Alternative market being explored for RE post-FIT

by Myrna Velasco March 21, 2016
http://www.mb.com.ph/alternative-market-being-explored-for-re-post-fit/

Renewable energy (RE) developers are being prodded to face reality that the next round of projects will no longer be incentivized with feed-in-tariffs (FITs), hence, an alternative market for their capacities should already be explored and considered seriously.

No less than former United States vice president and global warming activist Al Gore brought the message to Philippine shores that RE has already reached ‘grid parity’, thus, it is already high time for subsidies such as FIT to be phased out.

While many Philippine industry players are still adamant to be in that phase or be stripped of a guaranteed revenue stream, there are others already seeing the light as to how the RE market could be shaped sustainably post-FIT era.

For one, First Gen chairman Federico R. Lopez has intimated that if there is any country aware of reaching grid parity for RE, that will definitely be the Philippines.

With massive power subsidies scrapped following the passage of the Electric Power Industry Reform Act (EPIRA), he opined that RE grid parity or FIT removal would be something that this market would be able to get its grip on.

“If there’s any country where grid parity will be reached first, you know its Philippines. Remember, we took off all our subsidies already in our power rates because of EPIRA, because of privatization,” Lopez stressed.

He emphasized though that beyond FIT, the RE sector shall look forward to technology advancements and alternative market to support future project developments.

“The thing here is, now renewables have to be matched also by storage. You’ve got to be able to match them with storage because solar and wind – they are not there all the time,” Lopez noted.

He further reckoned that “the ability to make renewables work in the country is enormous,” emphasizing that aside from nurturing the growth of emerging RE technologies, there is also a need to advance investments on the traditional sources such as geothermal.

It has to be noted that the Lopez group is also a well-entrenched and dominant player in the geothermal sector via its subsidiary Energy Development Corporation.



“Let’s not forget that geothermal doesn’t have feed-in-tariff and is made to compete against coal – cheap, imported coal which is causing health issues,” Lopez stressed.