MANILA -- The Energy Regulatory Commission (ERC) has finally approved the Feed in Tariff (FIT) Disbursement and Collections Guidelines, which will pave the way for an additional 320 megawatts of much needed generation capacity in the national grid.
Investors have long been waiting for these guidelines, since these are expected to encourage and support the building of more renewable energy plants that will be run by solar, wind, biomass and run of river hydroelectric power.
When completed, these power plants will then provide the much needed capacity that will help stabilize power prices in the Wholesale Electricity Supply Market (WESM).
Based on a study by the University of Melbourne of actual 2012 WESM prices in the Philippines, the additional generation capacity generated savings of up to P950 million for consumers.
The FIT policy of the Department of Energy has also attracted over $800 million in direct investments and aided rural economies by creating over 3,500 construction jobs across the Philippines.
The FIT is a structured rate that will be charged by renewable energy (RE) investors in order to guarantee their returns over a 15-year period.
The FIT rates will then be blended together to come up with a so-called FIT allowance, which will then be passed on to consumers. This FIT allowance is estimated to be much lower than the FIT rate.
The FIT allowance is expected to be steady in the next years, while conventional fossil fuels are expected to continuously go up.
“The RE industry congratulates both the ERC and the DOE for their continued efforts to bring much needed clean generating capacity to the Grid. Additional RE capacity not only stabilizes power rates but will also provide jobs in mostly rural areas. It will also contribute to a cleaner and healthier environment for all,” said Atty. Pete Maniego, chairman of the National Renewable Energy Board, the body directed by law to draw up a renewable energy plan.