PH biomass FIT installation fully subscribed by year-end

By Myrna M.Velasco

SINGAPORE – The Philippine installations for biomass technology that will be incentivized with feed-in-tariff (FIT) will be fully subscribed at 250 megawatts by year-end, according to Dinna O. Dizon, head of the compliance monitoring department of the National Transmission Corporation.

In an interview on the sidelines of the Singapore International Energy Week, she emphasized that at the deadline of the extended FIT for biomass projects this year, the FIT fund-administrator firm is expecting that subsidy-incentivized biomass projects will climb to 31 projects from currently at 16.

“Currently we are paying 16 biomass plants under FIT, total of about 131 MW,” she expounded. TransCo is the government-run firm that is administering collection of the FIT Allowance (FIT-All) pass-on cost to consumers and has in turn been utilizing such to pay the FIT incentives of qualified RE developers.

When the biomass installation ceiling will be fully subscribed, “we estimate that to increase to 31 plants covering 250MW by end of the year,” she stressed.

To recall, Energy Secretary Alfonso G. Cusi issued a policy last year stretching the period on when biomass project-developers could avail of the FIT incentives at a degressed rate of ₱6.5959 per kilowatt hour.

The subsidy rate for biomass had been brought down from a higher base of ₱6.63 per kWh, which was the prescribed cost level in the second wave of RE installations that had been underpinned by FIT in 2015.

The other RE technology with extended FIT availment this end-2019 as directed by the Department of Energy (DOE) is hydro – at a degressed rate of ₱5.8705 per kWh from ₱5.90 per kWh. For this technology though, it is not expected to be fully subscribed on the set deadline by December this year.

When it comes to pass-on of FIT-All to consumers, which is a separate item in the electric bills, Dizon hinted that this will be on downtrend next year because of manifest increase in Wholesale Electricity Spot Market (WESM) prices this 2019 – although it might not be totally felt in the electric bills because of the additional FIT-All that shall be added soon in the bills because of the new biomass and hydro plants that will be included in the FIT incentive system.

“As to the real driver, maybe none in the sense that additional biomass and hydro plants are coming in by end of this year,” Dizon explained.

She emphasized that “for biomass, there will be full subscription of the 250MW by end of the year and its impact will manifest next year. What can bring down the FIT-All is if spot market prices increase.”