Thursday, May 17, 2018

Govt puts on hold First Gen’s other hydropower projects


By Lenie Lectura - May 14, 2018

FIRST Gen Corp.’s other hydropower projects are put on hold until the government issues clear cut-rules on feed-in-tariff (FiT), an incentive in the form of guaranteed power rate given to renewable-energy producers.
“Our other hydro projects are deemphasized because there is no FiT. If there is an extension with the FiT and is clear, then we would proceed, but otherwise, it’s difficult for us to proceed because it takes years to put up hydropower projects,”  First Gen President Francis Giles Puno said.
Puno added hydropower development is actually a very long gestation, given the fact that hydropower prospects are located in remote areas. “It’s a very important resource for the country, and yet, it’s unclear as to whether or not we would be given a feed-in-tariff  for a long-term investment.”
The company owns the 132-megawatt (MW) Pantabangan-Masiway hydroelectric power plant complex  located in Nueva Ecija. It also operates the 1.6-MW Agusan mini-hydro in Damilag, Manolo Fortich, Bukidnon. First Gen was looking at expanding its greenfield operations in Mindanao by developing three run-of-river hydroelectric-power plants with a combined generation capacity of  95 MW, namely the 32-MW Bubunawan and 33-MW Tagaloan plants in Bukidnon, and the 30-MW Puyo in Agusan del Norte.
The Lopez-led firm acquired three new concessions in 2016. These are the 175-MW Binongan-Tineg in Abra, the 160-MW Cagayan 1N in Bukidnon, and the 17.5-MW Cateel in Favao Oriental.
Puno said initial work, including road pavement, in some of the new sites for its hydro projects has started, noting it takes three years to four years to finish one hydropower project. “It’s short of building the tunnel itself, but because the pronouncement is unclear, it is difficult for us to proceed.”
“The fine tuning of our message is this is different from solar. Solar can be built in a year’s time and solar deserves the race. In the case of hydro, the refinement is I don’t know whether that race applies to hydro because of the long-term gestation. And also to give our creditors assurance that it will be bankable, there will be a feed-in-tariff at the end of the construction phase. We don’t want to wake up at the end, then there’s no FiT,” he said.
He added that even the news on FiT extension for hydro projects is not clear. “Even their pronouncement of extending is not clear. We just heard that it is extended.”
Energy Secretary Alfonso G. Cusi earlier said he signed a document extending the FiT allocation for biomass and run-of-river technologies for two years. The signed document provides the developers to fill up the remaining allocation for biomass and run-of-rive hydropower plants until 2020.
The FiT rate for hydro stood at P5.90 per kilowatt-hour (kWh), with an an installation target of 250 MW. The FiT rate was lowered to P5.8705 per kWh for run-of-river hydro.
Earlier, the Philhydro Association Inc. told the Department of Energy that the installation target “has not been fully subscribed due to factors beyond the developers’ control.”
These include the difficulty in securing clearance from the National Commission on Indigenous Peoples and the long gestation developments from permit processing to conduct of studies.

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