DOE reviewing FIT extensions for hydro, biomass

MANILA, Philippines — The Department of Energy (DOE) is reviewing whether it should extend its policy on feed-in tariff (FIT) incentives after hydropower developers appealed to add another three years to the incentive scheme.

Energy Secretary Alfonso Cusi told the Joint Congressional Power Commission (JCPC) the agency will come out with a decision on the FIT for run-of-river hydropower and biomass projects before it expires by year-end.

“We are reviewing it since the decision is needed to be filed before year-end,” he said.

Cusi said the National Renewable Energy Board (NREB) has already submitted to the DOE its recommendation for the extension of the FIT program for the two technologies.

Part of that recommendation is the position paper of Philhydro Association Inc., composed of hydropower developers, manufacturers, construction companies and consultants, which was also submitted to the DOE.

In its position paper, Philhydro is seeking clarification to the FIT for run-of-river hydropower since its installation target “has not been fully subscribed due to factors beyond the developers’ control.”

“The clarification or any explanation of this policy would be very relevant to projects which are almost complete, those which have obtained confirmation of commerciality before December 2017 and projects that took into consideration the FIT in its investment decision prior to its construction,” Philhydro president Jose Silvestre Natividad said in the letter.

Earlier in the year, the DOE –through the Renewable Energy Management Bureau (REMB) – started advising hydropower developers to look for off-takers because the FIT is set to expire on Dec. 31, 2017.

Its data showed 445 hydropower projects have been awarded service contracts but only four run-of river hydropower facilities have reached construction, successful commissioning and have been endorsed under the FIT system as of June 30.

Also, there are over 787 megawatts (MW)of potential hydropower capacity but only 26.6 MW have achieved commissioning.

The disparity stems from the long list of requirements, such as permits required for the Free and Prior Informed Consent (FPIC), Ecological Study and Sustainability Plan for Water Permit with the National Water Resources Board (NWRB), negotiation with the National Grid Corp. of the Philippines for the system impact study and facilities study, among others.

“The difficulty in securing the necessary permits from various national and local government agencies in particular, the water permit and FPIC process that are peculiar to hydropower projects,” Philhydro said.