The Department of Energy (DoE) plans to implement a two-pronged strategy to divide the 760-megawatt installation target for renewable energy sources among interested developers.
According to Energy Undersecretary Jose M. Layug Jr., there is an urgent need to establish such a system because the government will only allow developers to put up facilities that can generate a total of only 760 MW over the next three years.
But the approved renewable energy service contracts as of June 7 could generate a hefty 2,823 MW if all these projects were to push through.
The DoE plans to impose an “eligibility criteria” to determine if a renewable energy developer is ready for “commerciality,” as required under the service contract terms, Layug explained.
The DoE will likewise check the proposed location of the projects to determine if the grid and the available transmission facilities in the area can accommodate the additional capacity to be generated from the project.
If two or more companies were to vie for a share in that 760-MW installation target, the DoE would have to conduct a bidding to see who among the developers could offer the cheapest possible power rates, Layug said.
The DoE is now asking all renewable energy developers to “police themselves.” The energy official explained that the proponents must determine who among them should first proceed with the projects.
Of the 760-MW installation target, as submitted by the DoE to the Energy Regulatory Commission, only 50 MW in new installations would be allowed for solar facilities, 200 MW for wind, 10 MW for ocean, 250 MW for hydro, and 250 MW for biomass.
Energy Secretary Jose Rene D. Almendras earlier said the government wants to pace the more expensive renewable energy technologies to help ease the burden of the universal levy called feed-in-tariff allowance (FIT-all) to be imposed on all electricity consumers.
Of the renewable energy technologies, solar developers and ocean energy project proponents will enjoy the highest feed-in-tariff rates of P17.95 per kilowatt-hour and P17.65 per kWh, respectively.
Investors in wind development may be given a FIT rate of P10.37 per kWh; for biomass, P7 per kWh; and for hydro, P6.15 per kWh.—Amy R. Remo