THE Department of Energy (DoE) will start to meet with distribution utilities this month to look into their power demand projections in the next two years in time for the implementation of rules covering renewable portfolio standards (RPS).
“We will start making the rounds this month. We will meet with each of the distribution utilities to look into their targets in 2020,” said Energy Undersecretary Felix William B. Fuentebella in an interview.
He said 2020 is the year when the distribution utilities (DUs) are allowed to trade renewable energy (RE) certificates, which they earn in a “point system” where they get credit in the form a certificate for the RE they are mandated to source for distribution to their customers. DUs that fail to meet the required RE may buy these certificates, which are traded in a market that will be set up.
“It encourages the buildup of more renewable energy plants,” Mr. Fuentebella said.
“The good thing about the policy of Secretary [Alfonso G.] Cusi is, it should not affect the average price that the consumers are paying,” he said.
He said the rules will include measures that will set a price ceiling for each competitive selection process (CSP), the mechanism that requires distribution utilities to subject each power supply agreement to price challengers.
He said 2018 is “year zero” for the RPS rules and the preparatory phase for the DUs to set their demand targets.
“2019 — that’s year one, when they can start to bank RE certificates,” he said.
The DoE issued the circular on Dec. 22, 2017, promulgating the rules and guidelines governing the establishment of the RPS for on-grid areas.
The circular requires industry participants to source or produce a specific portion of their electricity requirements from eligible RE resources in order to develop indigenous and environmentally friendly energy sources.
It also set a minimum annual RPS requirement and the minimum annual incremental RE percentage, which should be no less than 1% of its annual energy demand in the next 10 years unless suspended or modified.
Also included in the circular is a general guideline for the creation and operation of the RE market and its registrar.
The DoE issued the rules as called for under Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001, which mandates the agency to encourage private sector investments in the electricity sector and promote the development of indigenous and renewable energy resources.
RPS is also called for under RA No. 9513 or the Renewable Energy Act of 2008, when RE accounted for 34% of the national power generation mix.
The increase in electricity demand after 2011 and the construction of more fossil fuel plants for the country’s baseload requirements reduced the share of RE in the mix to around 24%, the DoE said in issuing the RPS rules.
Mr. Fuentebella said the DoE would issue shortly separate RPS rules for off-grid areas, which instead of the distribution utilities the mandated entities would be generation companies, which are usually the lone power supplier in the remote areas not connected to the national transmission system. — Victor V. Saulon
