FIT rates to help reverse PH reliance on 'dirty' power

WWF says approval of FIT rates to help reverse PH reliance on 'dirty' power

By: Orti Despuez, InterAksyon.com

The online news portal of TV5

MANILA - World Wildlife Fund-Philippines said the approval of feed-in-tariff rates for renewable energy projects will help reverse the country's growing dependence on highly-polluting power sources.

The non-government organization's statement comes on the heels of the Energy Regulatory Commission's release of FIT rates for hydro (P5.90 per kilowatt-hour), biomass (P6.63), wind (P8.53), and solar (P9.68). The ERC however deferred approval of the tariff for ocean thermal energy conversion pending the results of its study.

The FIT rates represent the guaranteed returns for renewable energy project proponents. The approved rates however are lower than those proposed by the National Renewable Energy Board, the body created by the Renewable Energy Act to oversee the development of the nascent industry.

“The Philippines is a fossil fuel-poor country," lawyer Gia Ibay, Climate Change Programme director of the WWF-Philippines said, adding that the approval of the FIT rates would help shield the country from the volatility of the fossil-fuel market.

With over a third of its power sourced from coal plants, the Philippine power mix - which previously was dominated by renewables - has gradually turned from green to black.

“Fortunately, the country now has a chance to reverse this trend as one of the Philippines' few competitive advantages is its vast renewable energy base,” the lawyer said.

According to a WWF study, the country can develop 1200 megawatts of geothermal, 2308 megawatts of hydro, 235 megawatts of biomass and 7404 megawatts of wind power capacities in the next decade, raising the share of indigenous renewables in the power mix to 50 percent.

WWF said the expected increase in electricity rates because of the FIT amounts to five centavos per kilowatt-hour, which compares favorably to the increase of 69.04 centavos in Luzon, 60.60 centavos in the Visayas, and 4.42 centavos in Mindanao a few months ago brought about by higher fossil-fuel prices.

Rafael Senga, WWF-International Asia Pacific energy policy manager, said Philippine electricity rates continue to increase almost on a quarterly basis even without the FIT.

“We need to ask ourselves what causes this. Is it because of renewable energy or is it because of an over-reliance on a fossil fuel based system? I think we all know the answer to that," Senga said.

He said this trend would continue as the government has anchored its near-term capacity development program on coal-fired power plants.

Electricity from most renewable energy projects are expected to achieve grid parity rates within 10 years, by which time their cost would approximate that of coal-fed plants, the WWF said.

Coal-fired power plants have a minimum life of 30 years, thus locking in the country to this "dirty" energy source, the WWF said. 

"The FIT allows renewable energy projects to become cost competitive today, rather than tomorrow. This will allow us to invest in clean and cheap energy in the long run and prevent the Philippines from being locked-in for 20 extra years to dirty, expensive energy. This is why WWF-Philippines believes that the FIT is an investment, and not a subsidy as some have claimed," Ibay said.