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Biomass firm eyes FiT incentives for 3 projects

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A view of Universal Robina Corp.’s biomass plant whose 46-megawatt output will be equally distributed between its sugar mill in Negros province and the country’s national grid.

By Victor V. Saulon, Sub-editor

NEGROS ISLAND Biomass Holdings, Inc. has lined up three biomass projects on Negros island for inclusion in the government’s feed-in-tariff (FiT) program as the company aims for completion dates no later than end-2019, the extended deadline for developers to avail of the guaranteed rate for the energy they produce for 20 years.

Don Mario Y. Dia, vice-chairman of the holding firm, told reporters the three projects have different target completion dates, the last of which is possibly towards the end of next year.

The projects are San Carlos BioPower, Inc. with a capacity of 20 megawatts (MW); South Negros BioPower, Inc. with 25 MW; and North Negros BioPower, Inc. with 25 MW.

“We have a battery of expats in the group purposely to complete San Carlos,” he said about the project that is expected to be completed first.

“We’re now hopefully commissioning before the year ends,” he said, adding that the project has so far cost around $55 million to build.

The FiT program is an incentive scheme that grants priority connections to the grid, priority purchase and transmission of, and payment for, electricity generated from renewable energy (RE) sources wind, solar, ocean, run-of-river hydropower and biomass.

Under the rules, eligible RE developers are guaranteed a rate for 20 years for each kilowatt they produce. For biomass developers, the rate was set at P6.63 per kilowatt-hour. The rate was set at P6.5969 per kWh for 2017, when the scheme was supposed to end.

But on Feb. 23, 2018, the Department of Energy endorsed to the Energy Regulatory Commission the extension of the biomass and run-of-river hydropower installation targets for two years — from Dec. 31, 2017 until Dec. 31, 2019 — or upon successful commissioning of projects covering the unsubscribed balance of their respective installation targets, whichever comes first.

The rates for biomass for 2018 and 2019, are P6.5639 per kWh and P6.5310 per kWh, respectively.

Of the 250-MW installation target for biomass projects, up 170.33 MW had so far been taken up and considered FiT-eligible by the DoE, leaving developers in a race to complete their projects ahead of the others before the end-2019 deadline.

Mr. Dia, who is also treasurer of the three BioPower projects, said next to San Carlos, the holding firm expects to finish the two other projects towards the end of 2019.

“One month before the end of 2019 is [the completion of] North Negros,” he said, adding that South Negros should be finished by end-2019.

In all, he placed the cost of the projects at around $156 million. Their feedstock is sugarcane trash which is burned to produce energy.

Mr. Dia said International Finance Corp., the World Bank’s commercial arm, is keen on taking “the whole chunk” of the projects, allowing the company to regain its investment to fund more biomass projects.

“They just want to be there, and then they’ll just watch us. We will run the show,” he said. “They just want that (biomass) in their portfolio.”