by Myrna Velasco May 1, 2016
The National Renewable Energy Board
(NREB) has laid down justifications on solar industry players’ bid for the
third round of feed-in-tariff (FIT) incentives – anchoring it mainly on arguments
whacking their perceived enemy – coal plants.
However, in the tangible and prudent
world of power systems, these technologies cannot just plainly be treated as
‘adversaries’ – because they play a role in ensuring supply security and
reliability.
Coal, for one, is reliable for
baseload capacity; while RE could be a useful complement to the world’s
desperate need to immediately pare down carbon emissions.
The board of the renewable energy
body approved on Thursday (April 28) the new FIT rate that must be enforced on
solar developments. This is already the third round for this subsidy-leaning
industry.
Following the board’s go-signal,
NREB chairman Pete Maniego said they will already submit the recommendation
both to the Department of Energy (DOE) and the Energy Regulatory Commission.
But, since Energy Secretary Zenaida
Y. Monsada previously sounded off to media that they will only subscribe to
proposed third round of FIT incentives if the justifications and arguments
presented by the NREB would be valid and ‘strong’, Maniego is making sure that
their business case will be given weight.
In an email message to the Manila
Bulletin, the NREB chair pointed out that both sides of the technology (RE and
fossil fuel-fired plants) must be presented – including their entitlements to
both fiscal and non-fiscal incentives under the Investment Priorities Plan.
He opined that “the return on
investments of fossil-fired power plants are certain and practically guaranteed
as they are shielded from fossil fuel price fluctuations.”
That, he explained, has been
anchored on the fact that “under pass-through provision of their PPAs (power
purchase agreements) which usually have a term of 25 years, the fuel costs are
passed on automatically to consumers.”
The NREB chair, apparently, refers
to the previously State-guaranteed independent power producer (IPP) contracts
that have already been transferred to private sector administrators.
He similarly reiterated the outcome
of a recent study by the Philippine Electricity Market Corporation (PEMC)
showing what should have been a possible reduction in electricity rates if ‘the
merit order effect of RE” would have been the only factor to be considered.
Nevertheless, because they are
incentivized with fixed FIT rates, their overall impact in the blended rate as
passed on to consumers would still be a rate hike to the tune of P0.12 per
kilowatt hour (kwh) as FIT-Allowance this year.
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