Philippines: Alternative funding source for FiT not yet available -- Energy dep't

Philippines: Alternative funding source for FiT not yet available -- Energy
dep't

THE Department of Energy (DoE) has not yet found the funds to replace the
feed-in-tariff (FiT) allowance being collected from electricity consumers to
repay investors in renewable energy projects.

"There is none yet," Energy Undersecretary Felix William B. Fuentebella said
when asked whether the department had found a possible funding source.

"We're still looking and negotiating for funding," he said.

He said there would be no third round of FiT, a guaranteed payment for 20
years for the electricity produced by renewable energy developers, until the
DoE has found an alternative funding source other than billing customers
through a "FiT allowance."

"We will not put a deadline," he said when asked about the timeline for the
DoE's attempt to free consumers of the so-called FiT-all, which is included
in their monthly electricity bill.

Late last year, the Confederation of Solar Power Developers of the
Philippines (CSPD) pleaded for a resolution of around 300 megawatts (MW) of
capacity that failed to make it to the second round of FiT under a 500-MW
installation target.

CSDP President Reynaldo T. Casas said he was pleased to see that some of the
regulatory bodies had started responding to the confederation's call. He
added that the DoE had formed a independent committee to look into the
issue.

"What happened was that those 27 proponents who were excluded in the March
15 deadline were distinguished from the 42 that were included," said Mr.
Casas, who is also president of nv vogt Philippines.

The DoE set an installation target of 500 MW with a rate of P8.69 per
kilowatt-hour (kWh) in April 2014, the goal that was significantly higher
than the 50 MW set in July 2011 with a rate of P9.68 per kWh. The new rate
is applicable until the target is reached but only for projects that
qualified by March 15, 2016. The incentive scheme is authorized under
Republic Act 9513 or the Renewable Energy Law of 2008.

Mr. Casas said that after his group's meeting with the DoE panel, all
proponents -- not just the disqualified 27 -- were required to fill in a
matrix or a list of items to show proof that they have complied with what
were required to meet the deadline.

"That's one of the outcomes of our dialogue," he said "So there's an equal
playing field."

"In January, we expect final resolution of this. Some of us have met the
deadline, some of our projects did not," Mr. Casas said.

The targets and deadlines, which were set under the previous DoE leadership,
have left current officials with the problem of resolving an issue that it
had inherited.

The National Renewable Energy Board (NREB) earlier backed the DoE in its
stand not to give out guaranteed rates to renewable power developers,
although as of December its board has yet to meet and come up with a formal
stand on the issue.

Late last month, NREB Chairman Jose M. Layug, Jr. said he was still waiting
for the private sector appointees to the board, which he had endorsed to DoE
Secretary Alfonso G. Cusi for him to endorse to President Rodrigo R.
Duterte.

Apart from Mr. Layug, the NREB board is comprised of seven members from the
private sector and seven from the government, who are already in place.

"It's too premature for me to make any statement as to what the position of
NREB will be. But certainly you've heard the [DoE] secretary declare that
there will be no third FiT," he said.

The FiT allowance is derived based on factors that include working capital
of National Transmission Corp. (TransCo), which manages the collected
charges, and a "FiT differential" or the difference between the guaranteed
rate paid to developers and the actual prices at the wholesale electricity
spot market.

Last year's, 12.4-centavo FiT allowance is nearly three times the
4.06-centavo per kWh approved for 2015. For 2017, TransCo has applied for a
rate of almost 23 centavos per kWh.

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Link to Original Article:
http://www.bworldonline.com/content.php?section=Economy&title=alternative-fu
nding-source-for-fit-not-yet-available----energy-dep&8217t&id=138663

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com