AboitizPower wants bidding for RE deals

LISTED AboitizPower Corp. is asking the government to bid out to renewable energy allocations provided under the set installation targets.

In an interview, Juan Antonio Bernad, AboitizPower executive vice president for strategy and regulatory affairs, said bidding out the allocations will make the developers come up with competitive rates.

The National Renewable Energy Board (NREB) has approved a total of 830 megawatts (MW) in installation targets for renewable energy projects. Of this number, 250MW will be from hydro power projects, another 250MW from biomass, 220MW from wind, and 100 MW and 10 MW from solar and ocean technologies, respectively.

Bernad said other countries are also bidding out allocations for renewable energy projects. “Brazil does that for wind projects, and I think India is starting to do it also. By bidding out [the allocations], you get the cheapest rate being offered. It’s the same way they do with Treasury bills (T-bills). It’s like a Dutch auction that when they get the quantity, the last proposed rate becomes the [actual] rate,” he explained. 

He added that by bidding out the allocations, chances are offered rates could be lower than the proposed or approved feed-in tariff (FIT) for the various renewable energy technologies.

Bernad pointed out that some developers may even be willing to set a lower tariff. “That will actually protect the consumers. Since consumers will have to pay for 20 years, it should be kept as low as possible. It [will] not be a one-time or one-shot deal. The rates will be there for 20 years,” he said. 

The AboitizPower executive also said those with lower FIT rates should be prioritized than those with higher ones, which will also lessen the cost impact on consumers. 

Based on the NREB petition, it recommends that feed-in tariffs for solar Power at P17.95 per kilowatt-hour, ocean at P17.65, wind at P10.37, biomass at P7, and hydropower at P6.15.

“The most expensive technologies should be the least priority. Consumers will always prefer the one [using] cheaper technologies than the expensive ones. They’re both renewable energy anyway,” Bernad said. 
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By: Paul Anthony A. Isla
Source: Business Mirror, Sept. 6, 2011
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