Investors in renewable energy seek financing
Investors in the renewable energy (RE) sector are rolling up their sleeves to tackle the need for financing now that the long-awaited guidelines on guaranteed rates, also known as feed-in-tariffs (FIT), have been finally issued.
Queenie Rojo, executive director of the Ethanol Producers Association of the Philippines (Epap), said in a phone interview that investors were “very happy” the guidelines were finally out after almost a year since the FIT rates were approved.
“This will encourage investors to add capacity but we also want to raise the issue of financing. RE roll-out would be faster if there are available grants or some form of assistance so that investors can access financing,” Rojo told the Inquirer.
Antonio L. Tiu, president and CEO of listed Greenergy Holdings Inc. (formerly MUSX Corp.), said in a separate interview that there was so much investor interest in RE projects. He said a loan assistance and public-private partnership arrangements would sweeten the deal for those venturing in the relatively uncharted RE power production sector.
Greenergy is investing in RE and other “green” energy projects in the Philippines and China. These include the new 18-megawatt biomass power plant of San Carlos BioPower Inc. in the Visayas; biofuel firm Isabela Alcogas Corp.; a $1.3-billion program for wind power projects in the Philippines, and a number of biomass projects in China.
In a statement posted on Friday, the Department of Energy (DOE) said it had issued a circular on the guidelines on the selection of FIT-eligible RE projects in line with plans to triple the country’s RE supply by 2030. Delays in the deployment of the scheme, critics have said, were feared to discourage RE investments that could ease electricity supply problems in Mindanao and far-flung areas in the country.
FIT offers proponents of RE projects guaranteed payments based on fixed per kilowatt-hour rates for energy that will be distributed through the distribution or transmission network.
Last year, the Energy Regulatory Commission approved the following FIT rates: wind—P8.53/kWh; biomass—P6.63/kWh; solar, P9.68/kWh, and run-of-river hydropower—P5.90/kWh. As approved, eligible RE plants will be entitled to the above mentioned FIT rates for 20 years. After this period, the tariffs will be based on prevailing market prices or on the contract price with off-takers.
The DOE said that under its circular, only RE developers with valid and subsisting Renewable Energy Service/Operating Contracts (RESC) could apply for FIT by submitting a document declaring the commercial feasibility of a project and an approved work plan.
The DOE assured investors and stakeholders that the process of determining FIT eligibility “will be carried out with due diligence and transparency.”
The submissions will be evaluated before DOE will issue certificates that will allow the construction of specific projects. The RE projects will then be subjected to site validation and inspection to check their compliance with interconnection requirements in coordination with National Grid Corporation of the Philippines (NGCP). It is only upon confirmation of the successful commissioning of the project that the Certificate of Endorsement (COE) for FIT eligibility will be issued by the DOE on a first-come-first-served basis.
For transparency and efficient monitoring, the DOE said, it had setup a monitoring board on its website to show the status of FIT eligibility implementation and other important updates concerning the matter.
