August 28, 2019 | 10:36 pm
THE Department of
Energy (DoE) will allow single entities to bid for the entire 2,000 megawatts
(MW) of renewable energy capacity that it plans to auction in order to
encourage the development of clean power sources, an official said.
“It’s open. Why would
you disqualify?” Energy Undersecretary Felix William B. Fuentebella told
reporters on Wednesday on the sidelines of the Philippines Infrastructure
Conference at Manila Marriott Hotel in Pasay City.
The new renewable energy
(RE) capacity will be through a proposal by the DoE to set what it calls “green
energy rate.” Energy Secretary Alfonso G. Cusi announced in a forum last month
that the rate for the renewables would be competitive with current market
rates.
He clarified that the
green energy rate is different from the feed-in tariff (FiT) program and will
not be subsidized by consumers.
The FiT scheme was
meant to encourage the development of renewables by giving developers a fixed
rate for the energy they produce. The rate is higher than the prevailing cost
of electricity, with consumers subsidizing the rate by paying a FiT “allowance”
tucked in their monthly power bill.
“Instead, the green
energy rate will support the RE generators with securing PSAs (power supply
agreements) and selling their energy through the establishment of a fair
baseline price,” Mr. Cusi has said.
Mr. Fuentebella said
the agency is awaiting the recommendation of the National Renewable Energy
Board (NREB) on the auction mechanism. Mr. Cusi had said the board is expected
to submit its recommendations “in the months ahead.”
Asked about the
timeline for the framework and its target issuance, Mr. Fuentebella said: “This
year.”
“The DoE is looking
into the qualifications. Basically these should be renewable energy developers
of good standing but as far as putting in a cap or a disqualification, we have
not discussed it yet,” he said.
He dismissed fears that
one entity could end up cornering the entire capacity to be auctioned, saying
developers that offer a low rate upfront but put in an escalation clause for
the rates in future years will be subject to review. He said the Energy
Regulatory Commission (ERC) could end up setting the baseline rate.
Mr. Fuentebella left
questions unanswered on how the 2,000 MW target capacity will be distributed
among the country’s grids. He added issues such as whether hybrid RE sources
would be included, or whether solar battery storage would count into the
capacity to be auctioned. — Victor V. Saulon
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