Hydropower developers seek higher tariff for run-of-river

HYDROPOWER developers are seeking a higher, more “reasonable” tariff for run-of-river (RoR) hydropower projects to attract further investment, an industry official said.

On the sidelines of the Third Philippine Hydro Summit on Tuesday, Gertrude V. Roque, president of PhilHydro Association, Inc., said that increasing the tariff would attract more developers.

“The reality is that we’re not just producing water or power, but we are also taking care of the watershed and the infrastructure that we contribute to the countryside,” Ms. Roque said.

Hydropower facilities generate electricity from the natural flow of moving water. The types of such projects active in the Philippines are impounding hydro, run-of-river hydro, and pumped storage hydro, which qualify for subsidized rates under the government’s feed-in tariff (FIT) program.

Launched in 2011, FIT offers fixed payments per kilowatt hour to developers. This is also a uniform charge billed to all on-grid electricity consumers to support the development and promotion of renewable energy.

Since the installation target for RoR under FIT is about to be fully subscribed, the Department of Energy (DoE) has set a new target of 100 megawatts (MW) this year.

During the previous FIT rounds, the rate for RoR ranged from P5.90 per kilowatt-hour (kWh) to P6.0804 per kWh, depending on the scheduled completion date of each project.

Once the quota is taken up fully, RoR will adopt the incentive structure of the green energy auction, another program to encourage renewable energy development.

PhilHydro proposed the use of “actual average capacity factor” as the basis for setting the tariff. This sets the rate based on how much electricity a power plant actually generates over a period of time, compared to how much it could generate if it ran at full power continuously.

“Actual and historical capacity factors of operational plants best represent the true conditions and challenges of operating RoR hydro,” the group said in a position paper.

PhilHydro is also asking for run-of-river hydro to be shielded from contingency costs, citing “constant exposure to weather, climate change and natural disasters.”

As of October, the government has awarded 404 hydropower project service contracts with a potential capacity of more than 14,000 MW.

According to a speech by Energy Secretary Sharon S. Garin delivered by Ruby B. de Guzman, director of the Renewable Energy Management Bureau, hydropower’s role in the system is to provide firming capacity and deliver power reserves crucial to keep the grid stable.

“Hydropower is more than just a part of our energy mix — it is a National Imperative that underpins a successful energy transition and is crucial to achieving our renewable energy targets of 35% by 2030 and 50% by 2040,” Ms. Garin said.

The DoE is partnering with foreign partners and technical experts to map potential large-scale hydropower sites across the Philippines, supporting the goal of boosting hydro capacity, she said.

“The energy transition is not a distant goal — it is the reality we are living today. And for the Philippines, water is not just life; it is power, resilience, and opportunity,” she added. — Sheldeen Joy Talavera