Jan. hearings for FiT rates of biomass, river hydro

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THE Energy Regulatory Commission (ERC) has moved to January next year the hearing for the proposed new rates scheme for run-of-river hydro-electric and biomass projects as sought by the National Renewable Energy Board (NREB).

Under the proposed extension, the board sought a rate of P5.8705 per kilowatt-hour (kWh) for small hydro projects and P6.5969 per kWh for biomass projects. The hearing and public consultation for the extended FiT scheme was previously set last month.

In its order, the ERC directed NREB to “put in plain words and explain, for the benefit of the consumers and other concerned parties, what the proposal is all about and the reasons and justifications being cited in support thereof.”

The ERC scheduled the hearing on Jan. 11, but told interested parties to submit their comments on the proposed rule-making on or before Jan. 7 both in soft and hard copies to the commission’s docket section. Public consultations have also been scheduled in Cebu City on Jan. 17, and in Davao City on Jan. 18.

The proposed rates are the degressed values from the July 27, 2012 feed-in tariff rates issued by the ERC, which set run-of-river hydropower at P5.90 per kWh and biomass at P6.63 per kWh. The implementation of the FiT system started on Jan. 1, 2015 and was to remain in effect for two years, or until December 2017.

The FiT scheme was meant to encourage investment in renewable energy by granting the preferential rates until the capacity installation target of 250 megawatts (MW) set by the Department of Energy (DoE) have been fully subscribed.

The rates, which are subject to degression as may be approved by the ERC, had been reduced to P5.8705 per kWh for run-of-river hydro and P6.5969 for biomass for projects that reached their commercial operate date within January to December 2017.

On Feb. 23, 2018, the DoE informed the ERC of its resolution extending the FiT for biomass and small hydro for another two years, or until Dec. 31, 2019, or upon successful commissioning of projects covering the remaining balance of their respective installation targets, whichever comes first.

Based on the letter from the DoE, the total capacities of both biomass and small hydro plants built and commissioned or to be commissioned within 2017 have neither exceeded nor reached the 250-MW installation targets. Small hydro had a balance of 215.40 MW while biomass had 111.39 MW remaining.

The DoE recommended that the FiT rate to be granted should be the rate at the time of the successful commissioning of the projects. The ERC initiated its own review and re-adjustment of the FiT rules as prompted by the missed installation targets.

On March 26, the ERC directed NREB to submit its proposal or recommendation on the review of existing feed-in tariff. On Aug. 22, the board endorsed the submissions of Philhydro Associations, Inc. and Biomass Renewable Energy Alliance on the rates, which are the ERC-approved rates of P5.8705 per kWh for small hydro and P6.5969 per kWh for biomass. — Victor V. Saulon