Published May 21, 2017, 10:01 PM By Myrna M.
Velasco
In lieu of continuous pass-on to
consumers of the feed-in-tariff allowance (FIT-All) via the electric bills,
Senate Committee on Energy Chairman Sherwin T. Gatchalian has recommended that
government taps into the “Green Climate Fund” to defray subsidies to renewable
energy (RE) projects.
The South Korea-headquartered Green
Climate Fund was institutionalized within the parameters set by the United
Nations Framework Convention on Climate Change (UNFCCC) – primarily underpinned
by the $100-billion funding being mobilized by advanced economies to support
climate change mitigation and adaptation initiatives of developing countries.
The fund had already bankrolled and
financially backed low-emission and climate-resilient projects and programs –
including RE project installations in many least developed countries (LDCs);
small island developing states (SIDS); as well as African states.
While there are initiatives from FIT
administrator National Transmission Corporation (TransCo) to tap zero-interest
loan to plug collection deficiency in the FIT-All charges, Gatchalian opined
that such step may just entail delaying the bad news when it comes to eventual
cost impact on the consumers’ pockets.
“The intention to cushion the impact
of the FIT-All is very noble, however, loans will still be chargeable to all of
us through the budget and the GAA (General Appropriations Act),” he said.
His proposal then would be for the
government to alternatively explore that the FIT “can possibly be financed
through other international fund, such as the Green Climate Fund.”
Post the FIT subsidy regime, the
lawmaker is likewise propounding a reverse auction paradigm for the next round
of projects – primarily for the more aggressive developments on solar and wind
farm installations.
“Many advanced countries have
already transitioned to the reverse auction strategy to take into account the
massive decrease in the cost of RE technologies,” Gatchalian said.
He expounded that “this can be
executed in the Philippines so the consumers will not carry the burden of
excessive FIT.”
Categorically, many of the country’s
RE project developers are now primed for an auction process – either via the
proposed competitive selection process (CSP) or any other form of bidding that
could be anchored on the Renewable Portfolio Standards (RPS) – as the next
enticement scheme to capital flows in the sector.
In a reverse auction, project
developers will have to compete for prices at which they are willing to sell
their generated electricity. In many RE markets, that often resulted in lower
costs and better services for consumers.
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