THE Department of Energy (DoE) will be coming out with a decision within the year whether it will approve a recommendation to extend the guaranteed feed-in-tariff (FiT) for run-of-river hydroelectric power and biomass projects, its top official said.
“We are reviewing it,” DoE Secretary Alfonso G. Cusi told reporters. “We will have to make a decision before year’s end.”
He said he was told by his staff that the proposal had been submitted to his office by the National Renewable Enery Board (NREB), which advises the agency on issues relating to renewable energy including the FiT.
“I was told it has been submitted to my office, but I haven’t read it,” he said.
The FiT system offers guaranteed payments on a fixed rate per kilowatt-hour (kWh) for 20 years for emerging renewable energy sources, excluding power generation for the developers’ own use.
Consumers who are supplied with electricity through the distribution or transmission network share in the cost of the feed-in-tariff through a uniform charge per kWh.
The DoE has set a target of 250 megawatts (MW) each for run-of-river hydro and biomass although the agency’s records show only 34.60 MW and 138.61 MW, respectively, were taken up. The FiT for run-of-river hydro and biomass ends this year.
The proposal to extend the FiT for the two technologies comes after stakeholders raised the issues they met in developing their projects, including the long gestation period before completing a run-of-river hydro that are likely located in remote areas.
In a letter to Mr. Cusi dated Nov. 14, Philhydro Association, Inc. (Philhydro) requested clarification on the FiT mechanism “in view of the fact that the installation target for [hydropower] has not been fully subscribed due to factors beyond the developers’ control.”
“The clarification or any explanation of this policy would be very relevant to projects which are almost complete, those which have obtained confirmation of commerciality before December 2017 and projects that took into consideration the FIT in its investment decision prior to its construction,” said Philhydro, a non-government organization composed of hydropower developers, manufacturers, construction companies and consultants.
In the letter, Philhydro President Jose Silvestre Natividad said the organization had submitted its position paper to NREB on Sept. 3, 2017 seeking the extension of the FiT for hydropower projects “until 2020 or until the original installation target has been met.”
Earlier this month, NREB Chairman Jose M. Layug, Jr. said he will endorse the FiT extension to the DoE for at least three years. 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.
About 10 biomass and run-of-river hydroelectric power generation projects are set to benefit should the DoE approve the extension, Mr. Layug said.
Should the biomass developers be able to start commercial operations this year, they qualify for the P6.5969 per kWh degressed FiT rate for the renewable energy.
For run-of-river hydro, the rate has been degressed this year to P5.8705 per kWh as called for by the FiT rules. — Victor V. Saulon