DoE help for fixed FiT rates sought

Credit to Author: Jordeene B. Lagare| Date: Fri, 20 Dec 2019 16:49:12 +0000

A GROUP of biomass power plant developers is soliciting support from the Department of Energy (DoE) not to further decrease rates under feed-in tariff (FiT), a scheme that provides incentives to renewable energy (RE) developers in the Philippines.

In a letter dated Dec. 16, 2019, Biomass Renewable Energy Alliance Inc. (BREA) President Don Mario Dia asked the National Renewable Energy Board’s (NREB) assistance to ensure “fixed tariff” or “guaranteed fixed price” under the FiT program.

NREB is the bureau guiding the Energy department on the implementation of RE initiatives in the Philippines.

BREA is seeking steady FiT rates although the cost of fuel is increasing to encourage development in the country’s biomass sector.

But in a press chat, Dia said the ERC is planning to further degress FiT rates apart from what was mandated by the law.

Currently, the ERC is reviewing the adjustments, both for the existing rates and FiT allocation. “[T]hey’re re-interpreting the rules,” he told reporters.

“When we had a forum at the ERC, the review that they’re trying to do is bringing down the rates when in fact dapat pataas siya dahil magdadagdag ka ng (it should be increasing because you add the) CPI (consumer price index) and foreign exchange risk,” he added.

In the same letter, Dia said “there is a need to keep the investors whole by adjusting the FiT rate through the FiT adjustment formula also adopted by [the] ERC (Energy Regulatory Commission).”

“Such adjustment just maintains the value of the revenue and should not detract from the character of FiT as ‘fixed tariff’ per the RE Act or ‘guaranteed fixed price’ per the IRR of the same,” he told NREB.

As outlined in Republic Act 9513, or the “Renewable Energy Act of 2008,” the FiT program aims to hasten the development of emerging RE sources including wind, solar, ocean, run-of-river hydropower and biomass through a fixed tariff mechanism. Perks shall be given to RE developers for at least 12 years.

Initially, the ERC approved run-of-river hydro and biomass rates were P5.90 per kilowatt hour (kWh) and P6.63 per kWh, respectively. These were later reduced to P5.8705 per kWh for run-of-river hydro and P6.5969 per kWh for biomass.

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