Renewable energy developers seek FIT extension

MANILA, Philippines -  Renewable energy developers are pushing for the extension of  the feed-in tariff (FIT) allocation for biomass and run-of-river technologies set to expire by year-end to avail of incentives amid challenges faced by developers in building the projects.

The government, however, has indicated it is inclined to nix the FIT incentives moving forward as this adds burden to consumers.

The National Renewable Energy Board (NREB), the advisory body tasked with the effective implementation of renewable energy projects in the country, will study the proposal to extend the allocation deadline by another two to four years, NREB chairman Jose Layug said during the recent Power and Electricity World Philippines forum.

 “They (developers) have explained to us challenges for both biomass and run-of-hydro. NCIP (National Commission on Indigenous Peoples) is primarily an issue because of the long process to get their consent for water permit. Biomass feedstock is also a challenge for them,” the NREB official said.

As DOE’s advisory body, NREB’s recommendation will be critical in the policy decision for the renewable energy sector.

Layug said the NREB is targeting to complete and submit its proposal not later than the third quarter this year.

“We will definitely discuss with the board on May 29-30 [then] we will endorse our resolution to the Department of Energy (DOE),” he said.

Unlike solar and wind, the FIT allocation for biomass and run-of-river technologies remain undersubscribed three years after the program’s implementation.

Originally, run-of-river hydro was approved a rate of P5.90 per kilowatt-hour (kwh) and biomass with a rate of P6.63 per kwh. Each technology was allotted an installation target of 250 MW each.

The FIT rates have already been lowered to P5.8705 per kwh for run-of-river hydro and to P6.5969 per kwh for biomass effective this year.

As of end-December 2016, a total 28.6976 MW has been taken up by existing run-of-river hydro projects while 144.80 MW has been consumed by completed biomass plants.

Power developers have stressed run-of-river hydro projects are long gestation developments that would cover the period to secure permits and undertake studies, therefore need more time for completion to avail of FIT perks.

 “They have to realize that hydro development is actually very long gestation but at the same time, in order for us to go ahead, we have to be assured that there is a market,” First Gen Corp. president and COO Francis Giles Puno said earlier.

Meanwhile, the DOE has said the lack of technology, financing, and feedstock supply are among the hurdles in developing the biomass projects in the country.