DOE mulls extension of FIT allocation for hydro

MANILA, Philippines — The Department of Energy (DOE) is looking to extend anew the deadline for the feed-in-tariff (FIT) allocation for run-of-river hydro due to slow take up for the technology.

The agency is currently working on the extension of the FIT for run-of-river hydro as it aims to improve the country’s energy equity and security, DOE Secretary Alfonso Cusi said.

“The Philippines is number one in environmental sustainability, but we are very poor in equity and security. That’s what we are working on,” he said.

FIT for hydropower and biomass developers were extended until Dec. 31 from the original deadline on Dec. 31, 2017.

Unlike solar and wind, the FIT allocation for biomass and run-of-river technologies remain undersubscribed three years after the program’s implementation.

As of end-2016, 28.6976 megawatts (MW) were taken up by existing run-of-river hydro projects, while 144.80 MW were consumed by completed biomass plants, DOE-Renewable Energy Management Bureau (REMB) data showed.

Originally, run-of-river hydro was approved a rate of P5.90 per kilowatt-hour (kwh) and biomass with a rate of P6.63 per kwh. Each technology was allotted an installation target of 250 MW each.

The FIT rates have already been lowered to P5.8705 per kwh for run-of-river hydro and to P6.5969 per kwh for biomass effective 2018.

But despite the extended FIT deadline, Cusi said only biomass has reached its quota, while run-of-river hydro has not yet reached its full allocation.

“It’s still low, less than a hundred MW,” he said. “That’s why I’m going to extend it to fill up until it is fully taken up.”

Moreover, hydropower developers are requesting for another extension of the FIT for the technology which are now being evaluated by the agency, DOE-REMB director Mylene Capongcol said.

Previously, the Philhydro Association Inc., composed of hydropower developers, manufacturers, construction companies and consultants, asked the DOE to clarify the FIT for run-of-river hydropower since its installation target “has not been fully subscribed due to factors beyond the developers’ control.”

The top hurdle for run-of-river developments is securing clearance from the National Commission on Indigenous Peoples because of the long process to get their consent for water permit.

Power developers have also stressed that run-of-river hydro projects are long gestation developments that will cover the period to secure permits and undertake studies, and therefore need more time for completion to avail of FIT incentives.

A provision under the Renewable Energy Act of 2008, the FIT system details perks for power developers for a period of 20 years to invest in the more expensive renewable sector.