RE board awaits ERC deliberations of FIT rates

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MONDAY, 20 JUNE 2011 20:35 PAUL ANTHONY A. ISLA / REPORTER

THE National Renewable Energy Board (NREB) is still waiting for the Energy Regulatory Commission (ERC) to conduct public consultations on its proposed generation rates for renewable energy-sourced projects.

“The NREB has already submitted the petition for feed-in tariff [FIT] rates last May 16. The ERC has 90 days from May 16 to conduct public consultations, and we’re still waiting for that,” Energy Undersecretary Jose Layug Jr. told reporters in an interview on Monday. 

The energy official said public consultations will be held all over the Philippines to determine whether the FIT rates proposed are feasible or acceptable to the ERC.

Layug pointed out that while each resource has its own per kilowatt-hour (kWh) costs, consumers will not pay as much as the rates which have been earlier proposed.

He further explained that the proposed FIT rates will still have to be divided to the total energy consumption to come up with the FIT-Allowance (FIT-All).

Layug said the FIT rates for biomass is P7/kWh; hydro, P6/kWh; wind, P10.95/kWh; solar, P17.95/kWh; and ocean is P17.65/kWh. 

“But that’s not final and is still pending with the ERC. And right now, at those rates, the calculation is about P0.12/kWh, but that’s not yet final. We always say that because the ERC still needs to conduct public consultations.

The ERC might even deem we have to reduce the rates, so it still might not be P0.12/kWh,” he added.

In contrast, Layug said Meralco recently increased generation rates by P0.50/kWh from energy sourced from conventional fuel. 

“In the long run, it’s not necessarily expensive, perhaps it is [expensive] this early because the technology is still emerging. In the long term, depending on the movement of coal, natural gas and oil—which we all see it has been going up. We anticipate that ultimately there will be grid parity between renewable-energy sources and conventional ones, if not, it might even be cheaper.

At present, Layug said consumers pay between P5 and P5.50/kWh from conventional sources of energy.            

Pete Maniego, NREB chairman, earlier said while renewable-energy developers have appealed for a higher feed-in tariff computations, the board still expects the feed-in tariff allowance to go up by less than P0.15/kWh.

Under the implementing rules and regulations of the Renewable Energy Act of 2008, power users will be required to pay a uniform P1/kWh in FIT-All that will be collected and placed in a fund to be administered by the National Grid Corp. of the Philippines.

NREB, on the other hand, was created by Republic Act 9513 or the Renewable Energy Act, and is tasked to recommend policies and action plans of the emerging renewable-energy industry.

“The estimated impact on the FIT-All based on the current proposed FIT rates and installation targets is lower than the figure given by the Renewable Energy Caucus. NREB FIT-All impact is only P0.1138/kWh,” Maniego said.