By Lenie Lectura - August 2, 2019
A CONSUMER group said it remains
cautious on the planned green energy tariff program of the Department of Energy
(DOE), which it said should not burden consumers by way of granting subsidy to
renewable-energy (RE) developers.
“The DOE is mulling over a green
rate for renewable-energy players. The DOE is planning to set a ceiling price
for new renewable-energy players to attract investors and promote competition
in the subsector, but LKI is cautious about this,” said LKI President Victor
Dimagiba.
Instead, the group urged the agency
to focus on the possible rate impact should the proposal is implemented.
“DOE should show that there is no
subsidy with RE under their proposal. Hopefully, this is not an innovation of
the feed-in-tariff and FiT allowance power rate scheme, which the consumer
group had consistently opposed,” Dimagiba said.
He also urged the DOE to first
conduct public consultations so consumers can participate in crafting the
proposed policy.
“There is already CSP [competitive
selection process], and that is why CSP is put in place. CSP is there to ensure
lower rates so now we are questioning the objective of the green rate,” he
added.
Energy Secretary Alfonso Cusi said
last month that his office plans to auction about 2,000 megawatts (MW) of
renewable-energy capacity under the proposed program. The tariff will be
auctioned off among the renewable-energy developers, depending on the type of
power that their respective projects are capable of delivering. He added
that a price ceiling will be implemented to achieve the lowest rate possible.
“We will put a [price] ceiling, then
they compete, offer the lowest. [It is] not per technology, but per type of
power, whether peaking or mid-merit,” Cusi said.
“We want to build 2,000 MW of RE in
10 years. DOE has already asked NREB [National Renewable Energy Board] to
review the concept of giving an allocation to RE. DOE will make a
green energy tariff rate that will be auctioned among them. We will put a
ceiling and then [they will] compete [in terms of who offers the lowest] rates.
It’s not per technology, but rather per type of power, if peaking or
mid-merit,”explained Cusi.
NREB is the advisory body tasked by
the law to recommend policies, rules and standards to govern the implementation
of the law, which granted fiscal and nonfiscal incentives to RE projects.
Earlier, Sen. Sherwin Gatchalian on
Thursday urged the DOE and NREB to conduct more studies on the planned green
energy tariff program.
“The DOE and NREB must conduct a
careful study on the program, especially when it comes to the implementation of
the green energy tariff rate, taking into consideration the declining costs of
RE technologies.
“Will this new tariff require
subsidy and if so, how much will the rate effect on consumers be? These are
some of the things that the DOE needs to thoroughly study before they push
through with the plan,” commented the senator who leads the Senate energy
committee.
Further studies, he added, would
ensure success and prevent any unnecessary pass on charges to consumers.
The proposed RE capacity auction
veers away from the FiT program, a system that provides guaranteed
payments in the form of power rates given to RE developers for 20 years.
FiT is basically an incentive in the
form of fixed rate per kilowatt-hour (kWh) for emerging power sources such as
solar, wind, biomass and hydro. It was meant to encourage RE developers to
invest at the initial stage and hasten deployment of RE.
However, the consumers are the ones
who shoulder the FiT rate via a uniform charge per kWh. At present, 22 centavos
per kWh is being collected from consumers.
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