is seen to benefit consumers in terms of encouraging more RE projects, which are relatively quick-built and tend to stabilize power prices over time, unlike the volatile price of energy from traditional sources. As to whether FIT-All serves the public during spot market surges in times of tight supply, experts said it would be a self-correcting mechanism wherein any windfall due to high spot market rates in certain billing periods would be retained in the fund to allow for tempered rate increases in the succeeding periods.

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