Which RE producers will be eligible for the FIT? How much new RE capacity is envisaged under the RE Act? Will there be bidding?

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.)

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One thought on “Which RE producers will be eligible for the FIT? How much new RE capacity is envisaged under the RE Act? Will there be bidding?

  1. If NREB sets the quantity we “need,” and the ERC sets a price (the feed-in tariff or FIT) that would result in excess supply, is that not prima facie evidence that the FIT had been set too high? And if so, wouldn’t the FIT scheme then be disadvantageous to the consuming public?

    I believe it is unlawful not to conduct a bidding process if the absence of bidding results in undue injury to the public. Such an act of omission would be covered by Sec. 3(e) of the anti-graft act (RA 3019).

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