THE National Renewable Energy Board (NREB) on Monday said that there is a need to amend existing rules on feed-in tariff (FiT), as well as the Renewable Energy Act, if a policy of the Department of Energy (DOE) to auction off RE projects is pursued.
NREB Chairman Pedro H. Maniego, in a text message, said that the DOE circular must be reconciled with the provisions of the Renewable Energy Act and the FiT rules on setting and granting the FiT rates.
Under the law, the Energy Regulatory Commission (ERC) is mandated to set the FiT rates, while the DOE is the lead implementing agency of the Renewable Energy Act. It also approves the FiT eligibilty of the Renewable Energy (RE) plants.
“However, power tariff and rate setting are under the authority of ERC,” said Maniego, while stressing that if auction is to be used to set the FiT rates, the rules must be changed.
“If the auction will be utilized to set the installation, but in so doing will affect the FiT rates to be granted to developers, then the rules must also be changed. Under the present rules approved by ERC, auction mechanism is not one of the methods for determining and setting the FiT rates,” he said.
Under Department Circular 2015-07-0014, the share of RE in the energy mix should be at least 30 percent. The renewable sources of power include solar, wind, biomass, ocean and hydro.
Based on 2014 DOE Power Statistics, 25.64 percent of the country’s total power generation are sourced from RE facilities or equivalent to installed generating capacity of about 32.87 percent of the country’s installed capacity.
“To maintain the share of RE in power generation, the DOE hereby adopts a policy of adopting at least 30-percent share of RE in the country’s total power-generation capacity through the holistic implementation of the FiT System and other pertinent provisions under the RE Act and RE IRR [implementing rules and regulations],” the circular stated.
FiT is the per kilowatt-hour (kWh) rate guaranteed to RE developers to ensure the viability of their projects. Consumers are the ones who shoulder this under FiT-Allowance (FiT-All), a separate line component in the power bills. They are now paying an additional P0.0406 per kWh since February this year.
To be sure that this policy is strictly enforced, the DOE will use the FIT installation targets: 250 megawatts (MW) for hydro; 250 MW for biomass, 400 MW for wind; 500 MW for solar, and 10 MW for ocean. When these targets are met, a bidding will take place.
“Upon the full subscription of the existing FiT installation target, the succeeding rounds for the installation targets for FiT-eligible resources shall be made through an auction system to be adopted by the DOE,” the circular, which takes effect 15 days upon its publication, stated.
The present system involves filling FiT allocation on a first come, first-served basis. When the slots are filled, the DOE will then adjust the quotas to accommodate more RE developers.
“We have to conduct consultation and coordinate with both DOE and ERC in view of the DOE circular recommending a 30-percent minimum share of RE in the total power-generation capacity and an auction mechanism for implementing the next round of FiT,” Maniego added.