Cusi to OK circular allowing 2-year FiT extension for hydro, biomass

By Lenie Lectura - January 15, 2018

https://businessmirror.com.ph/cusi-to-ok-circular-allowing-2-year-fit-extension-for-hydro-biomass/

Energy Secretary Alfonso G. Cusi is close to signing a department circular that will extend the feed-in tariff (FiT) for existing run-of-river hydropower and biomass projects for two years.

“It’s on my table for signing already. I am just reviewing the numbers to make sure that there is no misunderstanding. Definitely, it’s not three years. The extension is around two years only,” Cusi said.

If and when the two-year extension is implemented, the developers of run-of-river hydropower and biomass projects will be able to finish construction and consequently avail themselves of the FiT rates for 20 years.

The 250-megawatt (MW) installation target for run-of-river hydropower and biomass expired at end-2017. However, the installation target was not fully subscribed.

The Philhydro Association Inc. had said that the main cause for delay has been the difficulty in securing permits from various national and local government agencies in particular, the water permit and Free and Prior Informed Consent with the indigenous people.

“The most of the three years allotted for the FiT installation target are already consumed by the permitting process alone,” Philhydro said.

Cusi said last week that the proposed extension would only cover existing run-of-river and biomass- power projects only. “The new projects will not be able to make it anymore. This is only for existing projects.  We are just looking at it from the perspective of the proponents.… We want to be fair to all. We are avoiding policies and programs that will result in overrun.”

Based on data from the Department of Energy, only five run-of-river hydro projects with a total capacity of 34.60 MW were issued certificates of endorsement to the Energy Regulatory Commission (ERC) for FiT eligibility. This means that 215.4 MW out of the 250-MW target have yet to be subscribed.

For biomass projects, 19 projects with a total capacity of 138.61 MW were awarded certificates of eligibility. There is still a balance of 111.39 MW from the 250-MW target.

The ERC had set a FiT rate of P5.90 per-kilowatt per hour (kWh) for run-of-river hydro. The rate has been degressed in 2017 to P5.8705 per kWh. For biomass projects, the FiT rate is P6.63 per kWh rate for the first round and a P6.5969-degressed rate in 2017.

Based on Philhydro’s computation on the impact of all the hydro projects coming online by 2020 to the FiT-allowance at the current digressed rate of P5.87 per kWh, allowing an extension of the hydro FiT and allowing hydropower developers to complete the 250-MW installation target will only have a P0.01034 per kWh impact to the FiT-All by 2020.