Cusi blasts costly RE-FIT in power rates

Published December 17, 2019, 10:00 PM By MYRNA M. VELASCO

https://business.mb.com.ph/2019/12/17/cusi-blasts-costly-re-fit-in-power-rates/

Taking aim at the project developers of renewable energy (RE) who lobbied strongly for the feed-in-tariffs (FITs), Energy Secretary Alfonso G. Cusi labeled the subsidy as one of the many ‘sins’ of the sector that had driven up electricity rates in the country.

 “The lobbyists should be crucified,” the energy chief averred during the launching of the Philippine Renewable Energy Market System (PREMS) which will be an innovative approach to making RE investments viable into the future.

When FIT system was introduced as an incentive for RE investments in the country way back in 2010, it was the RE developers themselves who strongly lobbied for it – and they also crafted the rules on how availment shall be enforced.

On a yearly basis, the Filipino consumers are shouldering ₱20 billion to ₱24 billion worth of subsidies in their electric bills for these FIT-qualified RE projects. It is reflected as a separate line item in the bills under FIT-Allowance (FIT-All).

Given the immense cost impact of the FIT incentives, Cusi said the next phase of the country’s RE development program must not come as punishing to the Filipino consumers.

“This renewable energy program that we’re doing now is because we want to scale down the previous sins… we want to bring it down,” the energy chief stressed.
Cusi said the way to do that is undertake competitive selection process (CSP) or auction, so it will be the cheaper costs of RE that will eventually be supplying and adding on to the power that will be delivered to end-users.

The DOE will be the supervising agency on the auction of RE capacities that shall be accommodated in the Renewable Portfolio Standards (RPS) policy of the government.

As initially targeted, there will be 2,000 megawatts of RE capacity that will be placed under auction early part of next year and for these to be taken in into the RPS program set for the sector.

The RPS is the next sphere of incentive mechanism that will stimulate the continuous flow of RE investments in the country because this requires the procurement of certain level of RE-generated capacity to become part of the overall supply portfolio of the distribution utilities.