Philippines Introduces New Feed-in Tariff

Peter Castro
July 27, 2012 | 4 Comments

The Energy Regulatory Commission (ERC) in the Philippines today approved the feed-in tariffs (FITs) that apply to renewable energy generation sources such as hydro (run–of–river), biomass, wind and solar. Initially the National Renewable Energy Board (NREB) that petitioned the FIT proposed values that they calculated during the time the petition was made. Below are the figures of the proposed and actual FITs released today:

	Proposed FIT	Approved FIT
Hydro	Php 6.15	Php 5.90
Biomass	Php 7.00	Php 6.63
Wind	Php 10.37	Php 8.53
Solar	Php 17.95	Php 9.68

In a press statement from ERC’s website:

The ERC arrived at FITs substantially lower than NREB's proposed FITs for Wind and Solar after it updated the construction costs of the representative plants for these technologies to reflect the downward market trend of the costs of putting up these plants. It also adopted higher capacity factors for these plants to ensure that only the more efficient plants will enjoy the FIT incentive….

Section 7 of the Renewable Energy Act of 2008 mandates, among others, the setting of the FITs to apply to wind, solar, run-of-river hydro, biomass, and ocean RE resources. Under the FIT system, the eligible RE developers will be paid the FITs applicable to them for the energy they feed into the grid. The FITs are subject to degression to encourage the developers to invest at the initial stage and hasten deployment of renewable energy and also to avoid substantial windfall from being enjoyed by developers especially in the technologies where significant cost reductions are expected in the future.

The approved FITs shall also be subject to review and readjustment by the ERC after the initial FIT implementation of 3 years or when the installation targets for each technology as set by the Department of Energy shall 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.

Developers are now expected to jump into action and fight for a piece of the 760-MW target capacity. Below are the caps broken down by technology:

Hydro	250 MW
Biomass	250 MW
Wind	200 MW
Solar	50 MW
Ocean	10 MW

Lead image: Fort Santiago building stamp via Shutterstock

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4 Comments

Charanthej B
March 1, 2013

Does any one know what was the wind installed capacity in 2012 ? And what are the wind farms that contributed in that installation ?

Rudi Richter
August 8, 2012

agree, the base is good, but if they have finally after 4 years a number for the FIT, why not giving the people a complete picture about who will benefit from it (instead of "It also adopted higher capacity factors for these plants to ensure that only the more efficient plants will enjoy the FIT incentive….), how long will i be paid for the ones entering at this time (planning of financing) and the terms of payment.

There are always not necessary open questions and with statements on a investors formum, that people lost millions due to a delay with a ready to work hydro power plant only because of one piece of paper not issued from ERC. This is why not much happens here, dream on DOE homepage "100% renewable energy by 2013" and the the naked reality, not much happend.

Geoff Thomas
August 8, 2012

It seems to me to be a very sound FIT, in that by reducing as the cost of panels etc goes down, the resentment of people "ripping us off" as they see it when someone is getting the better of the Govt. is eliminated.
In Queensland Australia, the FIT was fixed at the time you entered, for app. 18 years, so you could plan to pay off the debt, now it has dropped enormously, but only for new entrants, - I guess it depends on the fine print, and often bureaucrats don't seem to understand these things, the NSW premier tried to re-nig on what was basically a legal contract, which he lost.
What I really like with this FIT is that it includes many renewable energy sources, not just Solar, so encourages all sorts of development.

Rudi Richter
August 7, 2012

Another step sidewards?
Are this guidelines for FIT "higher capacity factors" already published? How is the regulation and assurance for the payments coming from FIT, so that investors can be enabled to see that their debt payments can be covered.

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Peter Castro

Peter is currently the program Director for Renewable Energy Technology Center. The 1st training and workforce development company in the Philippines for Renewable Energy. He is also the 1st Asian to obtain education in renewable energy...