Fund administrator National Transmission Corporation (TransCo) has settled P23.74-billion worth of feed-in-tariff (FIT) claims for grid-injected capacities on renewable energy (RE) developers last year, according to company President and CEO Jainal Abidin Bahjin II.
Bahjin noted that FIT payments were based on the 1,320.17 megawatts of RE qualified projects that had been cleared by the Department of Energy (DOE) and the Energy Regulatory Commission (ERC) to be incentivized with the subsidy scheme being passed on to all ratepayers.
The company chief executive indicated that in the next batch of FIT-Allowance (FIT-All) that shall be reflected in the bills of consumers, the coverage of the FIT system will already be expanded to include the capacities that had been granted with supply contracts by the DOE under the Green Energy Auction Program (GEAP) for RE capacities.
The GEAP is in compliance with the Renewable Portfolio Standards (RPS) policy of Republic Act 9513 or the Renewable Energy Act – and it targets to provide alternative market to the developers and sponsors of RE projects.
In TransCo’s recent filing for FIT-All charge adjustment, a major fraction of the targeted tariff hike will account for the 1,966.93MW of RE capacities that had been awarded by the DOE for the auctioned RE capacities in June 24 this year.
The FIT-All is a charge being passed on in the electric bills of consumers to incentivize qualified RE installations; while the FIT is the per kilowatt-hour payment that TransCo has been handing over to the RE project-sponsor firms for the capacity that they have been funneling to the grid.
The overall FIT-All rate being applied for by TransCo next year had been pegged at P0.2382 per kilowatt hour (kWh), inclusive of the existing qualified RE plants and the new capacities covered in the recent RE capacity auction.
For year 2022, the estimated aggregate FIT revenues to be fetched will sum up to P28.256 billion, which will go up to P33.999 billion in 2023. The amount will further escalate to P34.429 billion in 2024, the cut-off delivery period for the rest of the first batch of GEAP-committed RE capacities.
Within next year, in particular, the targeted revenues per technology will be P10.591 billion for biomass projects; P6.533 billion for run-of-river hydropower facilities; P7.147 billion for solar installations; and P9.728 billion for wind farm ventures.
It was emphasized that the newly-integrated GEAP capacities will just add P0.0001 per kWh – and that will correspond to the fund requirement of the initial plants that will be coming on-line next year; on top of the RE plants that have already been contributing their capacities since the FIT system was enforced in 2012.
According to TransCo, the FIT-incentivized facilities include 525.95MW of solar farm installations; 393.90MW of wind projects that became operational after the Renewable Energy Law and 33 MW for pre-RE Law plants; 259.26 MW for biomass plants; and 215.69 MW for run-of-river hydropower plants under the RE Law plus an additional 75.88 MW for pre-RE Law plants.
The FIT fund administrator-firm qualified that the timely approval of its FIT rate application will allow it “to make a timely payment of the FITs to FIT-eligible RE developers to which they are entitled to, thereby allowing their continued operations.”
The FIT-All charge petition likewise stipulated that it factored in a FIT differential under-recovery of P176.029 million – and that had been anchored on assumption that the cost recovery revenue within June to December 2022 would stay at projected levels.