Based on the FIT system rules, a renewable-energy producer will be eligible for the FIT if it enters into commercial operation after the effectivity of the appropriate FIT. Eligibility is also to be conferred on new capacity above an established generation baseline in the case of an existing RE producer. An important exception is that geothermal energy, although considered renewable, is not eligible for FIT by express omission in Sec. 7 of RA 9513.
Under the guidelines issued by the DOE, RE producers will have to negotiate an RE contract with the government. The guidelines provide for “blocking” areas within the Philippines for exclusive application of these contracts.
In practice, the ERC (in consultation with NREB) will determine how much electricity will be covered by the FIT scheme. At present, it is envisaged that the FIT scheme for the first few years will apply to a targeted aggregate installation of new capacity of 760 MW per year. It is thus envisaged that dependable capacity will increase by about 5.5 % per year because of the operation of the FIT scheme for RE.
Recently, the DOE Secretary proposed that FIT contracts for large producers be put up for bidding. (UPDATE: Subsequently, the Secretary considered that the RE Act does not authorize bidding.)