Investors claim RE still can’t thrive in PH without subsidies

by Myrna Velasco March 25, 2016

http://www.mb.com.ph/investors-claim-re-still-cant-thrive-in-ph-without-subsidies/

Even with reported 80-percent drop in solar technology prices and 50-percent cost drop for wind, investors in the Philippines have opined that renewable energy would not still thrive in this market without subsidies or incentives.

RE technology maturity in this country is seen stretching longer compared to other markets due to array of factors being cited by investors.

For solar technology in particular, Aboitiz Power Corporation chief executive officer Erramon I. Aboitiz said “all the players without the feed-in-tariff, I think it would be quite difficult for solar to stand on its own.”

He added “what we envision is, without the feed-in-tariff, that solar can probably be coupled with another source of power … it has to be coupled with something else so that power generators can group it as portfolio.”

Aboitiz was explaining the intermittency of solar technology – wherein generation could precipitously drop with cloud overcast or when it rains, hence, a back-up or support technology has to be there to underpin the stability of its generation capacity.

In many markets, hybrid solar is already proliferating and battery storage is also thriving in the technology-coupling experiment with on-and-off RE sources like solar and wind.

On the parallel side of the fence, Eric T. Francia, president of AC Energy Holdings and head of Ayala Corporation’s Infrastructure Group, has noted that if FIT will eventually be ditched, other set of incentives for RE must be offered to ensure their sustainability.

He cited the much-awaited implementation of the Renewable Portfolio Standards (RPS) that will then require distribution utilities (DUs) to source a prescribed percentage of their supply from RE plants. This is among the prescriptions in the Renewable Energy Act.

Francia said bilateral contracting with the DUs shall also be encouraged – even under the competitive selection process (CSP) edict. At this point though, policymakers are still weighing whether to subject RE technologies to CSP or not; or a different auction system may eventually be laid down to be aligned with the RPS policy.

The Lopez group is also pushing for the crafting of a solid policy direction for green energy option – one that will give consumers the power to choose RE as their energy supply source.

Some groups are more forthright on their desire to have a third round of FIT incentives.  It could be gleaned that the country is now on its second wave of FIT for wind and solar technologies – a volte-face trend compared to other markets which are already drifting away from it.