The recommendation
of the Department of Energy (DOE) to increase solar installation to 500
megawatts will have an ‘escalating effect’ to as much as P0.112 per kilowatt
hour (kwh) on the Feed-in-Tariff Allowance (FIT-All) that will be reflected in
the consumers’ electric bills.
Based on
estimates provided by the National Renewable Energy Board (NREB), the
additional 450 megawatts in solar installations as targeted next year will be
P0.0509 per kwh. The original solar target development had been at 50MW and to
be underpinned by FIT of P9.68 per kwh.
Effectively,
the higher solar installations will jack up the pass-on FIT-All rate to P0.112
per kwh, compared to the original calculation of P0.0618 per kWh had the
original installation targets per technology been adhered to.
NREB said
its calculation had been anchored on 2011 power rates and considered renewable
technology installations of up to 1,200 megawatts. Applying such as reference,
the maximum consumers’ out-of-pocket FIT subsidy had been estimated reaching
P7.209 billion annually.
NREB
Chairman Pete H. Maniego Jr. qualified that “the maximum FIT differential is
computed (for 2016 as reference year) when all the 750 megawatts installation
targets are already supplying power to the grid.”
He noted
that starting this 2014, FIT pass-on may already start but only a fraction of
the anticipated RE installations yet will be in operation.
“To date,
only a few biomass and run-of-river hydropower plants are operational. For
wind, the installations are expected to be completed by the last quarter of
2014 or the first quarter of 2015. For solar, only 13MW had so far been
connected to the grid,” Maniego stressed.
The
renewable energy body qualified though that “the FIT support or the
FIT-Allowance is expected to decline with the increases in WESM (Wholesale
Electricity Spot Market) rates and electricity supply over the 20-year period.”
NREB noted
that “grid parity is projected in less than 10 years, after which RE sources
are expected to reduce rather than increase the electricity rates.”
The proposal
to increase solar installation was initiated by the DOE and had gotten the
support of NREB for required filing with the Energy Regulatory Commission.
NREB further
specified that “considering the low percentage of ongoing biomass and
run-of-river hydropower projects to-date, it is possible that not all of the
installation targets for these technologies will be met even by 2016.”
The growth
rate of RE installations had been projected at 1.5-percent annually, and this
has been factored in into the DOE-crafted National Renewable Energy Program.
http://www.mb.com.ph/500-mw-solar-installation-seen-lifting-fit-all-rate-to-p0-112kwh/
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