ERC junks FIT incentive bid for ocean technology

Published January 5, 2021, 7:00 AM

by Myrna M. Velasco

The Energy Regulatory Commission (ERC) has junked the bid for feed-in-tariff (FIT) incentive of energy technologies that shall be harnessed from ocean resources, primarily those leaning on ocean thermal energy conversion (OTEC) applications.

Instead, the regulatory boy had directed the National Renewable Energy Board (NREB) to file specific FIT application for tidal in-stream energy conversion technology, because that is perceived as the predominant ocean technology in the country.

ERC Chairperson Agnes T. Devanadera

ERC Chairperson Agnes T. Devanadera primarily stipulated that if gleaned from the applied projects with the Department of Energy (DOE), the majority of ocean power projects awarded with service contracts will be utilizing tidal in-stream energy conversion technology.

“The Commission, therefore, found it reasonable to use the said technology (tidal in-stream), instead of the ocean thermal energy conversion technology,” the chief industry regulator noted.

She qualified that the technology application must be harmonized with the ocean resources available in the country, because cost impact determination must be reflective of the physical realities in the Philippine investment terrain.

“The said considerations are vital particularly in view of the fact that the FIT are costs that are ultimately passed on to the consumers,” the ERC chief said.

The tidal in-stream energy conversion is deemed as the technology that could be a “representative project” for ocean energy resources that shall be incentivized with FIT; which is consistent with the rules set forth by the ERC.

The regulatory body apprised NREB that it can have access to more available information relating to tidal-in stream energy conversion applications, “which can be the basis for the calculation of the initial FIT for ocean energy.”

Conversely, the ERC emphasized that it cannot take reference on OTEC because a proposed project in the country of such technology type has not reached commercial scale deployment yet.

A FIT application for OTEC was lodged with the ERC as early as 2012, but the regulator held off action on the filing because there was still no specific project-reference that could be taken as prototype of such technology installation.

“The ERC previously deferred the approval of the FIT for ocean technology…because NREB proposed an OTEC as the representative project and there was no OTEC plant in commercial operation yet at that time, and only a handful of pilot projects have been launched in the world,” the industry regulator explained.

It added that because of such circumstances then, “the basis for the cost of putting up OTEC plants are mere pilot projects which are on a high scale.”

Until this time, the ERC pointed out that OTEC remains short of commercial deployment, hence, it was prompted to deny the NREB application.

‘The Commission deemed it prudent to evaluate and determine the reasonable levels of FIT on the basis of information that are relevant in the context of ocean technology developments in the country and in other jurisdictions,” Devanadera stressed.