ERC pegs P1/kwh lower FIT rate for wind projects

MANILA, Philippines - The Energy Regulatory Commission (ERC) has approved a new feed-in tariff (FIT) rate for the next batch of wind projects which is lower by over P1 from the original rate.

The power regulator has approved a FIT rate for wind of P7.40 per kilowatt hour (kwh) ERC chairman Jose Vicente Salazar said in a text message to reporters.

FIT is a set of incentives given to renewable energy (RE) players to invest in the more expensive but less lucrative RE sector.

Under the FIT system, renewable energy companies are entitled to the following rates: P9.68 per kwh for solar, P8.53 per kwh for wind and P5.90 per kwh for run-of-river hydroelectric power.

The latest FIT rate for wind is lower by P1.13 from the original rate and slightly lower than the proposed tariff.

Last June, the National Renewable Energy Board (NREB) filed for a new wind FIT rate of P7.93 per kilowatt-hour from the current rate.

NREB is the advisory body tasked with the effective implementation of renewable energy projects in the country.

“The application was P7.93 as recommended by NREB but we adjusted the recommended amount on the basis of several factors, i.e. WACC, IRR, capacity factor, etc.,” Salazar explained.

Before vacating his post, Former Energy Secretary Carlos Jericho Petilla had approved an increase in wind energy allocation targets under the FIT system by another 200 megawatts (MW) as part of the government’s push for renewable energy.