Gov't releases guidelines for RE projects

MANILA, Philippines - The National Renewable Energy Board (NREB) has released two key guidelines that aim to encourage the use of and investments into renewable energy (RE).

Specifically, the NREB published the rules on net metering and feed-in tariff allowance (FIT-All) for public comments.

Net metering is a system that allows a two-way connection to the grid wherein users are charged for the net electricity consumption and credited for any overall contribution to the grid.

“The rules are being issued to encourage end-users to participate in renewable electricity generation,” NREB said.

It will also allow local players to gain actual experience in installing RE systems for net metering application under local conditions, the agency added.

All end-users in a good credit standing in terms of payments to their power provider can put up RE systems and sell excess electricity to the grid.

Applicable in the net metering program are wind, solar and biomass energy generation.

In the draft rules, the Department of Energy (DOE), Energy Regulatory Commission (ERC), National Transmission Corp., power distributors, among others, were tasked to provide mechanisms for the physical connection and commercial arrangements in the net metering program, NREB said.

Power distributors and qualified end-users, for their part, should grant regulators free access to all data generated by net-metering “to enable the creation of a knowledge-based resource for net-metering,” it added.

For safety reasons, NREB said power distributors may enter qualified end-users’ premises to inspect, maintain and operate the protective devices and read or test the meters and other facilities.

Industry regulator ERC will put up a set of special rules and pricing methodology for net metering.

Preliminary benchmark rates will depend on distribution utilities’ generation charges.

The ERC, for its part, scheduled a public consultation for the net metering rules on Sept. 21.

Meanwhile, the NREB published the FIT-All draft guidelines that aim to manage additional tariffs paid by end-users under the FIT scheme.

The FIT scheme, guarantees investments of RE firms through fixed rates that would be shouldered by consumers over 20 years.

“The FIT-All shall approximate the total payments required to be made to all eligible RE Developers under the FIT system based on forecasted values,” NREB said.

The FIT-All will be charged from customers per kilowatt-hour (kWh) for all on-grid areas in the Philippines.

NREB also created provisions for items like FIT-All differential, working capital allowance, administration allowance, disbursement allowance, and FIT over and under recovery.

The new rates will be collected by power distributors, the grid operator and retail electricity suppliers. It will then be remitted to the FIT-All fund administrator.

“While the FIT rules have designated the National Grid Corp. of the Philippines as administrator, there are ongoing discussions to enhance and streamline the functions of the FIT-All administrator,” ERC said.

Hence, the regulator set a public consultation for the FIT-All guidelines on Sept. 20.

In July, the ERC approved the FIT rates, which brings closer to reality the P106.85 billion worth of RE projects planned under the scheme.

Specifically, approved FIT that shall apply to green power generation projects are P5.90 per kwh for those sourced from run-of-river hydropower, P6.63 per kwh for biomass, P8.53 per kwh for wind and P9.68 per kwh for solar.

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