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.

Greenpeace, WWF cheer FIT rates

Greenpeace, WWF cheer FIT rates

By: Amy R. Remo

Philippine Daily Inquirer

MANILA, Philippines—Environment group Greenpeace and leading renewable energy advocate World Wide Fund for Nature (WWF-Philippines) have hailed the issuance of the feed-in-tariff (FIT) rates that are seen paving the way for increased use of renewable energy in the country.

In a statement, Greenpeace said that with the FIT rates now in place, there was “no reason to proceed with more coal power projects. Other neighboring countries like Thailand and Malaysia, where FIT rates have been approved, are seeing an increase in development and mainstreaming of RE.”

These FIT rates, which were issued by the Energy Regulatory Commission last week, are critical in ensuring the viability of an RE project as these will ensure fixed cash flows over the next 20 years.

WWF-Philippines Climate Change Programme director Gia Ibay, meanwhile, stressed that the Philippines was a fossil fuel-poor country and thus, investing in RE will help shield Filipinos from the “volatility of the fossil fuel market while taking advantage of what we have been endowed with.”

A study by WWF showed that the country can develop an additional 1,200 megawatts of geothermal capacity; 2,308 MW of hydropower; 235 MW of biomass and 7,404 MW of wind power capacities in the next 10 years.

WWF also said that the estimated increase in power rates that will be borne by end power consumers with the issuance of FIT rates was “marginal” compared to the expected increase in the cost of traditional fossil fuels like coal over the long term.

Based on WWF’s figures, the estimated impact of FIT on power rates would only be 5 centavos per kilowatt-hour, as against the electricity hikes of 69.04 centavos per kWh in Luzon, 60.60 centavos per kWh in the Visayas, and 4.42 centavos per kWh in Mindanao just a few months ago—a “vicious trend which is bound to get worse if fossil fuels such as coal succeed in dominating our power sector.”

“Philippine electricity rates continue to increase almost on a quarterly basis and at much larger amounts too than the FIT [rates]. 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,” added WWF-International Asia Pacific energy policy manager Rafael Senga.

From Rappler: Investors rethink renewable energy projects due to low tariffs

Investors rethink renewable energy projects due to low tariffs

BY RAPPLER.COM

MANILA, Philippines - Renewable energy developers are reviewing the viability of their projects after the Energy Regulatory Commission (ERC) approved lower-than-expected feed-in tariff (FIT) rates.

While they are thankful to the ERC for finally approving the rates, they said these may not be enough to cover the high costs required to roll out their projects.

"We are very thankful to ERC for finally releasing the FIT. [But the rates are] significantly lower than what the industry applied for," said Tetchie Capellan, founder of the Philippine Solar Power Alliance (PSPA).

Capellan said they will see in the coming year whether the rates will be enough to attract investments.

JJ Samuel Soriano, president of US-based solar energy firm Sunconnex, said: "We have to study what were the considerations of the ERC in coming up with the FIT for solar then we can assess if it will still be financially feasible to construct and operate."

Gabino Ramon Mejia, PhilNewEnergy Inc project director, said the lower solar FIT will be very challenging especially to the small players. PhilNewEnergy is a joint venture between Ayala Corp and Mitsubishi Corp that is pursuing the construction of the P7-billion Darong solar power project in Davao del Sur.

"But if Department of Energy (DOE) will allow a higher capacity allocation, who knows it may still work," Mejia said.

The ERC approved on Friday, July 27, the FITs for solar, wind, biomass and hydropower projects. It however postponed the fixing of FIT for ocean thermal energy conversion pending further study.

In calculating the FITs, the ERC accepted the methodology used by National Renewable Energy Board (NREB) that takes into account, among others, the cost of constructing and operating the plants for each renewable energy, the generation output or capacity factors of these plants, and the reasonable return on investment to be granted the developers of the plants.

Hike, then reduce, power prices

The imposition of the tariffs is expected to further increase the already high power prices in the Philippines before reducing them in the long term.

This is because the tariff system offers a guaranteed price at which renewable energy will be sold, and the costs will be passed on to consumers.

Renewable energy is more expensive than traditional sources like coal and oil.

However, the industry expects renewable energy to be cheaper over time for one reason: FITs are set, while coal and oil prices fluctuate and continue to go up.

"We express our appreciation for the ERC in keeping with mandate of the Electric Power Industry Reform Act by deliberating and issuing the FIT rates at the soonest possible time," Department of Energy (DOE) Secretary Jose Rene Almendras said.

Almendras said they hope that all stakeholders will continue to contribute in efforts to set up a competitive and dynamic power market that will benefit the whole country.

Approved rates

The ERC approved the following renewable energy tariff rates:

• P9.68 per kilowatt-hour for solar,
• P8.53 per kWh for wind,
• P6.63 per kWh for biomass, and
• P5.90 per kWh for run-of-river hydro.

The rates are lower than what the NREB had proposed. The NREB's proposed rates were:

• P17.95 per kWh for solar,
• P10.37 per kWh for wind,
• P7 per kWh for biomass, and
• P6.15 for run-of-river hydro.

The ERC explained it arrived at substantially lower rates, particularly for solar and wind, after it took into account the downward trend in the costs of putting up generation plants for these.

It said that for all renewable energy technologies, project costs, such as those for the switchyard and transformers, transmission interconnection and access/service road, were revised in line with the benchmarks of similar projects of the regulated utilities.

The ERC said it also adopted a lower equity internal rate of return of 16.44% in calculating the FITs, except for biomass, which was allowed a higher return of 17% to account for fuel risks.

The approved FITs will be subject to review and adjustment after an initial implementation period of 3 years or when the installation targets for each technology as set by the DOE have already been met.

The DOE approved a 3-year installation target of 250 megawatts for run-of river hydro, with anticipated investments of P891.25 million, 250 MW for biomass (P759.75 million), 50 MW for solar (P170 million), 200 MW for wind (P551.6 million) and 10 MW for ocean (P126.37 million). - Rappler.com

Philippine FIT now approved, FINALLY!

Finally 4 years after the approval of the RA 9513, FIT for RE is now approved.

Next battle ground: NET METERING... net metering will be the most appropriate incentive for small scale level such as house roof tops and small buildings less than 100 kW capacity - EastGreenfields.

Philippines Approves Tariffs On Alternative Energy Sources

The Philippines’ Energy Regulatory Commission approved feed-in tariff rates for hydroelectric, biomass, wind and solar energy sources, lower than what the nation’s renewable energy board asked for.

Run-of-river hydroelectric power sources will enjoy a 5.90 pesos a kilowatt-hour tariff, biomass 6.63 pesos, wind 8.53 pesos and solar 9.68 pesos, the commission known as ERC said in an e-mail. The ERC deferred fixing the tariff for ocean thermal energy conversion resource pending further study, it said.

The lowered tariffs will cushion the impact of the incentive mechanism on electricity rates, while attracting investments in renewable energy, ERC Executive Director Francis Saturnino said in the statement.

The renewable energy board in its May 2011 petition sought a 6.15 a kilowatt-hour tariff for hydroelectric, 7 pesos for biomass, 10.37 pesos for wind and 17.95 pesos for solar energy sources. Under a feed-in tariff, investors are paid a cost-based price to provide a reasonable return.

To contact the reporter on this story: Norman P. Aquino in Manila at naquino1@bloomberg.net

To contact the editor responsible for this story: Clarissa Batino at cbatino@bloomberg.net


Post on FIT click here.

The case for renewable energy

The case for renewable energy

By Tony La Vina | Posted on July 21, 2012 

On this fourth column of a series on energy, I make the case – in general terms – for renewable energy. Later, I will dedicate whole columns on specific RE sources such as geothermal, wind, and solar.

Shifting to a renewable energy-centric strategy for rehabilitating the Philippine electrical infrastructure is a radical option, and it will require significant investment of time, resources, and political will, beginning with the implementation (and monitoring) of the Renewable Energy Act.  It has, however, the potential to transform the power industry, and establish the foundations of clean energy and energy security. That transformation ironically centers on one complaint of RE technology aired by its critics: that they do not yield as much power as traditional fossil fuel, big hydroelectric, or nuclear generation, in absolute numbers and on a per-peso basis.

By their economics and technology the traditional means were suited for large-scale production of electricity, and in particular for baseload generation, to meet the expected, constant demand of consumers connected to a centralized electrical grid (some environmentally-friendly power generation can also serve as baseload power plants, such as geothermal plants, though they have their limitations). In contrast, solar photovoltaic (solar panels) and wind, the two commonly touted RE power options, cannot meet the requirements of baseload generation: small-scale and/or high expense, plus the intermittency of clear skies and wind.

Looking at this from the baseload, large-grid perspective, though, is like missing out the trees for the forest: emphasizing the main point of getting more power into the grid but missing out on the finer details of getting there. Instead of plopping down a few traditional, low cost-high yield-but-high environmental/fuel cost plants to address a geographic shortfall, why not spread it out across smaller RE plants and smaller grids?

RE power opens up the potentials of microgrids, distributed generation, grid energy storage, and grid-tied systems to revolutionize the otherwise traditional and centralized Philippine electrical infrastructure: large geographic grids fed by large-scale plants, transmitted across large distances through multiple substations to serve a large consumer base.

Microgrids we should be familiar with, because of projects combining these with RE to distant rural communities too far to be economically connected to the electrical grid. They are what the name implies: small-scale grids fed by small-scale plants to feed a small consumer base. They are perfect for such small-scale communities because households typically do not have the demand and voltage loads of heavy industry and dense urban areas.

Distributed generation spreads out the production of electricity from centralized sources, usually placing the power plant much closer to its intended consumer base than the traditional, centralized power plant—sometimes even on-site, such as solar panels on the roof of its intended user. Grid energy storage allows the infrastructure to smooth out the peaking nature of electrical demand by storing excess electricity for future use. These technologies also include the emerging use of electrical vehicles to serve as part of the storage medium. Finally, grid ties allow the grid storage system to safely interact with the main electrical grid, allowing the user to feed from the grid when his demand is high—and give his own excess electricity to the grid when his own demand is low.

These tools afford us an opportunity to decentralize the Philippine power industry in a radical fashion: subdividing and complementing the main grid, turning consumers into part-time producers. Industrial parks, places like seaports and airports, and dense urban communities (like the Makati Central Business District) can be served, even partially (e.g., low-voltage office loads in heavy industry) by grid-tied microgrids-cum-storage systems powered by on-site RE, feeding from and to the distribution grid powered by traditional and RE (e.g., large wind farms) power plants. Since these tend to shut down at specific times (e.g., business hours for industry and commercial), they can store energy produced at these times, or sell their production at Feed-in-Tariff (FiT) rates—an attractive incentive for industrial parks, commercial centers, and even household communities to set up their own private RE generators to supplement income.

All this will require heavy research and infrastructure investment, not just in the power plants, but also in the grid—the transmission and distribution sides of the electrical industry. But the truth is our power infrastructure, from plants to power lines, is aging. A change is due and the choice is clear. We can continue to do things the old-fashioned way with a business-as-usual approach that dooms us to the current situation of inadequate and expensive power. Or we can be bolder and take the RE route which give us the chance to permanently alter the bad status quo and guarantee in the long term cheaper, more reliable, and environmentally friendlier energy.

Off Grid PV Generation System

Off Grid PV Generation System

(Double click image for clearer picture)


The system uses the sun to provide electricity to the household local loads.


During day time, electricity can be directly supplied to loads.


When load demand is less than energy generated, excess energy will be stored to the batteries.


During night time, energy will be withdrawn from the batteries to supply electricity to loads.


System size depends on the amount of energy the batteries can hold. More batteries the more energy stored.


Number of panels depends on the number of batteries to charge. 


More batteries means more panels that also means higher investment.


Batteries should be maintained.


The system is most advantage to use in locations without regular electricity coming from the gird.
Also, the system can be use in the cities during black outs after or during tropical depressions or other calamities that disrupts regular power supply.

Click here to learn more.

Grid Connected PV Generation System

Grid Connected PV Generation System

(Double click image for clearer picture)


The system uses the sun to provide electricity to the household local loads.


When there is an excess energy not used by the local loads, these excess energy will be exported to the main utility grid, operation in GENERATION and EXPORT mode (Local demand < PV Generation).


When local demand loads are greater than what the system produce, the system will draw these energy from the grid, operation both IMPORT and GENERATION mode (Local demand > PV Generation).


At night when of course the sun is not present, the system is on 100% IMPORT mode operation.


This system is the most economical set-up since this does not require batteries for energy storage, the grid is your storage. The excess energy exported can be re-imported during night time.


Click here to learn more.