Gov't to limit renewable energy supply to avoid boom-bust
MANILA, Philippines - Setting a policy that prioritizes renewable or clean sources of energy is one thing, but ensuring that the supply and price of these energy sources will not unnecessarily burden consumers in the future is another.
Thus, Energy Undersecretary Jose Layug Jr. told reporters on Wednesday, July 11, that they will ensure renewable energy investors will not overbuild by limiting the "installation targets" per technology -- an industry lingo for the supply from each renewable source, like solar, ocean, wind, biomass and hydropower, that are partly paid through a tariff passed on to consumers.
"Given our installation targets, we anticipate an oversubscription on a per technology basis. Depending on the final feed-in tariff and if we continue to have this oversubscription projects, then we will craft a criteria to determine which project will be initially granted a feed-in tariff," he said at the sidelines of the Platts Forum on Oil, Coal and Liquefied Natural Gas in Manila.
Layug cited the case of Spain, which experienced a boom and bust in solar power, resulting in feed-in tariff that stayed high.
A feed-in tariff refers to a guaranteed rate given to renewable energy developers over a period of time. The cap in installation targets will kick in once the Energy Regulatory Commission (ERC) gives its nod to add the feed-in tariff in Filipino consumers' electricity bill.
Layug said that they will design how they will allocate the limited supply per technology through several means, including a first-come-first-served basis, bidding, or asking the proponents to discuss and propose which one should go first.
Overall, the total installation targets from renewable energy to be developed have been capped at 780 megawatts (MW). Of this, the National Renewable Energy Board (NREB) has allocated the following from these power projects:
- 250 MW from hydro
- 250 MW from biomass
- 220 MW from wind
- 50 MW from solar
- 10 MW from ocean
The NREB recommends the following feed-in tariff for the following:
- solar - P17.95 per kilowatt-hour (kWh)
- ocean - P17.65 / kWh
- wind - P10.37 / kWh
- biomass - P7 / kWh
- hydropower - P6.15 /kWh
Renewable energy sources are typically more expensive to generate than fossil-based sources, like oil and coal, which are already have a supply chain and financial markets behind them. However, the cost of renewable sources are expected to eventually go down as more investors increase supply, and because these are not imported.
11 July 2012