Renewables board studying changes in power contracting rules

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THE National Renewable Energy Board (NREB) is considering adjusting the minimum level of electricity contracted from renewable energy developers to improve the Philippines’ chances of hitting a target of 35% of power from renewables over the next decade.

In a webinar hosted by the Philippine Energy Independence Council, AC Energy, Inc. President and Chief Executive Officer Eric T. Francia said the Philippines might not meet its clean energy share target with the current Renewable Portfolio Standard (RPS)-mandated threshold annual incremental percentage of at least 1% renewable energy in the electricity sold by distribution utilities and retail electricity suppliers.

“If we want RE (renewable energy) to grow to 35% by 2030, then that annual increment should be increased to 2.5% by 2025,” Mr. Francia said.

NREB Chairperson Monalisa C. Dimalanta told BusinessWorld that a team tasked to monitor the implementation of the RPS is discussing such a move.

“We need to adjust the 1% minimum percentage increase in order for us to hit the target RE share. We are already discussing this in the RPS Composite Team,” she said.

If renewable energy developers can build 2,700 megawatts of capacity over the next three years, Mr. Francia said, the proposed 2.5% yearly threshold requirement will encourage the creation of more projects, leading further to the desired share of renewables in the energy mix by 2030.

“I think it’s incumbent on the developers to demonstrate that we have what it takes to build the first 2.7 gigawatts of capacity. And once we’re able to demonstrate that then, I think the DoE (Department of Energy) and NREB may ought to reconsider increasing that annual increment from 1% to 2.5% to encourage more renewables to be built and for us to reach the 35% output target from renewables by 2030,” he said.

However, Ms. Dimalanta said the board wants to keep the current minimum in the first or second year of the RPS implementation so “we can focus on compliance and providing room for stakeholders to get familiar with the system, particularly the RE Market where the RE Certificates are lodged and monitored to determine compliance with RPS requirements.”

Both RPS rules for on-grid and off-grid areas are in effect this year. These require the entire power industry to source a portion of their energy requirements from renewable sources.

As of the end of March, there are 127 eligible renewable energy power plants with a total capacity of 2,221.15 MW from where power distributors can source clean power.

Meanwhile, Ms. Dimalanta said the board is trying to keep power rates steady and unaffected by the RPS.

She added that the upcoming green energy auction program is “key” to helping power utilities comply with the requirements set by the renewables contracting rules.

“If we are able to implement the auction system in facilitating mandated participants, such as DUs (distribution utilities) and ECs (electric cooperatives), in contracting for RE to meet their RPS requirements, we are confident that we can demonstrate that RE, along with [other] technologies, is cost-competitive,” Ms. Dimalanta said. — Adam J. Ang