EDC seeks FIT for geothermal energy

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Lopez-led power generation company Energy Development Corp. (EDC) is seeking to qualify geothermal projects for feed-in tariff (FIT) support to help meet growing demand of clean energy in the country, its top official told reporters after the company’s annual stockholders’ meeting on Thursday.

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“If you take a look at the FIT that we’re giving to solar and wind and you add the costs of intermittency, 60-90 centavos, it costs a lot to bring them intermittency so why are we not similarly prioritizing geothermal? It’s a very simple solution, and the two arguments there are, one, factoring the cost intermittency for the others and two, for the coal side factoring in the true costs. Is it artificially low?” EDC President and COO Richard Tantoco said.

He said that the Department of Energy (DOE)’s estimate just two days ago was that geothermal can grow in production from 1,900 megawatts (MW) to about 3,000 MW.

EDC’s estimate, Tantoco said, is that geothermal could grow an additional 1,000-1,400 MW for the whole industry.

“We think we can up to 3,400 MW. That’s without accessing all national parks. We could grow it by another 1,000-1,400 MW,” he said.

“Give an initial cap of a few hundred [MW], but they [DOE] have to also recognize geothermal FIT will take time, from the time you explore to the time the first kWh is produced, you’re looking at 6 years. It takes time to develop geothermal, but many will develop it if they give a FIT of P5.50-6.00,” he added.

He said to make it viable the government needs to incentivize geothermal. “There’s no incentive at all from the current landscape. There are many options for incentives, one is RPS [Renewable Portfolio Standards], when all utilities are require to buy a certain percentage [of the geothermal-produced electricity]. If you don’t have that, you have to buy certificates, which is a way to offset, similar to what they have in Chile,” Tantoco said.

National Renewable Energy Board (NREB) Vice-Chairman Ernesto B. Pantangco for his part said, “If you look at the NREB RE program as currently drafted… we’re supposed to grow RE by 22,000 MW to meet the RE target of 35 percent in 2030.”

Pantangco said that currently RE right now produces 26 percent of the country’s power.

“Geothermal is one of the biggest components, which is about 1,400 MW. How can you expect geothermal to fill in that gap when we have difficulty in competing, yet it’s an integral part of the national RE program to meet our commitments,” he said.

“Also geothermal has the biggest contribution because of its baseload operations, but again, how realistic will this be unless there is an incentive that is given to promote geothermal,” he added.

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1 Comment

  1. Kris Balitbukel on

    Developers love FIT. It is the biggest consumer rip-off since power consumers started paying the costs of NPC’s BOT projects. Solar gets a FIT of P 8.69/kwh, which is P 4.49/kwh more than what consumers would pay a cheaper coal plant at P 4.20/kwh. The extra cost is justified as payment for the benefit of avoiding CO2 from coal which emits at about 1000 tons per one million kwh of electricity generated. The rip-off is that the cost paid for the benefit of avoiding CO2 is egregiously over-priced. At the rate of CO2 emission of a typical coal plant, then at a price of the benefit of avoiding CO2 would be $ 1000 per million kWh if the cost of CO2 emission is valued at one dollar per ton; or about P 47,000 per one million kWh, or say P 0.047/kwh if the cost of CO2 is one dollar per ton. Under FIT, the extra cost paid to solar of P 4.49/kwh is like paying $ 95.53/ton for solar to displace CO2 from coal generation. In Europe Certified Emission Reductions (CERs) are currently traded at $ 5/ton. This gives us a sense of the size of the rip-off – solar investors earn $ 90 more per ton than what they would otherwise earn in Europe. And that’s locked in for the next 20 years