Business World Online
Posted on May 16, 2011 11:26:56 PM
BY EMILIA NARNI J. DAVID, ReporterDRAFT RATES for renewable energy subsidies were submitted to regulators yesterday, a development expected to assuage investor concerns over the nascent industry.
The long-awaited "feed-in tariffs," said National Renewable Energy Board Chairman Pedro H. Maniego, are now with the Energy Regulatory Commission (ERC) for approval.
ERC Executive Director Saturnino C. Juan said the rates could be finalized in three months, paving the way for the computation of the pass-on charge to consumers.
Under the proposal, biomass power producers are guaranteed P7 per kilowatt-hour (kWh) on top of whatever contract price at which they sell their electricity, Mr. Maniego said in a text message to BusinessWorld.
Payments will be sourced from a universal charge to be paid by end-users.
The feed-in tariff for "run of river" hydroelectricity, meanwhile, was pegged at P6.15/kWh, while that for wind power would be P10.37/kWh for wind power.
The rates are highest for ocean and solar power, at P17.65/kWh and P17.95/kWh respectively, Mr. Maniego said.
"[We] decided the feed-in tariff rates after almost two years of consultations with stakeholders including renewable energy developers," he said, noting the proposals were "based on our appreciation of available information and on what is fair to the developers, investors and end-users, among others."
The rates will lowered if investments breach installation targets per energy source, Mr. Maniego added.
The proposed installation target is a total of 830 megawatts (MW) with 250-MW goal for both hydroelectricity and biomass, 220 MW for wind power, 100 MW for solar energy and 10 MW for ocean technology.
The feed-in tariff and the installation targets will be automatically reviewed by the ERC after three years.
These proposed feed-in tariffs were due last year but the deadline was moved to end-April and again to May 16.
Investors behind existing or planned renewable energy projects -- among them First Gen Corp. and NorthWind Power Development Corp. -- have been urging the government to decide on the rates to provide predictability.
Moving forward, the ERC is now expected to conduct public consultations and then make a final decision.
"We will first check the filing to make sure there are no missing documents then we will set public consultations," Mr. Juan said.
"It’s too early to state a timeline but we earlier promised that once we have received the feed-in tariff we want to finish it within 90 days," he added.
Sought for comment, Philippine Solar Power Association Executive Director Tetchi Cruz-Capellan said the installation targets were too low.
"We are appealing to the government to amend its submission in keeping with international trends of high renewable energy installation targets," Ms. Capellan said.
Mr. Maniego clarified, however, that the targets are not meant to be limits.
"Installation targets are not intended to be caps or limits. Under the feed-in tariff rules, it is primarily a trigger for the ERC to review and re-adjust the feed-in tariffs," he said.
"This is to prevent over-installation should the feed-in tariff proved too attractive," Mr. Maniego added.
ERC Executive Director Saturnino C. Juan said the rates could be finalized in three months, paving the way for the computation of the pass-on charge to consumers.
Under the proposal, biomass power producers are guaranteed P7 per kilowatt-hour (kWh) on top of whatever contract price at which they sell their electricity, Mr. Maniego said in a text message to BusinessWorld.
Payments will be sourced from a universal charge to be paid by end-users.
The feed-in tariff for "run of river" hydroelectricity, meanwhile, was pegged at P6.15/kWh, while that for wind power would be P10.37/kWh for wind power.
The rates are highest for ocean and solar power, at P17.65/kWh and P17.95/kWh respectively, Mr. Maniego said.
"[We] decided the feed-in tariff rates after almost two years of consultations with stakeholders including renewable energy developers," he said, noting the proposals were "based on our appreciation of available information and on what is fair to the developers, investors and end-users, among others."
The rates will lowered if investments breach installation targets per energy source, Mr. Maniego added.
The proposed installation target is a total of 830 megawatts (MW) with 250-MW goal for both hydroelectricity and biomass, 220 MW for wind power, 100 MW for solar energy and 10 MW for ocean technology.
The feed-in tariff and the installation targets will be automatically reviewed by the ERC after three years.
These proposed feed-in tariffs were due last year but the deadline was moved to end-April and again to May 16.
Investors behind existing or planned renewable energy projects -- among them First Gen Corp. and NorthWind Power Development Corp. -- have been urging the government to decide on the rates to provide predictability.
Moving forward, the ERC is now expected to conduct public consultations and then make a final decision.
"We will first check the filing to make sure there are no missing documents then we will set public consultations," Mr. Juan said.
"It’s too early to state a timeline but we earlier promised that once we have received the feed-in tariff we want to finish it within 90 days," he added.
Sought for comment, Philippine Solar Power Association Executive Director Tetchi Cruz-Capellan said the installation targets were too low.
"We are appealing to the government to amend its submission in keeping with international trends of high renewable energy installation targets," Ms. Capellan said.
Mr. Maniego clarified, however, that the targets are not meant to be limits.
"Installation targets are not intended to be caps or limits. Under the feed-in tariff rules, it is primarily a trigger for the ERC to review and re-adjust the feed-in tariffs," he said.
"This is to prevent over-installation should the feed-in tariff proved too attractive," Mr. Maniego added.
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