Published
August 29, 2019, 10:00 PMBy Myrna M. Velasco
A
benchmark pricing pre-approved by the Energy Regulatory Commission (ERC) will
be cast as a “reference tariff’ in the government’s auction of new 2,000
megawatts (MW) of renewable energy (RE) projects.
Energy
Undersecretary Felix William Fuentebella said the propounded benchmark rates
will be set system-wide – or calculated based on avoided cost for Luzon,
Visayas and Mindanao grids.
He
noted that based on the recommendation of the National Renewable Energy Board
(NREB), the benchmark price will be the avoided cost plus estimated costs of
baseload, mid-range and peaking RE technologies.
“That
benchmark pricing will also be the guide in the GEOP (green energy option
program) as well as for the DUs (distribution utilities) – these are being
explored for the pre-approved rate that will be applied in the auction,” he
said.
Energy
Secretary Alfonso G. Cusi disclosed in a budget hearing in Congress that the
initial 2,000MW of RE installations is targeted for bidding within the year –
and will underpin the country’s Renewable Portfolio Standards.
The
energy chief noted that the 2,000MW will be “auctioned to all developers,” but
he emphasized that the pricing benchmark will be the “avoided cost” –
explaining further that such refers to “the blended cost that we are all paying
right now.
On
the GEOP, Fuentebella emphasized that consumers in the 500-kilowatt consumption
range would be able to contract for supply coming from RE capacity.
He
said that was brought down by half compared to the 1.0-megawatt threshold that
was initially set voluntarily under the Retail Competition and Open Access
(RCOA) policy.
Cusi,
for his part, has stressed that in the technology-neutral energy mix paradigm
of the Department of Energy, there will be “no quotas” to be set even for RE
projects.
Nevertheless,
he qualified that the energy department will just kick off with the 2,000MW
auction for new RE installations because they would also need to consider the
variability aspect of some RE technologies as well as the hurdles of
integrating them to the grid.
Fuentebella
has also divulged in a Congressional hearing that there will be a separate
auction for micro-grid areas that will be utilizing RE in their provision of
electricity to consumers in these domains.
The
details for that particular bidding for RE ventures are still being fleshed
out, but he said it will be open to all generators.
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