Infrastructure NewsPart 3 News: Seven Winning Sectors

BoI calls for postponement of RE Law implementation

This is an article repost.

The Board of Investments (BoI) is seeking the temporary postponement of the implementation of the Renewable Energy Act of 2008, particularly the feed-in tariff (FIT) rate provision, as the country first needs to attract more investments and stay competitive in the global arena.

In a briefing, Trade Undersecretary and BoI managing head Cristino Panlilio said it would be prudent for the government to consider shelving the rollout of RE projects, as this would also delay the imposition of an additional burden on power consumers.

At this point, he said power rates were already too high to be raised even more.

“Renewable—it’s a very exotic idea, but for now, the Philippines cannot afford it because we have really high electricity costs. Here I am trying to invite investors, manufacturers, especially those who use a lot of energy. I think it is understandable for me to say to postpone that,” Panlilio said on the sidelines of the Philippines Power and Infrastructure Funding Roundtable on Thursday.

Panlilio said the country should wait until RE technologies mature before making a stronger push for their development and use. Solar power technologies, for example, were becoming cheaper.

“In the long run, we may see (these technologies becoming) more affordable and closer to the current cost of other more traditional sources of fuel,” Panlilio said.

No matter how low the additional cost that consumers would have to bear as a result of the imposition of FIT rates, Panlilio said it would still be an added burden.

The FIT scheme assures RE developers of future cash flows, as electricity end-users will be charged fixed amounts to cover the production of energy from renewable sources.

Payment for the use of clean energy will come from a uniform per-kWh charge, dubbed FIT Allowance (FIT-All), which will be collected from all electricity end-users.

The National Renewable Energy Board recently approved a FIT rate of 12.75 centavos per kWh for RE projects. This universal levy would be borne by all power users by 2014, when all expected RE projects would have already gone on-line.

The final FIT rates and the FIT-All have yet to be approved by the Energy Regulatory Commission.
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By: Abigail L. Ho
Source: Philippine Daily Inquirer, Aug. 5, 2011
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