November 23, 2017
ABOUT 10 PROJECTS in biomass and
run-of-river hydroelectric power generation are set to benefit should the
Department of Energy (DoE) approve the extension of the guaranteed
feed-in-tariff (FiT) offered for these renewable energy technologies.
“This week, I’ll formally endorse
(an extension), with all the position papers. I’ve been discussing it also with
the DoE. Let’s see. But you always have to be very positive about it,” Jose M.
Layug, Jr., chairman of the National Renewable Energy Board (NREB), said in an
interview on Wednesday.
Mr. Layug, who said the extension’s
chance of approval is “50-50,” added he will be asking for an extension of at
least three years for both technologies. The extension should be enough to allow
developers to finish their stalled projects, he added.
“We’re pushing for biomass and
run-of-river hydro [FiT] extension primarily because we have seen the impact of
FiT for the last three years. It benefited the consumers,” he said on the
sidelines of the Philippines-Spain Multilateral Partnership Meetings in Makati
City.
NREB advises the DoE on matters
relating to renewable energy policies. Its set timetable for the FiT ends this
year. DoE Secretary Alfonso G. Cusi had been vocal about his intention not to
extend the subsidy, which is uniformly collected from consumers to pay for the
investments made by early proponents of renewable energy projects.
“Contrary to what others are saying
that it was an additional cost, no, we saved consumers P20 billion, equivalent
to 8.6 centavos per kilowatt-hour (kWh) for the last three years,” Mr. Layug
said, referring to a study conducted by the Philippine Electricity Market Corp.
(PEMC), the governance body over the wholesale electricity spot market.
As of March, seven biomass power
plants had been scheduled for commissioning or completion this year, keeping
them in the running for the reduced FiT rate of around P6.60 for each
kilowatt-hour they export to the electricity grid.
The projects — four in Luzon and
three in Mindanao — have a combined capacity of 37.1 megawatts (MW). Should
they be able to start commercial operations this year, they qualify for the
P6.5969 per kWh degressed FiT rate for the renewable energy.
As of end-2016, the ERC had awarded
certificates of compliance to projects with a total capacity of 28.6976 MW, or
way below the 250-MW installation target set by the DoE for biomass plants,
which convert agricultural waste to electricity.
For run-of-river hydro, the DoE
under the previous administration set a target of 250 MW with a FiT rate of
P5.90 per kWh. As of May 2017, only four projects have been built with a total
capacity of 28.70 MW. The rate has been degressed this year to P5.8705 per kWh
as called for by the FiT rules.
“So we’re hoping they can fill it
up. Even if it doesn’t reach 250 MW, if we can have more run-of-river hydro
projects, we would be happy because it adds up to more renewable energy
plants,” Mr. Layug said.
He said three to five biomass
projects and around the same number of hydro projects stand to benefit from the
FiT extension. The projects had been put on hold because of the uncertainty
about their viability without a guaranteed tariff.
In all, Mr. Layug said the pending
biomass projects have a capacity of 100 MW, which is the same figure he expects
for run-of-river hydro. He said the FiT cost for consumers would be small. The
guaranteed FiT is for 20 years.
Asked about the extension’s chance
of approval, he said: “It depends on the secretary, and I think his
concern always is cost. But with the result of the PEMC study on the effect of
FiT, I think there is a lot of good reasons to approve the extension.”
“It’s clean energy. It saves the
environment. It has a lot of social value because as you know when we talk
about renewable energy, there’s always value to the farmers for additional
income. Even lands that are not used in the mountains can now be used,” he
said. — Victor V. Saulon
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