Business World Online
Posted on July 12, 2015 09:26:00 PM
A GROUP of solar energy developers in the country has proposed a further increase in the allocation for solar technology under the feed-in tariff (FIT) scheme.
THE PHILIPPINE Solar Power Alliance wants an extra 1,500-megawatt allocation.
The Philippine Solar Power Alliance (PSPA) submitted a letter to various officials of the Energy department, recommending a 1,500-megawatt (MW) hike in the allocation, to add to the current 500 MW.
“In lieu of the announcement made regarding the planned increase of installation targets and the results of our consultation with the members of the industry, may we respectfully submit our recommendation for an increased solar target [of] 2,000 MW effective after March 2016,” PSPA President Tetchi C. Capellan said in the letter, dated June 23.
Ms. Capellan cited the growing demand for power and lack of supply as the basis of the recommendation to allow solar service contracts -- with estimated total capacity of 1,500 MW as of June 2015 -- to enter into the commercial stage and be enrolled under the FIT.
“These holders have implicitly expressed their intention to build solar power plants and respond to the call of government to invest in power projects and mitigate global warming,” the letter further read.
PSPA’s Ms. Capellan also requested a consultation to share experiences of developers and structure a system that can facilitate the entry of more power producers.
Under the FIT scheme, renewable energy (RE) developers will be compensated at a premium rate for the electricity generated by their projects over a period of 20 years.
The Energy department recently ordered an increase of capacity allocation from the original 50 MW to 500 MW.
Likewise, the Energy Regulatory Commission (ERC) ordered the adoption of a new P8.69 per kilowatt-hour (/kWh) FIT rate for the technology, which is less than the P9.68/kWh set in 2012.
PSPA’s Ms. Capellan last May said the new allocation for solar power, albeit higher, may not be sufficient to cover the projects of smaller developers.
The new FIT rate for solar will be implemented for new capacities that will be covered by the revised 500-MW installation target -- which should be valid upon full subscription or until March 15 next year.
The FIT installation targets limit the capacity of projects for each renewable energy technology.
Originally, run-of-river hydro and biomass projects had 250 MW each; wind, 200 MW; and solar, 50 MW.
Besides for solar, the Energy department last April also ordered doubling the allocation for wind to 400 MW.
The ERC will conduct deliberations on the P7.93/kWh proposal of the National Renewable Energy Board for the new FIT rate for wind.
This rate was lower than the P8.53/kWh originally approved by the ERC in 2012.
The FIT rates are guaranteed returns for RE developers, which are paid for by all electricity end-users as FIT-Allowance (FIT-All) -- a separate line component in the power bills. Since February, consumers have been paying P0.0406/kWh FIT-All.
The current FIT rates for other renewable energy technologies are P5.90/kWh for run-of-river hydro and P6.63/kWh for biomass.
Lowering the FIT rates and increasing installation allocations will attract solar power developers and, at the same time, protect consumers from unreasonably high rates.
It will be the responsibility of the respective distribution utilities or retail electricity suppliers to collect this charge.
Afterwards, the collections will be remitted to the FIT-All Fund that will be administered by the National Transmission Corp., which can apply rate adjustments on a yearly basis. -- Claire-Ann Marie C. Feliciano source
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