Gov’t may retain FIT for hydro, biomass

The government is still considering restoring support for hydro and biomass electricity generation projects but definitely terminating preferential treatment for other platforms like solar and wind, Energy Secretary Alfonso Cusi said.

Cusi said in an Energy Investment Forum at the Makati Shangri-La on Thursday that prices now were much lower compared to the previously approved feed-in tariff (FIT) rate of about P10 per kilowatt-hour.

The FIT was designed to provide priority dispatch for renewable energy sources, with the intention of encouraging investments in solar, wind, hydro and biomass. The assumption was that the dispatch of renewable energy would result in lower costs for consumers.

But Cusi said power generated from these technologies now cost as low as P3 per kwh compared to the FIT rate of P9.68 kwh that was first offered in 2012 to solar installation investors.

“(That) is more than three times lower than the (FIT) rate that was considered under the past administrations,” he said, adding that this development should translate to lower power rates for consumers.

“Hence, the FIT era is over,” Cusi reiterated. “It is now a question of how we can foster a renewable industry that is competitive and affordable, as an alternative to conventional energy.”

Even then, Cusi said the Department of Energy was still weighing its options on the issue of the resumption of the FIT scheme for hydro and biomass.

Jay Layug, chair of the National Renewable Energy Board (NREB), said the 15-member body had formally sought an extension of the FIT scheme by three to five years.

Layug said biomass and hydro projects that had already been accredited for the FIT scheme fell short of the budgeted capacities for each technology.

Layug said the FIT scheme had allowed for the accreditation of 525 megawatts of solar power projects, 400 MW of wind power and 250 MW each of biomass and hydro.

“Solar power was oversubscribed,” Layug said, meaning the approved applications exceeded the target of 525 MW.

The NREB chair, a former undersecretary at the DOE, added that wind power was “fully subscribed” while biomass and hydro were both “undersubscribed.”