RE firms eye P35.7B from FIT subsidies

Published December 21, 2020, 7:00 AM by Myrna M. Velasco
https://mb.com.ph/2020/12/21/re-firms-eye-p35-7b-from-fit-subsidies/

The country’s renewable energy (RE) developers are eyeing to rake in next year P35.693 billion worth of feed-in-tariff (FIT) payments, a form of subsidy collected from all Filipino electricity ratepayers.

That will be an increase of roughly P5.0 billion from the FIT revenues set for year 2020 at P30.792 billion.

The aggregate FIT collections next year had been based on the application filed by FIT fund administrator National Transmission Corporation (TransCo) with the Energy Regulatory Commission.

In that filing, TransCo is seeking for P0.1881 per kilowatt hour FIT-Allowance charge that shall be passed on in the electric bills next year; or in the alternative, it could also be a FIT-All of P0.2008 per kWh.

The ERC has scheduled virtual public hearings on the updated FIT-All application of TransCo from January 6 to February 4 next year, as culled from notices it sent to relevant industry stakeholders.

The FIT revenues of the RE players had been relentlessly escalating since the initial enforcement in 2012 until this year, and beyond the P35 billion FIT payments next year. This is seen rising further to P35.825 billion in 2022.

Based on data filed with the ERC, FIT revenues of the RE companies had been at P10.194 billion around 2012-2015; then it climbed to P17.397 billion in 2016; P20.445 billion in 2017; P22.769 billion in 2018; and P24.847 billion in 2019.

For next year, the biggest pie of P11.139 billion of FIT payments will go to biomass developers; followed by wind industry players who will be cornering P10.058 billion; solar will get P7.649 billion; while hydropower’s share will be P6.847 billion.

As explained, the estimated FIT revenues had been calculated by multiplying the eligible RE generation per technology by their corresponding appropriate FIT rates.

In the estimated FIT revenues for next year, it was similarly stipulated that there will be recoveries of FIT differentials spanning from 2015 to 2020, in the scale of: P113.932 million for 2015; P340.556 million for 2016; P70.296 million for 2017; P62.813 million for 2018; P181.380 million for 2019; and P809.152 million for 2020.

This early, however, advocacy group Laban Konsyumer Inc. (LKI) is asking the ERC “to reverse the hefty increases in the FIT rate,” if referenced on a resolution that was issued for FIT rate adjustment issued by the ERC early this year.

LKI President Victorio Mario Dimagiba primarily sounded off alarm that “consumers will bear the brunt of higher rates.”

He highlighted that the FIT rate of solar in particular will be rising to as much as P11.2758 per kWh, even higher than the prescribed first wave FIT rate of P9.68 per kWh in 2014.

For wind, its FIT will also climb to P9.8976 per kWh, higher by P1.3676 per kWh compared to the FIT rate set for the first wave of developers at P8.53 per kWh, as enforced also in 2014.

“Easily, these are almost P2.00 and more than P1.00 per kWh adjustment for solar and wind FIT rates, respectively, that will have to be unfairly borne by the consumers,” Dimagiba stressed.