MANILA, Philippines - Investors in renewable energy (RE) are so disappointed that the Philippines is still unable to come up with a solid policy in the feed-in-tariff (FIT) despite the RE Law, the International Finance Corp. (IFC) said.
IFC resident representative Jesse Ang said that investors will leave if the Philippines will not be able to get its act together in terms of RE policies.
Ang said investors have been waiting for the FIT since June last year. “People are excited before but now they are asking are we gonna do it or is this gonna be like the EPIRA law.”
“You made so much hype so finish it,” Ang advised the government. He said the Energy Regulatory Commission (ERC) should finally make a decision on the amount of subsidy. Ang said that RE is an expensive form of energy but said in the future a portion of energy will always come from RE.
He conceded, however, that the carbon footprint of the Philippines is very small.
The FIT is a subsidy given to RE developers. Ang said the proposal of the National Renewable Energy Board (NREB) is already acceptable to them. The proposal is for a 20-year contract which has a provision for forex and inflation adjustment. Other countries like Thailand are not as generous because they have no inflation and forex adjustment.
For Shell Pilipinas president Ed Chua, RE is an industry where the Philippines can excel. The Philippines is already the second largest producer of geothermal energy after the United States. “Hedging is not a bad idea but it is a delicate balancing act,” he said of the FIT.
In a separate interview, Trade Secretary Gregory L. Domingo said that investments in renewable energy does not need government subsidy because these investments are already viable. “I don’t know why we have to subsidize it,” Domingo said.
Earlier, DTI already said they are against the FIT in RE because it will make power costs more expensive. He said he is against the FIT because the tradeoff is higher gas prices for millions of Filipinos.
Domingo said that only a few will benefit from the FIT because the industry is only able to produce 5% of the total market requirement. Domingo questioned the logic behind protecting producers that only have a small capacity and is unable to meet the requirements of the consumers.
“It is hard to give protection to an industry that meets only 5% of the requirement,” Domingo told reporters. “The trade off will be an increase price of gas for millions.