April 23, 2018, 7:45 am
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Deadline extension on FIT plants less than 3 years

Energy Secretary Alfonso Cusi said the extended deadline of construction for run-of-river hydro plants and biomass power plants eyeing to benefit from the feed-in-tariff (FIT) incentive will not be three years as speculated.

Cusi confirmed a draft executive order (EO) on the extension is up for signing but clarified the period of  extension will “definitely” not reach three years to keep the program within the Duterte administration’s term.

This would also avoid turnover issues.

“(The draft EO) is already on my table, for signing. I just want to make sure that there is no misunderstanding. We are just fixing some numbers since we are running a balance and we are tallying it to avoid misunderstanding. I want it stated…(that the extension is) definitely not three years,” Cusi told reporters in a briefing in Taguig.

 Cusi said the Department of Energy (DOE) is fixing the final number of capacity that is still up for FIT certification as there are some projects that have been endorsed to, and waiting the approval of, the Energy Regulatory Commission (ERC).

The DOE was initially not keen on extending the validity of the said premium due to its possible impact  on power rates but conceded and started a review on the issue.

 Last year, the National Renewable Energy Board also lobbied for the extension of the allowable period to develop hydro and biomass plants that may be certified under FIT even at degressed rates.

 Installation targets for run-of-river hydro and biomass projects aimed to be under FIT is 250 megawatts (MW) each. However, only a small portion of the targets for the said technologies were taken up by developers since 2015.

 As of end-2016, the total capacity of run-of-river hydro plants with FIT is only at 28.6976 MW and 144.8 MW for biomass projects.

 In March 2017, the Energy Regulatory Commission approved the degressed rates of FIT for run-of-hydro and biomass power plants that will avail the said premium for the said year. In a resolution, the regulatory body said that from P5.90 per kilowatt hour (kwh), premium for run-of-river hydro plants will go down to P5.8705 per kwh while biomass power plants’ premium will decrease to P6.5969 per kwh from P6.63 per kwh.

 The degression is legal under the law which indicate that rates should go down by 0.5 percent two years after the FIT incentive scheme became effective in January 2015.

 At present, the premium being paid to FIT qualified developers are sourced from all electricity consumers as a P0.18 per kWh uniform charge and the government is allowed to yearly evaluate the said charge whether to increase or decrease it as needed.
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