MANILA, Philippines — Trade and Industry Secretary Gregory L. Domingo has made his position clear – he is opposed to the granting of subsidies to RE (renewable energy) projects via the FIT (feed-in-tariff) saying studies have showed that RE are viable projects even without subsidy.

Domingo said this when asked by reporters on the businessmen’s concern on RE subsidy during last Wednesday’s Economic Cabinet cluster meeting wherein various chambers of commerce including the Philippine Chamber of Commerce and Industry, Joint Foreign Chambers and the Federation of Filipino Chinese Chamber of Commerce and Industry Inc. were in attendance.

He said that the meeting, various chambers have submitted their position papers, wherein the list of concerns had been reduced to 400 from a thousand recommendations. Top three on their list were power, judiciary and local government units, he said.

"We met with the different chambers and that (RE subsidy) was a significant concern. They mentioned that it might lead to increase in pricing," he said. He vowed to relay the businessmen’s concern to the Energy Regulatory Board, which is now deliberating on the FIT rate.

FIT is the cost consumers have to pay extra for the use of green energy. It is literally a subsidy to RE projects.

Domingo, himself, believes, “There is no need to subsidize RE projects.”

He said that studies have shown that RE projects are viable without subsidies.

“Wind power for instance is viable at 5 centavos per kilowatt hour as FIT so why make the rates 20 centavos,” he said.

PCCI president Francis Chua, who at the Economic Cabinet Cluster meeting, also noted that the gap between RE and fossil fuel on the consumers’ electric bill would amount to 20 centavos per kilowatthour because for every 20 megawatt RE plant, the project proponent has to put up a one megawatt fossil fuel-fed power plant as back up power.

“By granting subsidies to RE projects, we are making viable projects unviable,” he said.

Already, the Board of Investments, which is chaired by Domingo, is planning not to grant tax incentives to RE projects with the FIT saying the FIT already serves as a government guarantee to ensure the viability or a good return on investments.

The Philippines has a higher RE mix than most countries because of its huge geothermal power plant capacity. So far, the Lopez-owned First Gen Corp. is the country’s largest RE producer.

The main contention though is that if the FIT is very high then consumers may not be able to afford it.

Investors in RE are closely watching the FIT in the country because that would determine if it is worth investing considering the high cost of RE development. If the FIT is too high it would burden the consumers while a very low FIT would not be able to attract investors in RE developments.

RE proponents argued that the cost of conventional energy is a lot lower than the RE because it did not include the cost to environmental damage. RE sources mean clean energy and clean environment.

On the other concerns of the business community, Domingo said there are certain things that are beyond the executive branch of government like the issue on judiciary.

On the LGUs, Domingo said, the DTI is working on streamlining the BPLS (Business Permit and Licensing System) to make private transactions with government easier and faster, thereby reducing the cost of doing business in the country.

The BPLS is a partnership with the Department of Interior and Local Government to cut bureaucratic red tape.