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FIT guidelines usher in more RE investments

The recent approval of the Feed-In-Tariff (FIT) Disbursement and Collection Guidelines has ushered in more investments in the renewable energy plants powered by solar, wind, biomass and run-of-river hydro.

This developed as the National Renewable Energy Board (NREB) considered the approval of the guidelines by the Energy Regulatory Commission last December 16, 2013 a policy milestone that will help project developers push their respective facilites into faster implementation.

To date, under the DOE’s “first come, first served” FIT policy, roughly 320 MW of much needed generation capacity will be added to the grid.

These resulted in direct investments flow of $800 million and the creation of roughly 3,500 construction jobs.

When completed by 2015, these power plants will provide much needed capacity that will help stabilise power prices in the Wholesale Electricity Supply Market (WESM).

A recent study by the University of Melbourne of actual 2012 WESM prices in the Philippines was used to estimate a saving of up to P950 million in 2012 for consumers.

“The RE industry congratulates both the ERC and the DOE for their continued efforts to bring much needed clean generating capacity to the Grid. Additional RE capacity not only stabilises power rates but will also provide jobs in mostly rural areas. It will also contribute to a cleaner and healthier environment for all,” said Atty. Pete Maniego, chairman, National Renewable Energy Board.

“Additional RE capacity not only stabilises power rates but will also provide jobs in mostly rural areas,” aside from their contribution “to a cleaner and healthier environment for all,” Maniego said.

The guidelines on FIT disbursement and collection had gone through extensive consultations prior to its approval by the Energy Regulatory Commission. The policy formulation had been jumpstarted by the Department of Energy (DOE) in collaboration with all stakeholders via the NREB.

According to the renewable energy body, the supply boost that will be provided by RE technologies may help soften prices in the Wholesale Electricity Spot Market (WESM), especially when spot market price offers are hitting peaks.

It has been emphasised that since RE technologies are covered by the must-dispatch rule, they have the potential to bump off more expensive technologies in the merit order of dispatch, primarily the diesel facilities.

The RE-FIT capacities will also be settled based on their prescribed feed-in-tariff per kilowatt hour (as differentiated by technologies such as hydro, wind, solar and biomass), therefore, they are not expected making price cap level bids in the WESM.

In the continued crafting of underpinning policies for the RE sector, it is the question on back-up capacities for intermittent RE resources that has yet to be clarified by government and other industry stakeholders.

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