By Lenie Lectura - May 11, 2017
FIRST Gen Corp. said its hydro-power
projects are under review mainly due to the government’s unclear policy
direction on incentives.
“Our hydro-platform pipeline of
projects is currently being reviewed given the policy stance of government of
not providing feed-in-tariff [FiT] incentives,” First Gen President Francis
Giles Puno said in his report delivered during the company’s annual
stockholders’ meeting.
The FiT is an incentive in the form
of a guaranteed power rate given to renewable-energy (RE) producers for 20
years.
The Energy Regulatory Commission
(ERC), in its March 2017 order, issued the digressed FiT rates to cover January
to December 2017 for run-of-river (ROR) hydro plants, from P5.9 to P5.8705 per
kilowatt-hour (kWh), and biomass plant, from P6.63 to P6.5969 per
kWh.
The ERC said there are only four
hydro plants issued certificates of endorsement by the Department of
Energy as of May 9. Of the 250-megawatt (MW) installation target for ROR hydro,
only 28.7 MW was subscribed, leaving 221.3 MW of unsubscribed capacity.
“If anything, we feel
renewable-energy sources, like hydro, with its lengthy development and
construction phase, will require assurance of a market,” Puno said. First Gen
was looking at expanding its greenfield operations in Mindanao by developing
three ROR hydroelectric power plants with a combined generation
capacity of 95 MW, namely, the 32-MW Bubunawan and the 33-MW Tagaloan plants in
Bukidnon, and the 30-MW Puyo plant in Agusan del Norte.
The Lopez-led firm acquired three
new concessions last year. These are the 175-MW Binongan-Tineg in
Abra, the 160-MW Cagayan 1N in Bukidnon, and the 17.5-MW Cateel in Davao
Oriental.
“But the pronouncement of the
Department of Energy is unclear to us. Because hydro FiT is not fully taken up,
so the whole idea was to be able to construct the hydroelectric plants that we
have been developing and for the unutilized portion of the FiT be allocated,”
Puno said.
Because there is a chunk of
unutilized capacity in the first round of FiT for hydro power, Puno said the
government must realize hydro-power development is actually a long gestation
period, given the fact hydro-power prospects are located in remote areas.
“Hydro takes long and you have to
assure investors there will be a market for that electricity. In order for us
to go ahead, we have to be assured that there is a market. And so, until that
clarification is there, then we’re slowing down what should be an accelerated
development, but once it’s clear, then we will proceed because we have also
acquired quite a number of new concessions,” Puno said.
First Gen, he said, is a “believer
in hydro” and the government should be strongly promoting it “because from an
inclusive growth perspective, that’s a very inclusive growth program to support
development in remote areas”.
Similar to geothermal, once properly
built, Puno said these assets can operate for several decades and provide
competitively priced electricity to consumers. They also have the added benefit
of helping provide investments in the remote areas of the country where
investments are needed the most.
“Ironically and frustratingly, it
appears our country promotes the development and job creation in remote coal
mines in other countries like Indonesia, rather than develop clean renewable
sources like hydro that can create more employment in remote areas of our
country,” Puno said.
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