Bidding pushed for RE incentives

MANILA, Philippines - The Joint Congressional Power Commission (JCPC) wants to bid out incentives for upcoming renewable energy projects instead of all ventures getting perks, the Department of Energy (DOE) said.

DOE Secretary Jose Rene D. Almendras said the JCPC sent a letter to the DOE as members of the Congress and Senate favor bidding out incentives under the feed-in tariff scheme.

“I sent the [JCPC] letter to Energy Regulatory Commission (ERC). I forwarded the letter to ERC saying here is a letter from the JCPC because I cannot do [the recommendations],” Almendras said.

“The way to determine the FIT is to bid it out the installation target,” Almendras said.

The feed-in tariff scheme, whose implementation is already delayed by almost three years, guarantees investments of renewable energy firms through fixed rates that would be shouldered by consumers over a set period of time.

Proposed feed-in tariff rates are P7 per kilowatthour (kwh) for biomass, P17.65 per kwh for ocean technology, P17.95 per kwh for solar power, P6.15 per kwh for run-of-river hydropower and P10.37 per kwh for wind power. The rates are estimated to add roughly P0.12 per kwh to consumers’ electricity bills.

“They want to bid out the pricing,” Almendras said, adding that companies looking for incentives should bid for the lowest feed-in tariffs.

The DOE already approved a 760-megawatt (MW) installation target for renewable energy projects under the scheme. It is composed of 250 MW each for hydroelectricity and biomass, 200 MW for wind power, 50 MW for solar energy and 10 MW for ocean technology.

Almendras said the ERC, which came out with the guidelines on the feed-in tariff calculation, is the agency tasked to revise the guidelines and implement the project.

The ERC earlier targeted the implementation of the feed-in tariff scheme in the second quarter despite an ongoing hearing with the Court of Appeals.

Last year, the Foundation for Economic Freedom filed for a temporary restraining order to stop hearings of the regulator on the FIT.

“In other countries like China, India and Brazil, they used to bid out their renewables but nothing happened because companies lower the rates to win the bidding,” said Pete H. Maniego Jr., chairman of the National Renewable Energy Board.

However, low feed-in tariff rates did not make the winning bids viable, Maniego said.

The Renewable Energy Act of 2008 mandates the establishment of a feed-in-tariff for qualified renewable energy projects.

To date, the Philippines sources 35 percent its total power requirements from renewable energy sources.