Feed-in-tariff allowance for RE tech developers sufficient until year-end

MANILA  -The feed-in-tariff allowance (FIT-All) fund is enough to pay renewable energy technology developers
across the country until the end of the year, according to the Energy Regulatory Commission (ERC).

ERC Chair Monalisa Dimalanta explained that while her office had indefinitely extended the suspension of the collection of FIT-All, the fund was sufficient to pay clean energy developers.

“From our simulations based on certain assumptions of [spot market] prices, [the FIT-All Fund] is sufficient. We regularly monitor because spot market prices have an impact on amounts charged against the fund,” Dimalanta said.

FIT-All refers to the P0.0364-per-kilowatt-hour charge included in the electricity bills of all power consumers that serves as an incentive for renewable energy developers. This also helps encourage the private sector to help increase the share of renewables in the Philippine energy mix from the current 22 percent to 35 percent by 2030 and 50 percent by 2040.

It is among the financial incentives provided by the Renewable Energy Act of 2008 to promote the use of emerging clean energy sources, such as wind, solar, run-of-river hydro and biomass energy.

In September, the ERC extended the suspension of FIT-All collection “until otherwise lifted,” thus extending the benefit of reduced power rates for consumers due to escalating electricity rates.

While the suspension remains, developers still get paid through the existing FIT-All Fund, although the amount deducted from it highly depends on prevailing Wholesale Electricity Spot Market (Wesm) prices.

Dimalanta previously explained that the FIT-All Fund would run out if WESM prices were low.

“Before it (FIT-All Fund) gets depleted, if necessary, we will need to lift the suspension of collection of FIT-All so we can start building up the fund again to pay the renewable energy developers supplying power as part of the FIT program,” Dimalanta said.

Asked whether the suspension would be lifted anytime soon, the ERC’s top official clarified that they would need to continue observing movements in spot market prices “one month at a time.”

“We cannot say definitively that it won’t be lifted,” Dimalanta added.

The ERC had first suspended FIT-All collections in November 2022 for three months, but this was extended twice, with the commission citing inflation as among the causes. INQ

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