PHL issues long-awaited feed-in-tariff rate for renewable energy

The long-awaited feed-in-tariff-rate for renewable energy, expected to pave the way for some P106.85 billion in investments, was approved by the Energy Regulatory Commission, ERC said Friday. 

 

The ERC tariff rate “will definitely cushion the impact of implementing the FIT incentive mechanism under the RE Act on the electricity rates, while still being sufficient enough to attract  new investments in renewable energy,” ERC executive director Francis Saturnino Juan said in a statement.

 

This is win-win for all," Juan added.

 

“Feed-in tariff is a premium rate paid for electricity fed back into the electricity grid from a designated renewable electricity generation source like a rooftop solar panel system or wind turbine, according to Energy Matters.

 

The ERC approved rates are P5.90 per kilowatt hour (kWh) for run-of-river hydro, P6.63 per kWh for biomass, P8.53 for wind and P9.68 for solar.

 

The rates were lower than what the National Renewable Energy Board proposed in a filing before the ERC on May 16, 2011. The proposed rates were P6.15 per kWh for run-of-river hydro, P7 for biomass, P10.37 for wind, and P17.95 per kWh for solar.

 

However, the commission, did not set and issue the rate for ocean thermal energy. It said that ocean-thermal-energy conversion needed further studies as well as more data for the Philippine situation.

 

"We express our appreciation for the ERC in keeping with mandate of the Electric Power Industry Reform Act by deliberating and issuing the FIT rates at the soonest possible time," Energy Secretary Jose Rene Almendras said in separate statement.

 

"We are fully aware of the tedious task and the challenges of the Commission in ensuring a balanced view to be able to serve the needs of all stakeholders regarding the said rates,” the Energy chief noted.

 

“We are thankful for their effort and we hope that all other stakeholders continue to cooperate with everyone to be able to establish a competitive and dynamic power market that is envisioned to benefit all," Almendras added.

 

Renewable energy developers welcomed this development, saying they may have to review their own numbers due to the lower rates the ERC approved.

 

"… We are very thankful sa ERC for finally releasing the FIT. This is basically a rate significantly lower than what the industry applied for," Philippine Solar Power Alliance founder Tetchie Capellan said.

 

The next 12 months should be crucial as it would reveal weather the Philippine feed-in-tariff rate would attract investors, Capellan noted.

 

She said they will have to wait for the next 365 days whether the FIT rates will attract investments.

 

Because of limited installation targets, solar energy developers will not have more than 5 MW of installed capacity, she added. 

 

"We have to study what are the considerations of the ERC in arriving at this FIT for solar then we can assess if it will still be financially feasible to construct and operate," JJ Samuel Soriano, Sunconnex president said.  Sunconnex, a US based firm is planning to develop solar projects in the Philippines. — VS, GMA News