DOE non-committal on 3rd round of FIT for solar

by Myrna Velasco April 2, 2016

http://www.mb.com.ph/doe-non-committal-on-3rd-round-of-fit-for-solar/

The race over solar installations may end up having multitudes not subsidized with feed-in-tariffs (FITs), but even with that scenario, the Department of Energy (DOE) is not committing to any third round of FIT incentives yet.

Energy Secretary Zenaida Y. Monsada has categorically told reporters that she will have to wait for the recommendation of the National Renewable Energy Board (NREB), the policy-recommending arm for investments in the RE sector.

However, she reckoned that any endorsement on the next wave of FIT incentives shall be anchored on solid justification and deeper studies.

Many countries with RE development programs are already ‘exiting the FIT paradigm’ and letting their projects genuinely compete in the marketplace.

Unfortunately for the Philippines, there is no clear-cut end in sight yet for that.  The terrain, ironically, is still for the developers of these multi-million dollar investments to soak up further into the pockets of penny-pinching Filipino consumers with their yet-unabated addiction to FIT subsidies.

They often present investment proposition as something that will be good for the environment, but that conceals the higher desire for money trail via the FIT incentives. That is in spite of the drastic downtrend of technology costs already in the global marketplace which could have been placing both wind and solar on grid parity with other energy-producing technologies.

For many markets, the tangible value-added and sustainable contribution of RE can only be considered if a market strives to reach level of maturity – and that is best manifested post-FIT regime.

Monsada acknowledged the on-going review as well as departure of other power markets from the FIT system, but she said the department will only come up with a definite decision based on proposal from the NREB.

The energy department considers the FIT as the strongest form of support to RE investments. At present, close to 400MW of wind capacities are FIT-underpinned; while solar will soon be at 500MW cap.

Nevertheless, the government will still need to cautiously weigh its next steps for the roughly 250MW of capacities that shall be dislodged in the second wave of FIT for solar.

Under the FIT system, qualified emerging RE projects could be guaranteed revenue stream for the next 20 years on their injected capacity to the grid. But for projects not making it, they might have to work harder on cornering those precious supply contracts with off-takers (capacity buyers) like distribution utilities or electric cooperatives.

Monsada said “the government prioritizes energy security and RE is one of the major contributors to increase power supply especially that we are also moving towards clean energy technology.”