Another wind project to hike power rates
The third wind power project that will be endorsed by the Department of Energy (DOE) for the availment of feed-in-tariff (FIT) may come up as an “ugly winner” for the electricity consumers because it will be a factor that could further drive up electricity rates.
Energy Secretary Carlos Jericho L. Petilla admitted that the third wind project could push up the FIT Allowance (FIT-All) charge because the plan is to take in the whole capacity of the plant even if the leeway for wind installation based on prescribed cap now is just lean.
To date, the energy department already endorsed 169-megawatt of wind capacity for FIT availment, and if hinged on the 200MW cap, it now just has a room for 31MW. The first qualifiers are the 150-MW wind power facility of Energy Development Corporation and the 19-MW Northwind expansion of the Ayala group.
However, the projects being re-vali- dated are of 81MW and 54MW capacities, inferring clearly that the availment could go beyond 200MW.
Petilla hinted that the next FIT qualifier will likely be a plant of bigger capacity – so if the 81MW project will be factored in, the installation for wind could spillover by 50MW and that could be an unforeseen increase in the consumers’ electric bills.
“For taking the risk, we would have to take them (their capacity) as a whole,” Petilla said, while indicating that this will definitely entail upward adjustment in the FIT-All rate.
The FIT, being a sure source of cash stream for developers for the next 20 years, had technically rendered the renewable energy projects gaining legs because they became the subject of fierce competition even for the energy sector’s “big boys club.”
The plan of the DOE is to pursue the FIT adjustment in the next round of filing or for calendar year 2016, although this is a matter that has yet to be resolved by the Energy Regulatory Commission (ERC) because this implies prospective change of rules at mid-stream.
Aside from higher cost impacts, the energy department may also need to explain why a ‘leaked email’ of an official of one of its units just apprised some – and not all developers - as to the step-by-step process of FIT availment and that was done in October way before any plant had reached nomination or endorsement phase for the subsidy.
The tough contest is not only on the wind sphere of technology developments, but it also goes the same with the solar sector wherein only two projects may qualify for FIT settlements. Petilla said the solar installation cap of 50MW cap may already be breached, and such will also be included in the portended adjustment in FIT-All application. (MMV)