HIGHER ELECTRICITY RATES? The Federation of Philippine Industries wants to have the issuance of feed-in tariff rates for wind and solar power projects deferred, saying that including the projects in the FIT scheme would result in much higher electricity rates
The Federation of Philippine Industries is urging the Energy Regulatory Commission (ERC) to defer the issuance of feed-in tariff (FIT) rates for wind and solar power projects as these technologies are still too expensive to use as mainstream power sources.
In a position paper submitted to the ERC earlier this month, the group said that including wind and solar power projects in the FIT scheme would result in much higher electricity rates—something that both consumers and industries could ill afford as rates were already too high now.
“FIT rates, especially for wind and solar, are so high that these will result in significant increases in the power rates, which are already globally uncompetitive,” FPI said.
The group of local manufacturers also noted the intermittent nature of wind and solar power technologies. Since these could not produce electricity 24/7, such generation facilities would need ancillary generation as back-up support.
“These will further increase the actual costs charged to the consumers. Hence, the federation is requesting to hold in abeyance the giving of feed-in tariffs to solar and wind energy,” the group said.
While opposing the issuance of FIT rates for wind and solar power projects, FPI supported the inclusion of biomass-fed generation facilities in the FIT scheme.
According to the National Renewable Energy Board petition filed with the ERC, solar developers and ocean energy project proponents would enjoy the highest FIT rates of P17.95 a kilowatt-hour (kWh) and P17.65 a kWh, respectively. Investors in wind development would be given a FIT rate of P10.37 a kWh; for biomass, P7 a kWh; and for hydro, P6.15 a kWh.
Payment for the use of clean energy will come from a uniform per-kWh charge, dubbed FIT Allowance (FIT-All), which will be collected from all electricity end-users.
Based on the NREB’s proposed FIT rates, the FIT-All amounted to 12.75 centavos a kWh. This universal levy would be borne by all power users by 2014, when all expected renewable energy projects would have already gone on-line.
The ERC has set the hearing for the FIT rates on September 20.