In other countries, feed-in-tariffs (FIT) for renewable energy are so high that they triggered price shocks on consumers.

This is a scenario then that is being carefully studied with the plan to impose the same policy in the Philippines to enhance RE portfolio in the country’s energy mix. Hence, policymakers are cautioned to carefully balance the rule-making parameters, so the premium will not end up creating gaping hole in the pockets of Filipino electricity end-users.

Although the comparison may not necessarily be completely aligned with the Philippine market, it was shown that in some European countries, feed in tariffs are ranging from P27 to P30 per kilowatt hour (kWh) equivalent. When that happens in the country, it will be a revolution of sort for the domestic electricity ratepayers.

National Renewable Energy Board (NREB) chairman Arthur N. Aguilar assured that there is a way to calibrate the FIT so it will not appear expensive for the consumers. The proposal under the NREB-drafted policy is to pass on the FIT to all electricity consumers and this will be labeled as “renewable energy charge” and will be an input in the electricity bills as a separate line item, similar to universal charge.

“That (FIT charge) is being carefully studied. The NREB is talking to each and every stakeholder because we have to be dealing with different technologies,” Aguilar noted.

In weighing the policy options, he stressed that intermittency of some technologies are being factored in. “We are studying and looking at all the availability factors for each technology and cost configurations,” Aguilar added.

The NREB proposal on FIT has already been lodged for framework formulation by the Energy Regulatory Commission. The latter subsequently sent notice to stakeholders on comments and inputs to the proposed policy.

It was emphasized further that the FIT application shall be “technology specific” and must be anchored on the application of the NREB.  The technologies to be covered by FIT would include wind, solar, ocean, run-of-river hydropower and biomass power sources.

The ERC is the governing body which shall institute the FIT, a policy stipulation clearly laid out under Republic Act 9513 or the Renewable Energy Law.

The ERC shared the view that “the FIT system is one of the mechanisms that …will mobilize the deployment of energy from renewable sources in the Philippines.”

Proposals laid down under the ERC draft Rules set forth that “all electricity consumers shall share in the cost of the FITs through a one-part surcharge in (PhP/kWh) to be referred to as REC.”

The charge shall be established and set by the ERC on an annual basis upon petition by the NGCP (National Grid Corporation of the Philippines), the entity tasked with the settlement of the FITs of the qualified RE producers.

In other countries, FIT is also referred to as ‘clean energy cash back scheme” or an incentive that offers guaranteed payments per kilowatt hour (kWh) to renewable energy developers for the electricity they produce.

Instead of a premium, the draft ERC rules propounded that the FIT shall be a charge that shall be passed on to all ratepayers.