Philippine Energy Regulatory Commission (ERC), announced the approval of the initial FiT (Feed-in Tarrifs) that applies to all generated energy from renewable energy sources (RES) particularly Hydro, Biomass, Wind, and Solar. ERC however, didn’t fix the FiT or OTEC (Ocean Thermal Energy Conversion) Resources for further research and study.
The decision was made March of this year after long series of hearings started on May of 2011 regarding the proposed FiT by the NREB (National Renewable Energy Board).
Bangui, Ilocos Norte, Philippines
For all the RE technologies, the ERC revised other project costs such as those for the switchyard and transformers, transmission interconnection cost and access/service road cost using the same benchmarks it had employed in approving similar projects of the regulated utilities. The ERC also adopted a lower equity Internal Rate of Return (EIRR) of 16.44°/o in calculating for the FITs, except for Biomass, which was allowed a higher EIRR of 17% to account for fuel risks.
The approved initial FiT however is still subject for review for possible readjustments by ERC within three years from the implementation or when the target set by ERC have already been met.
The ERCs lowered FITs will definitely cushion the impact of implementing the FIT incentive mechanism under the RE Act on the electricity rates, while still being sufficient enough to attract new investments in renewable energy. This is win-win for all,” ERC Executive Director Francis Saturnino Juan said.
image source: Maggy Buenaventura