By MYRNA M. VELASCO
August 15, 2011, 12:38am
MANILA, Philippines — Department of Energy (DoE) Secretary Rene D. Almendras has announced they are going to bid out the 760 megawatt initial renewable energy (RE) installation targets, foiling assumptions by developers that they have been accommodated.
The policy was clearly laid down by Almendras when he said that no one was “in” yet and that the process of project selection shall be done through a bidding.
Industry talks circulated that the RE developers have been allowed to allocate among themselves which of their proposed capacities should be in the installation targets across technologies, but Almendras qualified that “there is no agreement of such and we are not involved in any agreement with developers.”
The energy chief set on record that that Joint Congressional Power Commission (JCPC) “insists that a bidding process be done. We will wait for their directions.”
If a “no bidding policy” will be established as a system in the allocation of the RE installations, the DoE and the energy secretary have been cautioned that they could be held legally liable for that, because primarily, the government would not be able to get the best deals or it may end up with carpetbagging project developers with no track records in power project developments – and that would be to the disadvantage of the Filipino consumers.
Additionally, the feed-in-tariff (FIT) charges to be passed on in the electric bills take the form of “guarantee” for the RE projects, hence, the award of the installations must go through “biddings” as is the usual course for government-led investment undertakings.
The auction process could also be a perfect venue for DoE to re-evaluate prospects on how RE costs would eventually go down. When a system is established, the FITs can just be held as a ceiling for the pass-on subsidies as some developers may come up with proposals having lower costs.
In the meantime, the energy department disclosed that “internal meetings” will be held so they can start “laying out the eligibility criteria and then agree on a process for the bidding.”
Almendras similarly pointed out that the RE developers cannot avail of FITs across various technologies. For instance, if one project developer would want to pursue projects in wind, solar, hydro and biomass, it would just have to choose in which technology it would want to avail of the FIT.
“It cannot be allowed that there would be one group benefitting from FIT for all technologies. So if (a developer) wants to get FIT for wind, it would just be for wind. It would no longer be eligible for FIT in the other technology installations,” the energy chief explained.
The very intense lobby of the RE developers became even more evident the past weeks, with some groups counting themselves in the installations already going all-out with their press releases and full-page advertisements to add pressure to the immediate approval of the FIT charges.
Almendras reiterated that he will push for RE developments and their integration into the country’s energy mix, yet he qualified that this must be paced prudently because of cost implications of some technologies and also on their impact in the country’s power system.