Bidding Mulled For RE Installations

Manila Bulletin

By MYRNA M. VELASCO

July 22, 2011, 2:27am

MANILA, Philippines — To prevent concentration of renewable energy (RE) developments to just one or few companies, the Department of Energy (DoE) is seriously considering proposals to undertake competitive bidding for projects that must be included in the 760 megawatts of initial installation targets.

Energy Secretary Rene D. Almendras indicated that the feed-in-tariff (FIT) charges that must be collected from consumers must be fairly distributed to various RE developers.

“The FIT must not be given to just one company…we might reach that point when we have to do competitive bidding, but we are waiting for the ERC (Energy Regulatory Commission) decision,” the energy chief said.

He noted the auction can be done through the DoE or the ERC depending on the outcome of the FIT petition lodged by the National Renewable Energy Board (NREB) with the regulator.

The bidding proposal, according to Almendras, was first raised by Senator Sergio Osmeña III who similarly raised fears that some project developers might gobble up chunk of the installations, hence, they would be the only ones benefitting from the FIT Allowance to be collected from consumers.

For instance, since the solar installation has been drastically reduced to 50 megawatts, there are apprehensions that only one or two companies might dominate in the development process.

Some solar developers have been proposing capacities of 30 to 100 megawatts, thus, it is expected that the scramble on cornering the installations that shall benefit from FIT will be more intense on that particular technology.

In the case of wind installations, the greenfield projects expected would now be just for 167 megawatts because the target already included the 33-MW facility of Northwind Power Development Corporation.

The project blueprints presented by wind developers portend of capacity ranges from 40 to more than 80MW. The 200MW installation target then might just be a contest among three to four companies.

The energy secretary enthused that even with the FIT-All getting pared to P0.105 per kilowatt-hour because of the reduction in installation targets, “I am still not satisfied, and I will never be satisfied because that will still be added cost for consumers, but I have to follow the law.”

There were also proposals to just blend the installations and not assign the targets per technology, but Almendras said “it’s the law (Renewable Energy Act) which prescribes it, so we cannot divert from that.”