Gov’t urged to simplify procedures for renewable energy projects
MANILA, Philippines—Players in the solar power sector are urging the government to simplify the procedures for applying for permits and registering renewable energy projects, as this is one way to reduce costs associated with such undertakings.
Guenter Matschuck, president of Maschinen & Technik Inc., said that apart from the absence of feed-in tariff (FIT) rates, the complicated procedures related to securing permits and licenses for RE projects was a huge deterrent for investors.
“The rules and regulations for eligibility are very complicated. It’s long and winding and not uniform. In Germany, you don’t need a lawyer to forge interconnection agreements,” he said in a briefing on Wednesday.
Philippine Solar Power Alliance founding president Ma. Teresa Capellan explained that RE projects had two main cost components: those related to actual construction and those related to transactions.
For solar projects, the cost of putting up solar power facilities continued to fall. The costs that investors incurred on the transaction side, when they sought permits and forged transmission agreements, however, remained the same.
This kept overall costs up, she said. If the government wanted to make the FIT rates as low as possible without sacrificing the viability of RE projects, all procedures required to set up a solar power project should be made as simple as possible.
“We want to sit with the (Department of Energy, the Department of Trade and Industry), and other government agencies to simplify and streamline the process,” she said.
Matschuck said simplified processes would also help encourage households to have their own solar power installations – something that would help reduce the need to put up new generation capacity.
Prospective RE investors are still awaiting the issuance of the FIT rates for RE projects.
The FIT scheme assures RE developers of future cash flows, as electricity end-users will be charged fixed amounts to cover the production of energy from renewable sources.
According to the National Renewable Energy Board petition filed with the Energy Regulatory Commission, 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. The FIT-All amounted to 12.75 centavos per kWh and would be borne by all power users by 2014, when all expected RE projects would have already gone on line.
German Solar Industry Association project manager Jan Michael Knaack said the FIT for solar power projects was actually too low for such projects to be viable.
“You’ll need some time to build up capacity. Once you have that capacity, costs will become cheaper,” he said, noting that it took Germany more than 10 years to really develop its RE industry and perfect its FIT scheme.
“The government needs to incentivize the market first. Solar has the potential to be a stable source of green energy,” he said.
