RE developers left out shriveling in the sun

By: Riza T. Olchondra 12:38 AM June 30th, 2016
http://business.inquirer.net/211499/re-developers-left-out-shriveling-in-the-sun

The race for the second batch of feed-in-tariff (FIT) incentives for solar power ended last March 15, but solar power developers feel they are still vying for something they can’t fully grasp.

Clueless, these developers don’t know how they could proceed operating their solar plants in case they did not make the cut. In addition, the tendency of the government to keep the list close to its chest has made the second phase of the program controversial.

For the first cut of solar projects, developers were given a guaranteed return or FIT rate of P9.68 per kWh. Those who were able to build and operate their plants before March 15, 2016, the deadline for the second phase of awarding of solar FIT, were vying for a much lower rate of P8.69 per kWh.

Regulators and private renewable energy developers all agree FIT incentives make projects viable and bankable because of guaranteed rates for otherwise expensive technologies, especially those that utilize wind and solar energy.

However, the Philippine solar industry, represented by the Philippine Solar Power Alliance (PSPA), expressed fear the limited slots would just leave other solar power developers scrimping for loose change in order to operate.

PSPA recently asked Energy Secretary Zenaida Monsada to make clearer the FIT eligibility rules and provide updates on how solar companies would be able to qualify in their bid for the latest solar FIT rate.

PSPA legal counsel Beverly Ann C. Noriega told Monsada the program could be oversubscribed by 200 MW as indicated by the number of solar projects completed within the timeframe. Only a total of 500 MW would be able to make it.

“Right now, solar companies feel some sense of uncertainty on whether their projects are included in the FIT list. Some PSPA members reported they remain insecure as they have no way to verify if their plants are eligible even though they are already operating,” she said.

DOE Assistant Secretary Mario Marasigan could not say yet which developers have qualified since the department has to check and recheck which of the projects were able to pass eligibility requirements.

Monsada, for her part, said, “In any race or competition, there will be winners and losers. We at DOE just want to be sure that when we declare the winners, we can back it up with data [that is justified]. That’s why we are taking our time to check and recheck. There will always be questions [from] among those who did not make the cut. That’s to be expected.”

As of May 30, or 54 days since the deadline, the list has already been revised three times.

FIT time-out

The National Association of Electricity Consumers for Reform Inc. (Nasecore), meanwhile, has called on the Energy Regulatory Commission (ERC) to suspend the FIT program and for the DOE to show which among the renewable energy firms strictly complied with the program’s guidelines.

The power watch group recently sent a letter to ERC chair Jose Salazar requesting for the suspension of the FIT until such time all doubts about the compliance of companies have been removed.

Another group, Foundation for Economic Freedom, also recently filed before the Supreme Court a petition to halt the FIT program. Nasecore was one of the intervenors in that petition.

“We cannot turn a blind eye on this matter of national interest. The Filipino people have been faced with a never-ending series of power rate increases and because of FIT, they would again be forced to shell out more to pay for the generation costs of these solar farms. What’s worse is that these power plant developers are able to disregard the rules set for this process, which from the beginning was unfair to the regular electricity consumer,” said Nasecore president Pete L. Ilagan.

In Nasecore’s letter to Monsada dated April 7, 2016, it called attention to reports several solar plant developers bypassed requirements in order to beat the March 15 deadline.

“We recognize the need for incentives to encourage the entry of renewable energy but since the public will be shouldering this subsidy, we as consumers have the right to know if indeed these solar companies deserve our hard-earned money,” Ilagan said.

All electricity consumers nationwide will have to pay P0.12 per kilowatt-hour (kWh) consumed to subsidize the operations of FIT-eligible renewable energy developers. Currently, distribution utilities are collecting P0.04/kWh.

Asked for the possibility of suspending FIT, Salazar said the debate must first be resolved by legislators since the implementation of FIT was provided by law.

“Since FIT implementation is under the RE Law, this issue on whether we should impose FIT can be resolved by our legislators … Then we can act accordingly,” he said.