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Philippines Joins Feed-in Tariff Energy Trend

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, biomass, wind and solar. Below are the figures of the proposed and actual Fits released in July:

Sector 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 digression 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.

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